The TJX Companies, Inc.
) reported earnings of 81 cents per share in the fourth quarter
of fiscal 2014, missing the Zacks Consensus Estimate of 83 cents
by 2.4% due to lower than expcted sales.
However, earnings were ahead of the year-ago earnings of 74
cents by 9% and management's guidance range of 77 cents to 80
cents. The year over year earnings upside was fueled by higher
consumer traffic, improved margins and solid comparable-store
sales growth for consecutive months.
Net sales of this leading off-price retailer inched up by 1.0%
year over year to $7.8 billion in the reported quarter. Net sales
marginally missed the Zacks Consensus Estimate of $7.9 billion
due to unexpected bad weather conditions that negatively affected
TJX Companies' consolidated comparable store sales increased
3.0% in the quarter compared to a 7% increase in the comparable
year-ago quarter. The year-over-year increase was driven by
same-store sales growth of 3% at Marmaxx, 2% at Home Goods, and
9% at TJX Europe. Comps however declined at TJX Canada stores by
We note that comps growth was lower than the prior year
growth, due totough retail environment in form of reduced
discretionary spending by consumers and unfavorable weather,
which negatively impacted holiday sales.
TJX Companies' gross margin shrank 1.0 percentage points (pp)
from the prior-year quarter to 27.6%. The margin was lowered due
to decline in merchandise margins following aggressive pricing by
TJX during the highly promotional holiday shopping
Selling, general and administrative costs as a percentage of
sales increased 0.4 pp year on year to 15.6% in the fourth
For fiscal 2014, earnings of $2.83 per share missed the Zacks
Consensus Estimate of $2.85 by 1.0%. Earnings were ahead of the
year-ago earnings of 2.47 by 15% and were at the higher
management's guidance range of $2.80-$2.83 backed by higher
Net sales grew 6.0% year over year to $27.4 billion on the
back of comparable store sales growth of 3%. Net sales marginally
beat the Zacks Consensus Estimate of $27.5 billion.
During the fourth quarter of 2014, the company spent a total
of $455 million to repurchase 7.3 million common shares.
TJX also announced its plan to repurchase approximately $1.6
to $1.7 billion of common stocks during fiscal 2015.
The company issued first quarter and fiscal 2015 outlook. For
fiscal 2015, the company expects earnings in the range of $3.05 -
$3.19. Comparable store sales are expected to grow in the range
of 1%-2%. The Zacks Consensus Estimate for fiscal 2015 is $3.25
per share, higher than the company's guidance range.
For the first quarter of fiscal 2015, the company expects
comparable store sales growth of 1%-2%. It issued earnings per
share outlook in the range of 65 cents to 66 cents. The Zacks
Consensus Estimate for first quarter fiscal 2015 is 71 cents per
share, higher than the company's guidance range.
TJX currently holds a Zacks Rank #3 (Hold). Some better ranked
stocks in the consumer staples sector include
The Hain Celestial Group Inc.
). All of these stocks sport a Zacks Rank #2 (Buy).
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