TJX Companies earnings beat expectations, sales drop

Third quarter net sales at The TJX Companies, Inc. were 12.2 billion dollars, a decrease of 3 percent versus the third quarter of fiscal 2022.

The company’s U.S. comp store sales decreased 2 percent versus a 16 percent increase in U.S. open-only comp store sales in the third quarter of fiscal 2022.

Net income for the quarter was 1.1 billion dollars and diluted earnings per share were 91 cents, while adjusted diluted earnings per share were 86 cents. Analysts polled by Investing.com expected the company to report EPS of 80 cents on revenue of 12.29 billion dollars.

Commenting on the company’s trading performance, Ernie Herrman, CEO and president of The TJX Companies, Inc., stated: “U.S. comparable store sales exceeded our expectations, and overall pretax margin, merchandise margin, and earnings per share were strong. I am particularly pleased with the results at our Marmaxx division, which delivered a 3 percent comp sales increase, driven by a strong increase in its apparel business.”

Highlights of TJX Companies year-to-date results

For the first nine months of fiscal 2023, net sales were 35.4 billion dollars, an increase of 2 percent, U.S. comp store sales decreased 2 percent versus an 18 percent increase in U.S. open-only comp store sales for the first nine months of fiscal 2022.

Net income for the first nine month period was 2.5 billion dollars, while diluted earnings per share were 2.08 dollars and adjusted diluted earnings per share were 2.22 dollars.

TJX Companies maintains full year outlook for adjusted pretax profit margin

For fiscal 2023, the company is maintaining the high end of its outlook for adjusted pretax profit margin, which is expected to be between 9.3 percent to 9.4 percent and adjusted pretax profit margin to be 9.8 percent to 9.9 percent.

The company now expects diluted earnings per share to be 2.93 dollars to 2.97 dollars and adjusted diluted earnings per share to be 3.07 dollars to 3.11 dollars. The company said that the change in the high end of the company’s full year adjusted earnings per share outlook is a result of an expected 2 cents negative impact due to unfavourable foreign exchange rates.

For fiscal 2023, the company is increasing its outlook for U.S. comparable store sales and is now planning a decrease of 1 percent to 2 percent versus a 17 percent U.S. open-only comp store sales increase in fiscal 2022.

For the fourth quarter, the company now expects pretax profit margin to be 9.5 percent to 9.8 percent and diluted earnings per share to be 85 cents to 89 cents. During the third quarter ended October 29, 2022, the company increased its store count by 57 stores to a total of 4,793 stores.