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Shares at The TJX Companies INC (TJX) reach an all-time high on better-than-expected Q3

By Angela Gonzalez-Rodriguez

Nov 18, 2021

Business |ANALYSIS

Image: TJMaxx official website

Shares of The TJX Companies, Inc. (TJX) hit a new all-time high of 76.94 dollars apiece after the retailer reported strong third-quarter results, with both earnings and sales exceeding expectations.

The discounted price retail group posted earnings of 0.84 dollars per share, up 18.3 percent year-over-year. That was also 4 cents ahead of analysts’ consensus estimate. Net sales also came in higher than expected at 12.53 billion dollars, up 24 percent compared to the comparable period a year ago. During their third quarter, TJX paid 313 million worth of common dividends and repurchased 800 million dollars’ worth of common stock.

“The company increased its store count by 19 in the quarter, returned 1.1 billion dollars to shareholders through share repurchases and dividends, and raised its outlook for share repurchases for fiscal 2022 by 500 million dollars,” summarised in a clients’ note CFRA analyst Zachary Warring. “We see TJX well-positioned as consumer confidence drops, inflation continues to hit consumers’ pockets, and government stimulus and savings fade,” he concluded.

TJX Companies’ CEO feels “great” about their ability to deliver during the holidays period

TJX’s home businesses witnessed outstanding growth across all divisions, and its overall apparel open-only comparable store sales increased mid-single digits. Notably, there is little mention of the supply chain disruption’s impact in the retailer’ financial report. The TJX Companies reported 12.53 billion dollars in net revenue, up 20 percent from last year as well as a company’s record.

Ernie Herrman, President and CEO of TJX, said that “We feel great about our ability to deliver customers an exciting mix of gift-giving merchandise and amazing brands and values throughout the holiday selling period. We are in an excellent inventory position, with most of the product needed for the holiday season either on hand or scheduled to arrive at our stores and online in time for the holidays.”

Looking ahead, Herrman concluded shared that “We are very confident in our ability to continue to gain market share, improve our profitability in the medium to long term, and reach our strategic vision of TJX becoming a 60 billion dollars company.”

Revenue strength is due to robust results in all segments with notable strength in the Homegoods and core TJ Maxx channels. On an open-only comp-store basis sales are up 14 percent and tracking at that level in the first few weeks of the 4th quarter. Moving down to the margin and earnings, the company was able to increase profit by 23 percent versus 2-years ago, in tandem with revenue growth, and drive GAAP earnings above the consensus figure. The GAAP $0.84 beat the analyst’s average by $0.04 and puts the company on track to outperform for the year as well.

Image: TJMaxx official website

Image: TJMaxx official website