TJX Companies Inc. Earnings Cheat Sheet: Margin Expands Boosted by Rising Revenue, Net Income Rises

S&P 500 (NYSE:SPY) component TJX Companies Inc. (NYSE:TJX) reported its results for the third quarter. The TJX Companies is an off-price apparel and home fashions retailer in the United States and worldwide.

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TJX Companies Earnings Cheat Sheet for the Third Quarter

Results: Net income for the department store rose to $406 million ($1.06 per share) vs. $372.3 million (92 cents per share) in the same quarter a year earlier. This marks a rise of 9% from the year earlier quarter.

Revenue: Rose 5% to $5.8 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TJX fell in line with the mean analyst estimate of $1.06 per share. Analysts were expecting revenue of $5.85 billion.

Quoting Management: Carol Meyrowitz, Chief Executive Officer of The TJX Companies, Inc., stated, “We are pleased with our strong overall third quarter performance as our 15% increase in earnings per share was in line with our expectations and achieved on top of a 14% increase last year and 40% growth in the year before that. We achieved these strong results despite unseasonably warm weather during the quarter in many key regions of the U.S. and Canada, which hindered demand for fall apparel. We are also encouraged by the progress we are making at TJX Europe. Further, it’s important to note that sales in the U.S. picked up when the weather turned cooler and we ended the quarter strongly.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 7.9% to $5.47 billion in the second quarter. The figure rose 4.1% in the first quarter from the year earlier and climbed 6.6% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell in line with estimates last quarter after beating forecasts in the previous quarter with net income of 90 cents versus a mean estimate of net income of 89 cents per share.

The company has now seen net income rise in two straight quarters. In the second quarter, net income rose 14.2% from the year earlier.

Gross margins grew 0.7 percentage point to 28.2%. The growth seemed to be driven by increased revenue, as the figure rose 5% from the year earlier quarter while costs rose 4%.

Looking Forward: Expectations for the company’s next quarter performance are more favorable than they were a month ago. The average estimate for the fourth quarter is now at $1.23 per share, up from $1.23. The average estimate for the fiscal year is $3.99 per share, a rise from $3.94 ninety days ago.

Competitors to Watch: Gordmans Stores, Inc. (NASDAQ:GMAN), Citi Trends, Inc. (NASDAQ:CTRN), Stein Mart, Inc. (NASDAQ:SMRT), Syms Corp. (NASDAQ:SYMS), Wal-Mart Stores, Inc. (NYSE:WMT), Ross Stores, Inc. (NASDAQ:ROST), Fred’s, Inc. (NASDAQ:FRED), Target Corporation (NYSE:TGT), Macy’s, Inc. (NYSE:M), and Dillard’s, Inc. (NYSE:DDS).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

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