The TJX Companies, Inc.
), adjusted earnings of 56 cents per share in the second quarter of
fiscal 2013 beat the Zacks Consensus Estimate of 55 cents by a
penny, and shot up 24.4% from year-ago earnings.
Growth was fueled by higher consumer traffic on the back of fresh
stocks in the stores and solid comparable-store sales growth for
Total net sales of this leading off-price retailer during the
quarter grew 9.0% year over year to $5.95 billion, driven by solid
growth in consolidated comparable-store sales. However, net sales
lagged the Zacks Consensus Estimate of $5.98 billion.
TJX Companies' consolidated comparable store sales increased 7.0%
in the quarter, driven by same-store sales growth of 7% at Marmaxx,
9% at Home Goods, 10% at TJX Europe and 5% at TJX Canada.
Sales exceeded management's expectations on the back of strong
performance in all the stores in the U.S., Canada and Europe.
Further, well-chosen stocks at the stores consistently improved
customer traffic during the period.
TJX Companies' gross margin expanded 80 basis points from the
prior-year quarter to 28.1%. The margin expansion was mostly
driven by merchandise margin improvement.
Selling, general and administrative costs as a percentage of sales
decreased 40 basis points from the prior year to 16.5% in the first
quarter, driven by expense leverage.
Share Repurchase and Dividend
During the reported quarter, the company repurchased 7.1 million of
its common stock worth $300 million.
For the third quarter of fiscal 2013, the company expects diluted
EPS to be in the range of 56 cents to 59 cents, representing growth
of 6% to 11% from the prior-year quarter levels. The Zacks
Consensus Estimate for the third quarter of fiscal 2013 is 62
cents, higher than the company's guidance range. The guidance
includes consolidated comparable-store sales growth of 2% to 4%.
In its second quarter earnings conference call, the company raised
its adjusted earnings guidance for fiscal 2013 to between $2.39 and
$2.45 from previous expectations of $2.38 and $2.44.
The Zacks Consensus Estimate for fiscal 2013 is $2.46, higher than
the company's guidance range. Moreover, the company expects
consolidated comparable store sales growth of 4% to 5% for fiscal
2013 compared to the previous guidance of 2% to 3%.
TJX COS INC NEW (TJX): Free Stock Analysis
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Currently, we have a Neutral recommendation on The TJX Companies,
Inc. The stock carries a Zacks #2 Rank (a short-term Buy rating).
We appreciate the company's consistent rise in same store sales for
several months. The company has performed well in Europe and North
America where the ongoing economic challenges have resulted in the
consumer spending being shifted from high priced branded products
to the low priced items offered by discount stores. However, rising
input costs and lack of international presence remain persistent