TJX Companies, Inc. TJX shares surged after a solid second-quarter performance, smashing earnings expectations and raising its fiscal 2025 profit outlook.
TJX reported second-quarter earnings per share of 96 cents (+13%), beating the analyst consensus of 91 cents. Quarterly sales of $13.468 billion (+6%) outpaced the street view of $13.307 billion.
In the second quarter, TJX Companies reported a 4% increase in consolidated comparable store sales, exceeding the company’s plan and driven entirely by a rise in customer transactions.
The company’s pretax profit margin reached 10.9%, up 0.5 percentage points from the previous year and significantly above the plan.
During the quarter, TJX returned $982 million to shareholders through share repurchases and dividends.
“The performance of Marmaxx, our largest division, was outstanding, with a comp sales increase of 5%,” said Ernie Herrman, Chief Executive Officer and President.
Gross profit margin for the second quarter was 30.4%, a 0.2 percentage point increase versus the second quarter of fiscal 2024.
The company also celebrated the opening of its 5,000th store worldwide. Additionally, TJX signed a definitive agreement to invest approximately $360 million for a 35% ownership stake in the privately held company Brands For Less.
BFL is based in Dubai and is a major off-price retailer of branded apparel, toys, and home fashion. It currently operates over 100 stores.
Total inventories as of August 3, 2024 were $6.5 billion. TJX exited the quarter with cash and equivalents worth $5.25 billion.
The company continues to expect to repurchase approximately $2.0 billion to $2.5 billion of TJX stock during the fiscal year ending February 1, 2025.
“We see excellent buying opportunities in the marketplace and are strongly positioned to ship fresh and compelling merchandise to our stores and online throughout the fall and holiday selling seasons,” the CEO added.
Outlook Raised: For fiscal year 2025, the company projects EPS of $4.09 to $4.13 (prior view: $4.03 to $4.09), slightly below the $4.14 estimate, and anticipates a pretax profit margin of approximately 11.2% (prior view: 11.0%-11.1%).
For fiscal 2025, the company now expects its consolidated comparable store sales to be up approximately 3% (prior view: up 2% to 3%).
TJX Companies forecasts third-quarter EPS to range between $1.06 and $1.08, compared to the $1.10 estimate, with a pretax profit margin expected between 11.8% and 11.9%. For the third quarter, the company targets consolidated comparable store sales to be up 2% to 3%.
Price Action: TJX shares are trading higher by 5.02% to $119.00 premarket at last check Wednesday.
Photo via Wikimedia Commons
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