TJX Beats, But… (TJX)

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The TJX Companies, Inc. (NYSE: TJX) did beat estimates this morning and showed that discounters and clearance merchandise retailers that get it can do well in a slowing economy.  Unfortunately, its guidance is only in-line ahead for a company where many were hoping for better results.  There is nothing really bad or anything, it just looks more representative of a fairly valued stock at a time when the stock market is trying to decide its direction.

Net income for the first quarter was $194 million, and diluted earnings per share were $0.43 compared to $0.34 last year; Q1 net sales rose 6% to $4.4 billion on a consolidated comparable store sales increased 3% over last year.  After a tax benefit adjustment, TJX would have posted earnings of $0.41 EPS, compared to an adjusted $0.37 last year.  First Call had estimates at $0.40 EPS on $4.38 Billion in revenues.

The company sees EPS guidance at $0.40 to $0.42 EPS for the coming quarter based upon a 3% comparable store sales gain.  For fiscal Jan-2009 it sees $2.20 to $2.25 EPS, but this range includes a $0.09 share benefit due to a 53rd week in the retail year; and that is based upon a 2% to 3% comparable store growth, of which about 0.5% is due to currency.  Next quarter estimates are $0.43 EPS and fiscal Jan-2009 estimates are $2.22 EPS.

TJX also spent $225 million buying back shares of common stock, which retired 7 million shares.

Jon C. Ogg
May 13, 2008