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Lowe's, TJX Q2 Revenues Miss Estimates, But Target Revenues Met It

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Home improvement retailer Lowe's Cos. Inc. (LOW) reported Wednesday an increase in earnings per share for the second quarter that also topped analysts' estimates. However, quarterly sales edged down and missed expectations. The company also reaffirmed its guidance range for the full-year 2022.

Discount retailer Target Corp. (TGT) reported that second-quarter net profit plummeted from last year, reflecting a steep drop in operating margins, driven primarily by markdowns amid the inventory reduction efforts. Earnings per share missed estimates, while revenues met them. The retailer also affirmed its revenue growth guidance for fiscal 2022.

Off-price retailer TJX Cos. Inc. (TJX) reported an increase in net profit for the second quarter, primarily driven by improved profitability of international divisions, despite a 2 percent decline in revenues, which also missed estimates. TJX also provided financial outlook for the third and the fourth quarters as well as slashed its guidance for the full-year 2023.

Lowe's Companies reported net earnings of $2.99 billion or $4.67 per share, compared to $3.02 billion or $4.25 per share in the prior-year quarter.

Total sales for the quarter edged down to $27.48 billion from $27.57 billion in the same quarter last year, and consolidated comparable sales edged down 0.3 percent. Comparable sales for the U.S. home improvement business edged up 0.2 percent.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $4.59 per share on sales of $28.12 billion for the quarter. Analysts' estimates typically exclude special items.

Looking ahead to fiscal 2022, Lowe's now expects earnings per share toward the top end of its earlier outlook range as well as total sales and comparable sales toward the bottom end.

The company continues to project 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 also still expected to range from a decline of 1 percent to an increase of 1 percent.

The Street is looking for earnings of $13.39 per share on sales of $97.54 billion for the year.

Meanwhile, Target reported that its second-quarter net earnings plummeted to $183 million or $0.39 per share from $1.82 billion or $3.65 per share in the year-ago quarter. Analysts expected the company to report earnings of $0.71 per share for the first-quarter.

Total revenue for the quarter grew 3.5 percent to $26.04 billion from $25.16 billion in the same quarter last year, driven by total sales growth of 3.3 percent and a 14.8 percent increase in other revenue. Analysts expected revenues of $26.04 billion for the quarter.

Total comparable sales grew 2.6 percent in the quarter, reflecting 2.7 percent traffic growth, comparable store sales growth of 1.3 percent and comparable digital sales growth of 9.0 percent.

Same-day services -Order Pickup, Drive Up and Shipment- grew nearly 11 percent, led by mid-teens growth in Drive Up.

Looking ahead to fiscal 2022, Target said the current trends support the company's prior guidance for full-year revenue growth in the low- to mid-single digit range, while it plans cautiously for the remainder of the year.

Off-price retailer TJX reported that net income for the quarter grew to $809.34 million or $0.69 per share from $785.68 million or $0.64 per share in the prior-year quarter, which included a debt extinguishment charge of $.15 per share.

Net sales for the quarter decreased 2 percent to $11.84 billion from $12.08 billion in the same quarter last year, and missed analysts' consensus revenue estimate of $12.05 billion. U.S. comp store sales decreased 5 percent.

The company said U.S. comp sales came in lighter than expected as high inflation impacted consumer discretionary spending.

Looking ahead to the third quarter, the company projects earnings in a range of $0.77 to $0.81 per share on a U.S. comparable store sales decline of 3 to 5 percent.

For the fourth quarter, the company expects earnings in a range of $0.92 to $0.96 per share on U.S. comparable store sales of between flat and down 1 percent.

For fiscal 2023, TJX now projects earnings in a range of $2.87 to $2.95 per share and adjusted earnings in range of $3.05 to $3.13 per share on comp sales decline of 2 to 3 percent.

Previously, the company expected earnings in the range of $2.94 to $3.01 per share and adjusted earnings in the range of $3.13 to $3.20 per share on comp sales growth of 1 to 2 percent.

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