TJX Earnings Boosted on Store Traffic

TJX Companies Inc. (NYSE: TJX) reported first-quarter fiscal 2017 results before markets opened Tuesday. The discount retailer posted diluted earnings per share (EPS) of $0.76 on revenues of $7.5 billion. In the same period a year ago, the company reported EPS of $0.69 on revenue of $6.87 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.71 and $7.29 billion in revenue.

Same-store sales for the first quarter rose 7%, on top of a 5% increase in the year-ago quarter. The company said that year-over-year currency exchange effects lowered net sales by 1% in the quarter. European sales rose 4% on a same-store sales basis, and Canadian sales rose 14%. In the United States, the Marshalls/T.J. Maxx pair had a same-store sales rise of 6% and the HomeGoods stores posted a rise of 9%.

The outlook for the second quarter calls for EPS of $0.77 to $0.79, compared with $0.80 in the second quarter of fiscal 2015 and a consensus estimate of $0.82. The company raised its estimate for full-year 2017 EPS to a range $3.35 to $3.42. The current consensus estimate calls for full-year EPS of $3.46. For the full year, TJX expects same-store sales to grow by 2% to 3%.

[nativounit]

CEO Ernie Herrman said:

We are particularly pleased with our very strong customer traffic, which drove the comp increases at every division. This tells us that our strategies to bring consumers exciting values on an eclectic and ever-changing mix of the right fashions and brands, sourced from across the globe, are working. We are confident that we are growing our customer base and gaining market share.

Store traffic has been a trouble spot for other retailers in the quarter just ended, but TJX apparently had no trouble. One likely reason is that the off-price retailer is simply more appealing to cautious consumers.

Shares traded up about 3.9% in Tuesday’s premarket at $78.25, near the top of the 52-week range of $63.53 to $79.20. Thomson Reuters had a consensus analyst price target of $82.75 before this announcement.