Winter Chills TJX Q4 Results, Misses Estimates

In Industry News, Reports, What's New by Jeff PrineLeave a Comment

tjmaxxFramingham, MA—“Unfavorable weather” was responsible for contributing to a 4% decline in TJX Companies’ fourth quarter profit in a report released today that missed both sales and earnings forecasts.

For the quarter ended Feb. 1, the off-price parent to Marshalls and TJ Maxx, posted net income of $582.29 million, or 81 cents a share, down from $604.84 million, or 82 cents a share, in the prior-year quarter. Excluding a benefit of 8 cents a share, adjusted net income was 74 cents a share. That was still below analysts’ average estimate for 82 cents a share.

Net revenue crept up 1% to $7.8 billion from $7.72 billion a year ago, narrowly missing analysts’ estimate for $7.86 billion in sales.

Comparable store sales were up 3% compared to a 4% increase in fourth quarter 2012.

Holiday ‘Aggressively Priced’

By division, its U.S. Marmaxx (Marshalls, TJ Maxx) reported a 1% increase in sales to $5.01 billion with comp sales up 3%. Its HomeGoods stores were up 6% to $875 million with comp sales rising 4%.

In the International segment, sales in Canada declined 10% to $767 million, while sales in Europe rose 8% to $1.15 billion. Comparable store sales declined 2% at TJX Canada, while rising 9% at TJX Europe (both at constant currency rates).

Gross margin was down 1 percentage point to 27.6% reflecting both an extra week from last year as well as “a decrease in merchandise margins as the company aggressively priced merchandise in a highly promotional holiday selling environment and took markdowns in January to end the year with clean inventories.”

Selling, general and administrative costs as a percent of sales were 15.6%, a 0.4 percentage point improvement over the prior year’s ratio.

“We delivered these results in a competitive retail environment and despite generally unfavorable weather in many of our regions during the first and fourth quarters. We believe this speaks to the resiliency and flexibility of our off-price model, as we exceeded our long-term plan of 10% to 13% compound annual earnings-per-share growth for the fifth consecutive year,” said CEO Carol Meyrowitz.

For its 2013 totals, TJX posted net income of $2.14 billion, or $2.94 a share, up from $1.91 billion or $2.55 a share in the prior year. Adjusted earnings for the year were $2.83 a share.

Net revenue was up 6% to $27.42 billion from $25.88 billion. Analysts’ forecast, however, calls for earnings of $2.85 a share on revenues of $27.46 billion.

For the coming fiscal year, TJX forecast earnings per share of $3.05 to $3.19 with comparable store sales up 1% to 2%. Analysts’ consensus calls for earnings of $3.24 a share.

In addition, TXJ said it plans to repurchase nearly $1.6 billion to $1.7 billion of TJX stock, representing about 5% of its outstanding shares at current prices.


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