TJX Q3 Net Up 35% on Comp Sales Gain

marshallsFramingham, MA—TJX Cos. today reported better-than-expected third quarter results, but the off-price retailer maintained its below-estimate fourth quarter forecast.

For quarter ended Nov. 2, the parent to Marshalls and T.J. Maxx, posted net income increase of 35% to $623 million, or 86 cents a share, compared with

a profit of $461.5 million, or 62 cents, a year ago. Excluding a one-time tax benefit, adjusted earnings were 75 cents, beating analysts’ estimate by 1 cent.

Net revenue rose 8.9% to $6.98 billion ahead of analysts’ estimate for $6.91 billion in sales. Comparable store sales increased 5%. By division, Marmaxx (T.J. Maxx and Marshalls) posted a 4% gain in comp sales. While HomeGoods reported 10% higher comp sales.

‘Robust Results’

“We believe these robust results demonstrate, once again, our ability to succeed in all types of economic and retail environments,” TJX CEO Carol Meyrowitz.

Gross margin widened 0.5 percentage points to 29.3% driven by buying and occupancy leverage on the above-plan sales and merchandise margin improvement.

Selling, general and administrative costs as a percent of sales were 16.6%, a 0.4 percentage point improvement compared to last year’s ratio.

TJX said its fourth quarter is “off to a good start” but the company maintained its forecast for per share earnings between 77 cents to 80 cents, below the year-earlier quarter’s 82 cents a share and below analysts’ estimate for 84 cents a share.

However, the company raised its full year forecast to between $2.80 and $2.83 a share, up from $2.47 last year.  Analysts’ view is slightly higher: $2.86 a share.

The retailer also kept its fourth-quarter guidance unchanged in the range of 77 cents to 80 cents, down slightly from 82 cents in the year-earlier period and below average estimates of 84 cents.

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com