TJX Companies Q2 Earnings Miss Estimates As Inflation Bites

TJX Companies Inc TJX reported a second-quarter FY23 sales decline of 2% year-on-year to $11.84 billion, missing the consensus of $12.08 billion.
The U.S. comparable store sales decreased 5% versus last year, with Marmaxx store sales decreasing 2% and HomeGoods declining 13%.
The gross profit margin for the quarter contracted 180 basis points to 27.6%.
Selling, general and administrative expenses fell 2.2% to $2.2 billion.
The company held $3.5 billion in cash and equivalents as of July 30, 2022. The company generated $641 million of operating cash flow in the quarter.
Total inventories at the quarter end were $7.1 billion versus $5.1 billion at the 2Q22 end.
Adjusted EPS of $0.69 beat the analyst consensus of $0.67.
"As to the top-line, U.S. comp sales for the second quarter came in lighter than we expected as we believe historically high inflation impacted consumer discretionary spending," said CEO Ernie Herrman.
TJX expects to repurchase about $2.25 billion – $2.50 billion in fiscal 2023.
Outlook: TJX expects FY23 U.S. comparable store sales to decline by 2% to 3% versus its previous guidance of an increase of 1% to 2%.
The company expects FY23 adjusted EPS of $3.05 - $3.13 (prior view $3.13 - $3.20) against the consensus of $3.15.
For Q3, TJX expects U.S. comparable store sales to be down 3% to down 5%. It expects EPS of $0.77 - $0.81, below the consensus of $0.85.
For Q4, it expects EPS of $0.92 - $0.96, against the consensus of $0.95.
Price Action: TJX shares are trading higher by 0.13% at $66.73 on the last check Wednesday.
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