Ross, TJX Post Solid June Sales


Retailers had a tough month in June, but major discounters Ross Stores ( ROST ) andTJX Cos. ( TJX ) were a couple of bright spots. Both also raised their profit outlooks.

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 accessories.

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 share.

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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: ROST , TJX

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