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TJX Gains, Earnings Exceeds Guidance But Not Analyst Estimate

Friday February 28th, 2014 - 1:31PM


For the 13-week fourth quarter ended February 1, The TJX Cos. posted net sales of $7.81 billion, up 1% over the 14-week prior-year period. Consolidated comparable store sales increased 3% over the prior year on a 13-week comparable basis, the company reported.

Fourth quarter comparable stores in the Marmaxx Group, including T.J. Maxx and Marshalls, were up 3% while comps at HomeGoods gained 4%, the company maintained. Canada division comps were down 2% but those for the division in Europe were up 9%

Net income was $582.3 million and diluted earnings per share were 81 cents versus $604.8 million, or 82 cents, in the year-earlier period, TJX stated.

Diluted earnings per share increased 9% over last year’s adjusted 74 cents, which excludes the eight cent benefit from the extra week in the fourth quarter of Fiscal 2013, the company added.

The Zacks Consensus Estimate of Wall Street analysts called for diluted earnings per share of 83 cents. In an analysis, Zacks observed that lower than expected sales hurt momentum. However, Zacks also pointed out that earnings were ahead of the year-ago 74 cents figure by 9% and management's guidance range of 77 cents to 80 cents as higher consumer traffic, improved margins and solid comp growth boosted operations.

Net sales for the 52-week fiscal year were $27.42 billion, up 6% over the 53-week fiscal period in the year earlier, the company noted. Comps increased 3% on a 52-week comparable basis.

Marmaxx comps gained 3% while those for Home Goods advanced 7%. Comps in the Canada division were flat while those in Europe were up 6%.

Net income for the 52-week fiscal year was $2.14 billion and diluted earnings per share were $2.94 versus $1.91 billion and $2.55 in fiscal 2012, according to TJX.

Excluding a third quarter tax benefit of 11 cents per share, adjusted diluted earnings per share were $2.83 versus $2.47 versus the year prior excluding the eight cents benefit from the 53rd week in Fiscal 2013, the company declared.

In announcing the financial results, Carol Meyrowitz, TJX CEO said, “The year 2013 was another successful year for TJX, on top of many great years. We achieved EPS growth of 15% over last year’s adjusted 24% increase, and consolidated comp sales increased 3% over last year’s 7% increase. In the U.S., Marmaxx and HomeGoods continued their excellent, consistent performance. We also successfully launched tjmaxx.com, which, along with the smooth transition of Sierra Trading Post into TJX, gives more consumers the ability and convenience to shop our great values 24 hours a day, seven days a week. TJX Canada was in line with our plan for the year and continued to expand Marshalls across that country. TJX Europe delivered another outstanding year, and we could not be more excited about our international growth opportunities. We delivered these results in a competitive retail environment and despite generally unfavorable weather in many of our regions during the first and fourth quarters. We believe this speaks to the resiliency and flexibility of our off-price model, as we exceeded our long-term plan of 10% to 13% compound annual EPS growth for the fifth consecutive year.”

In fiscal 2013, TJX added almost 170 new locations to reach 3,219 including 35 HomeGoods units to reach 450.