Retailers had a tough month in June, but major discounters
Ross Stores (
) andTJX Cos. (
) were a couple of bright spots. Both also raised their profit
Ross Stores reported a 7% rise in its June same-store sales,
topping Retail Metrics' forecast of a 4.6% increase. The company
saw strong demand for juniors' merchandise, shoes and
The company's bargains on name-brand merchandise "drove
broad-based merchandise and geographic sales gains during the
month," said Chief Executive and Vice Chairman Michael Balmuth in
a press release.
Ross Stores now sees Q2 earnings coming in at 77 cents or 78
cents a share, up 20% to 22%. Previously, it expected 72 cents to
75 cents a share. Analysts polled by Thomson Reuters expected 77
cents a share.
The discounter has the lowest-yielding stock in the apparel
retail industry group. It pays a dividend of 56 cents a share a
year for an annualized yield of 0.9%.
Ross shares are near a record high after clearing a 64.89 buy
point in a flat base last month.
Rival TJX also reported a 7% rise in its June same-store
sales. It almost doubled expectations for a 3.7% gain.
Due to its strong June sales, the company lifted its Q2 profit
forecast to 52 cents or 53 cents a share. Analysts' consensus is
51 cents a share. Previously, it forecast a profit of 47 cents to
50 cents a share.
For its fiscal year ending in January, TJX raised earnings
guidance to a range of $2.31 to $2.39 a share. Its prior outlook
was for $2.27 to $2.37 a share.
Despite this, TJX's new outlook is still below views. Analysts
polled by Thomson Reuters are currently expecting $2.42 a
Like Ross Stores, TJX has the lowest yield among the 22
dividend-paying stocks in its group. The company pays 46 cents a
share on an annualized basis, giving it a yield of about 1 %.
TJX has raised its shareholder payout for 16 straight years,
most recently in April.
TJX cleared a 42.91 buy point from a flat base June 18, but
volume was subpar. The stock also cleared a lower, alternative
buy point at 42.60 that day.