Yahoo Finance The TJX Companies (TJX) Ups Profit Guidance on Q1 Earnings Beat
The TJX Companies, Inc. TJX began fiscal 2025 on a strong note, with the first-quarter top and bottom lines increasing year over year and earnings easily surpassing the Zacks Consensus Estimate.
The company has been focused on offering consumers attractive deals on popular brands and fashions. TJX witnessed comp sales growth across all segments, completely due to customer transactions, highlighting its solid value proposition. This performance bolsters management’s confidence in the ability to capture market share across all regions. The company began the second quarter on a positive note, foreseeing several business opportunities for the remainder of the year.
Quarter in Detail
TJX Companies’ earnings came in at 93 cents, rising 22% year over year. The metric surpassed the Zacks Consensus Estimate of 87 cents.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote
Net sales came in at $12,479 million, up 6% year over year (also at constant currency or cc). The Zacks Consensus Estimate was pegged at $12,479.6 million.
In the Marmaxx (U.S.) division, the company’s net sales came in at $7,750 million, up 5% year over year. Net sales amounted to $2,079 million, up 6% year over year, in the HomeGoods (U.S.) division. TJX Canada’s net sales came in at $1,113 million, up 7% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,537 million, up 9% year over year.
The company witnessed a 3% jump in overall comparable store sales due to higher customer transactions. Comparable store sales rose 2% each at Marmaxx (U.S.) and TJX International (Europe & Australia) while increasing 4% each at HomeGoods (U.S.) and TJX Canada.
The pretax profit margin was 11.1%, up 0.8 percentage points from the year-ago quarter’s level, driven by reduced freight costs, a reserve release and increased net interest income.
The gross profit margin came in at 30%, up 1.1 percentage points year over year owing to reduced freight costs and improved markon.
Selling, general and administrative (SG&A) costs, as a percent of sales, were 19.2%, up 0.2 percentage points. The rise in such costs can be attributed to incremental store wages and payroll costs.
Other Updates
During the quarter, the company added 18 new stores, ending the quarter with 4,972 stores.
TJX Companies ended the quarter with cash and cash equivalents of $5,059 million, long-term debt of $2,863 million and shareholders’ equity of $7,502 million. The company generated an operating cash flow of $737 million during the first quarter of fiscal 2025.
During the quarter, management returned $886 million to shareholders. TJX repurchased $509 million worth of stock, retiring 5.3 million shares. The company paid out $377 million in shareholder dividends. Management expects to make share repurchases worth $2-$2.5 billion in the fiscal year ending Feb 1, 2025.
As of May 4, 2024, total inventories were $6.2 billion. Management is optimistic about its capabilities to offer impressive branded merchandise at its stores and online during the spring and summer seasons.
Guidance
For fiscal 2025, TJX Companies expects consolidated comparable store sales to increase 2-3%. Management expects the fiscal 2025 pretax profit margin to be 11-11.1% compared with 10.9-11% expected earlier. Management now envisions fiscal 2025 earnings per share (EPS) in the $4.03-$4.09 band, up from the earlier guided range of $3.94-$4.02.
For the second quarter of fiscal 2025, TJX Companies expects a consolidated comparable store sales increase of 2-3%. Management expects a quarterly pretax profit margin of 10.4-10.5%. The company envisions fiscal second-quarter EPS in the range of 88-90 cents.
Shares of this Zacks Rank #3 (Hold) company have risen 8.6% in the past six months compared with the industry’s growth of 22.7%.
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