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Lowe's, Office Depot Q4 Sales Miss View, But TJX Results Top

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Lowe's Companies Inc. (LOW) and Office Depot Inc. (ODP) reported profit for their fourth-quarter, while TJX Companies' (TJX) profit increased 17 percent from the prior year. TJX plans to increase dividend by 13 percent and to buy back up to $2.25 billion of stock.

Quarterly sales of Lowe's and Office Depot missed analysts estimates, while TJX Companies' results topped their expectations.

Lowe's Companies reported that its fourth-quarter net earnings was $509 million or $0.66 per share compared to net loss of $824 million or $1.03 per share in the fourth quarter of 2018. The prior year results included a $952 million of goodwill impairment associated with its Canadian operations.

Adjusted earnings per share topped analysts' expectations, while quarterly sales missed their estimates.

Looking ahead to fiscal year 2020, the company expects earnings per share to be in the range of $6.38 to $6.58, and adjusted earnings per share of $6.45 to $6.65. Analysts expect annual earnings of $6.67 per share.

The company projects annual total sales growth of about 2.5 percent to 3.0 percent, and comparable sales growth of about 3.0 percent to 3.5 percent.

Excluding charges, adjusted earnings per share for the fourth-quarter increased 17.5 percent to $0.94 from $0.80 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.91 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

Sales for the fourth quarter rose 2.4 percent to $16.03 billion from $15.65 billion in the previous year. Analysts expected revenues of $16.15 billion for the quarter. Comparable sales increased 2.5 percent. Comparable sales for the U.S. home improvement business increased 2.6 percent for the fourth quarter.

Meanwhile, Office Depot reported that its fourth-quarter net income was $55 million or $0.10 per share, compared to net loss of $14 million or $0.02 per share in the fourth quarter of 2018.

For fiscal year 2020, the company projects sales to be about $10.50 billion. Analysts expect revenues of $10.46 billion for the fiscal year.

Quarterly adjusted net income from continuing operations was $68 million or $0.12 per share, compared to an adjusted net income from continuing operations of $52 million, or $0.09 per share in the fourth quarter of 2018.

Adjusted operating income was $92 million compared to adjusted operating income of $84 million in the fourth quarter of 2018. The primary driver of this improved performance was stronger operating results in all three divisions driven by the Business Acceleration Program -related cost efficiency efforts.

Total reported sales for the fourth quarter were $2.51 billion, a decrease of 6 percent from last year's $2.67 billion. Analysts expected revenues of $2.62 billion for the quarter. The decrease in revenue was primarily the result of lower sales in the Retail Division, driven by lower same store sales and fewer retail stores, combined with lower sales in the CompuCom Division and Business Solutions Division.

TJX Companies Inc. reported that its net income for the fourth quarter of fiscal 2020 rose 17 percent to $984.79 million from the previous year's $841.54 million, with earnings per share improving to $0.81, from $0.68 in the previous year. On average, 28 analysts expected the company to report earnings of $0.77 per share for the fourth-quarter.

Both earnings and net sales beat analysts' estimates.

TJX plans to increase the regular quarterly dividend to be declared in March 2020 and payable in June 2020 to $0.26 per share. It would represent a 13 percent increase in the current per share dividend.

The company plans to repurchase about $1.75 billion to $2.25 billion of its stock during the fiscal year ending January 30, 2021.

With $1.7 billion remaining at Fiscal 2020 year end under the company's existing stock repurchase programs, the company's Board approved to repurchase up to an additional $1.5 billion of stock.

For the first quarter of Fiscal 2021, the company expects earnings per share to be in the range of $0.59 to $0.60 compared to earnings per share of $0.57 in the prior year. Analysts expect earnings of $0.61 per share for the first-quarter. The company expects comparable store sales growth to be 2 to 3 percent on both a consolidated basis and at Marmaxx.

For the 52-week fiscal year ending January 30, 2021, the company projects earnings per share to be between $2.77 and $2.83, which would represent a 4 to 6 percent increase over the prior year's $2.67. Analysts expect annual earnings of $2.87 per share.

The company projects annual comparable store sales growth to be 2 to 3 percent on both a consolidated basis and at Marmaxx.

Net sales for the quarter rose 9.7 percent to $12.21 billion from $11.13 billion in the prior year. Wall Street analysts were looking for revenue of $11.83 billion for the quarter.

Consolidated comparable store sales for the fourth-quarter increased 6 percent while it was up 6 percent in last year too. Customer traffic was the primary driver of the comp store sales increase at all four major divisions.

LOW is currently trading at $119.09 up $0.57 or 0.48 percent. ODP is trading at $2.38, up $0.01 or 0.63 percent.

TJX Companies is trading at $64.30, up $4.58 or 7.67 percent.

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