TJX Q1 earnings improve 10 percent, raises full year outlook

Net sales of The TJX Companies, for the first quarter of fiscal 2017 increased 10 percent to 7.5 billion dollars and consolidated comparable store sales increased 7 percent over last year's 5 percent increase. Net income was 508 million dollars and diluted earnings per share were 0.76 dollar, a 10 percent increase over the prior year's 0.69 dollar.

“It is great to start 2016 with such a strong quarter. Our momentum continued with a consolidated comparable store sales increase of 7 percent over 5 percent growth last year, and earnings per share increased 10 percent. We are particularly pleased with our very strong customer traffic, which drove the comp increases at every division. With our excellent first quarter results, we are raising our full year earnings per share and comp sales guidance, and the second quarter is off to a solid start,” said Ernie Herrman, Chief Executive Officer and President of The TJX Companies.

Q1 net sales rise across divisions

The company’s comparable store sales at Marmaxx improved 6 percent and net sales increased to 4,865 million dollars. At HomeGoods, comparable store sales were flat at 9 percent and net sales were 1,010 million dollars. Comparable store sales at TJX Canada were positive 14 percent with net sales rising to 686 million dollars against the same quarter, last year. TJX International comparable store sales improved 4 percent and net sales increased to 981 million dollars during the quarter under review.

The movement in foreign currency exchange rates had a one percentage point negative impact on consolidated net sales growth in the first quarter of fiscal 2017 versus the prior year. The overall net impact of foreign currency exchange rates had a 0.05 dollar negative impact compared with a 0.03 dollar negative impact last year.

During the first quarter ended April 30, 2016, the company increased its store count by 47 stores to a total of 3,661 stores.

Raises second quarter and full year outlook

For the second quarter of fiscal 2017, the company expects diluted earnings per share to be in the range of 0.77 dollar to 0.79 dollar compared to 0.80 dollar last year. This guidance reflects an assumption that wage increases will negatively impact EPS growth by 3 percent. The company also expects the combination of foreign currency and transactional foreign exchange will have an additional 2 percent negative impact on EPS growth. This EPS outlook is based upon estimated consolidated comparable store sales growth of 2 percent to 3 percent.

The company is raising its full year guidance to reflect its strong first quarter results. For the fiscal year ending January 28, 2017, the company now expects diluted earnings per share to be in the range of 3.35 dollars to 3.42 dollars, which would represent a 1 percent to 3 percent increase over 3.33 dollars in fiscal 2016. This guidance reflects an assumption that the combination of foreign currency, transactional foreign exchange and wage increases will have a 6 percent negative impact on EPS growth. This EPS outlook is now based upon a raised estimate of consolidated comparable store sales growth of 2 percent to 3 percent.

picture:tjx.com