TJX Companies (NYSE: TXJ) joined the cheer on a day of
stronger-than-expected retail sales reports. The apparel and home
furnishing company posted a 21 percent jump in second-quarter net
income. TJX also posted a profit of $421.1 million, or 56 cents per
share, up from $348.3 million, or 45 cents per share, in the same
quarter last year.
The Commerce Department's July retail sales number of 0.8
percent was twice the 0.4 percent number economists and analysts
were expecting. This represented the first positive figure in the
past four months. The broad-based expansion was particularly
evident in the apparel sector, as both low-end and high-end
retailers scored impressive results.
On the high-end side, Michael Kors Holdings (NYSE:
), the designer apparel and accessories maker, reported a
total revenue increase of 71 percent
from first-quarter 2012 results to $414.9 million.
On the discount end, TJX said, for third-quarter 2013, the
company expects diluted EPS to be in the range of 56 cents to 59
cents, or a growth of 6 percent to 11 percent from the prior-year
quarter levels. The Zacks Consensus Estimate for third-quarter 2013
was 62 cents, higher than the company's guidance range. The
guidance includes consolidated comparable-store sales growth of 2
percent to 4 percent.
TJX's stock price has had a sensational year. Shares were
trading near $31.86 per share in January and steadily climbed to a
recent 52-week high price of $45.50.
Other off-price apparel retailers have also benefited from
consumers' belt tightening. Ross Stores (NASDAQ:
), Stein Mart (NASDAQ:
) and Wal-Mart (NYSE:
) share prices also enjoyed a steady ascent higher since January.
Wal-Mart is expected to report its second-quarter 2013 results
before the bell on August 16.
Jags Report provided some analysts' insights before Tuesday's
earnings report. MKM Partners reissued its buy rating Monday on
TJX. Friday, analysts at Avondale Partners raised their price
target on the stock from $51.00 to $55.00. Zacks left its neutral
rating and a $46 price target in a research note August 10.
There also was some interesting bullish trading in the options
arena for TJX according to a report furnished by
Schaeffer's Option Center.
The report said there was a spike in volume on the out-of-the-money
September $42.50 strike. Open interest soared on August 10 by
13,147. The sell put strategy requires shares to closes above
$42.50 through September expiration date in order to collect the
TJX shares closed New York trading around 1.8 percent higher
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