TJX Companies, Inc. (TJX) on Wednesday reported a 42 percent increase in profit for the fourth quarter from last year. The results reflect higher revenues, an increase in comparable store sales and improved margins. Adjusted earnings met analysts' expectations.
The off-price apparel and home fashions retailer also said it plans to repurchase up to $1.3 billion of its stock and raise the quarterly dividend by 21 percent.
The company's consolidated comparable store sales for the quarter increased 7 percent, amid strong holiday sales. 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.
Looking ahead, the company forecast earnings for the first quarter and fiscal year 2013 in line with analysts' estimates.
The Framingham, Massachusetts-based company's fourth-quarter net income was $475.31 million or $0.62 per share, up from $334.41 million or $0.42 per share in the year-ago period.
Excluding items, earnings per share rose to $0.62 from $0.53 in the prior-year quarter. On average, 25 analysts polled by Thomson Reuters expected earnings per share of $0.62 for the quarter. Analysts' estimates typically exclude one-time items.
Net sales for the quarter rose 6 percent to $6.71 billion from $6.33 billion in the year-ago period. Analysts had a consensus revenue estimate of $6.72 billion.
Looking ahead, TJX said that with favorable weather patterns in February, comparable store sales are trending toward a 7 percent increase for the month.
For the first quarter, TJX forecasts earnings per share from continuing operations of $0.45 to $0.47. This compares to adjusted earnings per share of $0.39 in the prior-year period. Analysts expect earnings of $0.46 per share.
For fiscal 2013, the company expects earnings per share from continuing operations of $2.21 to $2.31. This compares to adjusted earnings per share of $1.99 in the year-ago period. Analysts expect earnings per share of $2.27 for the year.
Further, TJX said it plans to repurchase around $1.2 billion to $1.3 billion of its stock during the fiscal year ending February 2, 2013.
The company noted that with the existing stock repurchase program having about $225 million remaining at fiscal 2012 year end, its board of directors approved a new stock repurchase program to repurchase up to an additional $2 billion of stock.
The new authorization would represent nearly 8 percent of the company's outstanding shares at current prices.
In addition, TJX intends to raise the quarterly dividend on its stock to be declared in April and payable in May, to $0.115 per share. This would represent a 21 percent increase in the current per share dividend.
In Wednesday's session, TJX is trading at $34.74, down $0.48 or 1.36 percent on a volume of 1.06 million shares.
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