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TJX's Fiscal Third Quarter Comparable Sales Guidance Lags Wall Street Estimates

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TJX's Fiscal Third Quarter Comparable Sales Guidance Lags Wall Street Estimates

TJX (TJX) issued a fiscal third-quarter comparable store sales forecast that fell short of Wall Street expectations on Wednesday, but raised its full-year earnings outlook.

For the ongoing quarter, the off-price retailer forecasts comparable sales growth of 2% to 3%, missing FactSet analysts' estimate of a 3.1% gain. The company expects earnings of $1.36 to $1.38 per share compared with the Street's consensus of $1.34.

TJX shares fell 1.6% in recent Wednesday trade. They have dropped 3.4% this year.

"Looking ahead, the third quarter is off to a strong start, and we are seeing improvement at our Marmaxx division to start the quarter," Chief Executive Ernie Herrman said in a statement. "Availability of branded, quality merchandise continues to be outstanding, and we have many initiatives in place to drive sales and traffic in the upcoming fall and holiday shopping seasons."

The TJ Maxx and Marshalls' parent elevated its full-year earnings forecast to between $5.31 and $5.36 per share, up from $5.08 to $5.15 previously, while holding its 3% to 4% comparable sales outlook. A FactSet survey expects $5.22 in per-share profit and a 3.8% gain in same-store sales.

Earnings per share for the three months through Aug. 1 expanded to $1.36 from $1.10 a year ago as revenue rose 5% to $15.18 billion. Results beat Street estimates of $1.18 in profit on $15.16 billion in net sales. Same-store sales climbed 4%, topping the 3.3% market forecast.

Marmaxx's net sales grew annually by 3% to $9.11 billion, the slowest second-quarter year-over-year increase among all divisions, and missed Wall Street's expectations of $9.27 billion. HomeGoods and TJX International grew 10% and 11%, respectively.

"While sales at Marmaxx were below our expectations, HomeGoods, TJX Canada, and TJX International all delivered terrific comp sales increases of 6% to 7%," Herrman said.

Last week, UBS Securities projected that TJX would meet fiscal second-quarter targets and raise its full-year outlook on steady sales.

"We believe TJX had Ok sales momentum through July, and we believe this sets TJX up to deliver an in-line (second-quarter) EPS report," UBS said.

On Wednesday, Target (TGT) lifted its full-year adjusted earnings outlook, boosted by tariff refund benefits, while home-improvement retailer Lowe's (LOW) lowered its full-year guidance to the bottom end of its previously issued forecast.

Discount retailers Dollar Tree (DLTR) and Dollar General (DG) are scheduled to report their respective fiscal second-quarter results Aug. 27.

Price: $148.64, Change: $-2.21, Percent Change: -1.47%

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