(Correction: The original article incorrectly stated that the company reported weaker than expected earnings. A corrected version follows.)
Off-price retailer TJX Companies, Inc. (TJX) reported Wednesday a profit for the fourth quarter that grew 27 percent from last year, reflecting improved margins and double-digit revenue growth amid an additional week in 2013.
The company also provided earnings guidance for the first quarter and full-year 2014 below Street view but announced plans to increase its dividend by 26 percent and approved the repurchase of up to an additional $1.5 billion of TJX common stock.
The Framingham, Massachusetts-based company reported net income of $604.84 million or $0.82 per share for the fourth quarter, higher than $475.31 million or $0.62 per share in the prior-year quarter.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.81 per share for the quarter.
Excluding an approximately $0.08 benefit from an extra week, adjusted earnings on a 13-week basis were $0.74 per share, a 19% increase over last year.
Total net sales for the quarter increased 15 percent to $7.72 billion from $6.71 billion in the same quarter last year, and topped Wall Street analysts' consensus estimate of $7.67 billion. Consolidated comparable store sales rose 4 percent compared to a 7 percent increase last year.
Within the company's U.S. segment, Marmaxx sales rose to $4.98 billion from $4.40 billion, and sales of HomeGoods totaled $826 million, up from last year's $674 million. Comparable store sales were up 4 percent at Marmaxx and rose 5 percent at HomeGoods.
In the International segment, sales in Canada increased to $856 million from $745 million, and sales in Europe totaled $1.06 billion, higher than $892 million in the year-ago quarter. Meanwhile, comparable store sales increased 3 percent at TJX Canada and grew 7 percent at TJX Europe, both on a constant currency basis.
Gross profit margin for the quarter expanded 140 basis points to 28.6 percent, reflecting merchandise margin improvement as well as expense leverage on the above-plan sales.
The company also announced plans to increase its regular quarterly dividend on its common stock by 26 percent to $0.145 per share, to be declared in April 2013 and payable in June 2013, subject to the approval of its board of directors.
"We achieved adjusted EPS growth of 28% on sales of nearly $26 billion and consolidated comp store sales growth of 7%, marking the fourth consecutive year of very strong sales and double-digit EPS increases," CEO Carol Meyrowitz said.
For fiscal 2013, the company reported net income of $1.91 billion or $2.55 per share, higher than $1.50 billion or $1.93 per share in the prior year. Adjusted earnings per share was $2.55, compared to last year's $1.99. Total net sales for the full year increased 12 percent to $25.88 billion from $23.19 billion in the previous year. Comparable store sales increased 7 percent.
Looking ahead to the first quarter of fiscal 2014, TJX continues expects earnings in a range of $0.59 to $0.62 per share, on projected consolidated comparable store sales growth of 0 to 2 percent. Analysts expect the company to report earnings of $0.63 per share for the quarter.
For fiscal 2014, the company currently projects earnings in a range of $2.66 to $2.78 per share, on anticipated consolidated comparable store sales growth of 1 to 2 percent. Wall Street is currently looking for full-year 2014 earnings of $2.84 per share.
"In Fiscal 2014, we plan to continue to make investments to support our growth while returning excess cash to shareholders. Our capital spending plan includes investments in our supply chain and infrastructure, new stores, store remodels and e-commerce initiatives," Meyrowitz said.
The company also noted that it is focused on its four powerful divisions and is confident of its ability to continue driving profitable sales growth for many years to come, well on the path to becoming a $40 billion-plus company.
In Wednesday's regular trading session, TJX is currently trading at $43.45, down $0.22 or 0.50% on a volume of 0.24 million shares. In the past 52-week period, the stock has been trading in a broad range of $36.50 to $46.67.
by RTT Staff Writer
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