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

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Retailers Lowe's Companies Inc. (LOW) and TJX Companies (TJX) reported Wednesday profits for their fourth quarter that increased from last year, driven primarily by strong sales growth. However, profit at Office Depot Inc. (ODP) edged up despite a slight decline in sales. TJX also plans to increase dividend by 13 percent and to buy back up to $2.50 billion of stock.

Results at Lowe's and Office Depot topped analysts' estimates, while results at TJX Companies missed estimates.

Lowe's Companies reported net earnings of $1.21 billion or $1.78 per share, higher than $978 million or $1.32 per share in the prior-year quarter.

Total sales for the quarter grew to $21.34 billion from $20.31 billion in the same quarter last year, and consolidated comparable sales increased 5.0 percent. Comparable sales for the U.S. home improvement business increased 5.1 percent.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.71 per share on sales of $20.90 billion for the quarter. Analysts' estimates typically exclude special items.

Looking ahead, the company now projects earnings in a range of $13.10 to $13.60 per share on revenues between $97 billion and $99 billion, including the 53rd week which is expected to increase total sales by approximately $1.0 billion to $1.5 billion. Comparable sales is expected to range from a decline of 1 percent to an increase of 1 percent.

Previously, the company expected earnings in a range of $12.25 to $13.00 per share on total sales between $94 billion and $97 billion, including the 53rd week, which is expected to increase total sales by approximately $1.0 billion to $1.5 billion. Comparable sales was expected to range from a decline of 3% to flat.

The Street is looking for earnings of $12.94 per share on sales of $96.99 billion for the year.

Meanwhile, Office Depot reported that net income from continuing operations grew to $32 million or $0.61 per share from $31 million or $0.57 per share in the prior-year quarter.

Excluding items, adjusted net income from continuing operations was $0.71 per share, compared to $0.43 per share in the year-ago quarter.

Total reported sales for the quarter declined 2 percent to $2.04 billion from $2.09 billion in the same quarter last year, largely driven by 116 fewer retail locations in service compared to the prior year as a result of planned store closures.

Analysts expected Office Depot to report earnings of $0.49 per share on revenues of $1.98 billion for the quarter.
Afforded by the flexibility of its holding company structure, the Company continued to execute upon its operational separation of its consumer and B2B businesses into two, independent, publicly-traded companies.

However, the Company announced in mid-January that its Board of Directors determined to delay the previously announced public company separation to evaluate a potential sale of the Company's consumer business

As part of its ongoing efforts to opportunistically enhance shareholder returns, the Company's Board of Directors authorized a $200 million increase to its existing $450 million stock repurchase plan to $650 million.

Looking ahead, Home Depot now anticipates generating annual revenue, operating and cash flow results in a range consistent with the prior year.

Off-price retailer TJX reported that net income for the quarter soared to $940.20 million or $0.78 per share from $325.52 million or $0.27 per share in the prior-year quarter. Analysts were looking for earnings of $0.91 per share for the quarter.

Net sales for the quarter grew 27 percent to $13.85 billion from $10.94 billion in the same quarter last year, but missed analysts' consensus revenue estimate of $14.22 billion. Overall open-only comp store sales increased 10 percent.

TJX also announced that it intends to increase the regular quarterly dividend on its common stock by 13 percent to $.295 per share, expected to be declared in March 2022 and payable in June 2022, subject to the approval of the Company's Board of Directors.

Further, TJX announced its plan to repurchase approximately $2.25 billion to $2.50 billion of TJX stock during the fiscal year ending January 28, 2023.

For the first quarter of fiscal 2023, the company expects earnings in a range of $0.58 to $0.61 per share on U.S. comparable store sales growth of 1 to 3 percent. Analysts expect earnings of $0.60 per share for the quarter.

Looking ahead to fiscal 2023, the company projects U.S. comparable store sales to be up 3 to 4 percent.

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