TJX Companies, Inc. (TJX) on Tuesday reported a 58 percent increase in profit for the first quarter from last year. The results reflect higher revenuesas well as comparable store sales, and improved margins. Both earnings and revenue beat analysts' expectations.
Carol Meyrowitz, Chief Executive Officer of TJX Companies said, "We are particularly pleased that our performance was so strong across the board, with our U.S., Canadian and European businesses all delivering outstanding results."
Looking ahead, the off-price apparel and home fashions retailer forecast higher earnings in the second quarter and also raised its earnings outlook for fiscal 2013. However, the outlook for both the periods are lower than analysts' estimates.
The Framingham, Massachusetts-based company's consolidated comparable store sales for the quarter grew 8 percent, compared to an increase of 2 percent in the prior-year period. Comparable-store sales or comps is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year.
Gross profit margin for the quarter was 28.2 percent, up 1.3 percentage points above the prior-year period's adjusted margin. This increase was largely driven by merchandise margin improvement as well as buying and occupancy cost leverage, in addition to a benefit from foreign currency exchange rates.
TJX's first-quarter net income was $419.20 million or $0.55 per share, up from $265.95 million or $0.34 per share in the year-ago period.
Excluding items, earnings per share rose to $0.55 from $0.39 in the prior-year quarter. On average, 24 analysts polled by Thomson Reuters expected the company to earn $0.54 per share. Analysts' estimates typically exclude one-time items.
Net sales for the quarter rose 11 percent to $5.80 billion from $5.22 billion in the year-ago period and beat analysts' consensus revenue estimate of $5.75 billion.
Looking ahead to the second quarter, TJX forecasts earnings per share in a range of $0.47 to $0.50, representing a 4 percent to 11 percent increase over earnings per share of $0.45 in the year-ago period. The outlook is based on consolidated comparable store sales growth of 2 percent to 4 percent.
Analysts expect the company to earn $0.51 per share.
TJX noted that the outlook reflects an assumed higher tax rate and planned significant year-over-year increase in corporate expenses due to the company's growth-related investment spending.
For fiscal 2013, TJX raised its adjusted earnings outlook to a range of $2.27 to $2.37 per share from the prior range of $2.26 to $2.36 per share.
The guidance represents a 14 to 19 percent increase over the prior year's adjusted earnings per share from continuing operations of $1.99 and is based on estimated comparable store sales growth of 2 percent to 3 percent.
Analysts expect the company to earn $2.39 per share for the year.
TJX continues to expect to repurchase about $1.2 billion to $1.3 billion of its stock in fiscal 2013.
In Tuesday's regular session, TJX is trading at $42.38, up $2.68 or 6.75 percent on a volume of 3.08 million shares.
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