TJX Companies Q3 Profit Meets View, But Revenues Miss; Shares Fall

(RTTNews) - Off-price retailer TJX Companies, Inc. (TJX) on Tuesday reported a 17 percent increase in profit for the third quarter from last year, reflecting higher sales and customer traffic. Earnings per share matched analysts' expectations, but revenues missed their estimates and comparable sales were flat.

Looking ahead, the company forecast fourth-quarter earnings below the Street estimates, but raised the low end of its earnings outlook range for fiscal 2018. Shares of the company are down almost 4 percent in pre-market activity.

The Framingham, Massachusetts-based company's third-quarter net income was $641.44 million or $1.00 per share, up from $549.79 million or $0.83 per share in the prior-year quarter.

Earnings per share for the quarter also rose 10 percent from the prior-year quarter's adjusted earnings of $0.91 per share, which excludes the combined $0.08 per share impact of last year's debt extinguishment charge and pension settlement charge.

On average, 25 analysts polled by Thomson Reuters expected earnings of $1.00 per share. Analysts' estimates typically exclude special items.

Net sales increased 6 percent to $8.76 billion from $8.29 billion in the same quarter last year, but missed analysts' consensus revenue estimate of $8.86 billion.

Consolidated comparable store sales for the quarter were flat, compared to an increase of 5 percent in the same period last year.

The company noted that hurricanes had a negative impact during the quarter, while warmer temperatures in the U.S. during the quarter dampened demand for apparel at the company's Marmaxx division.

Gross profit margin was 29.8 percent, up 0.3 percentage points versus the prior year. This was due to gains related to the company's inventory hedges as well as an increase in merchandise margin, partially offset by higher supply chain costs and expense deleverage on the flat consolidated comparable store sales.

For the fourth quarter, TJX forecast earnings of $1.25 to $1.27 per share and adjusted earnings of $1.14 to $1.16 per share. The outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent. Analysts estimate earnings of $1.27 per share.

For fiscal 2018, TJX maintained the high end of its earnings per share guidance range. The company now expects earnings in a range of $3.91 to $3.93 per share and adjusted earnings of $3.80 to $3.82 per share. This outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

Earlier, the company forecast full-year earnings of $3.89 to $3.93 per share and adjusted earnings of $3.78 to $3.82 per share.

The Street estimates earnings of $3.93 per share for the year.