Stock of Tjx Rises as Better-than-expected Quarterly Sales Offset Soft Guidance

In the early hours of Wednesday, TJX Companies Inc.'s stock experienced a 2.8% increase, positioning itself for a potential record high. Investors were grappling with the juxtaposition of better-than-expected fiscal fourth-quarter sales against fiscal 2025 guidance that fell short of estimates. The Framingham, Massachusetts-based company also announced plans to boost its dividend by 13% and initiate a stock buyback program ranging from $2.0 billion to $2.5 billion in fiscal 2025.

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For the quarter ending February 3, TJX reported net income of $1.403 billion, or $1.22 per share, a notable increase from the year-earlier period when net income stood at $1.038 billion, or 89 cents per share. Adjusted earnings per share came in at $1.12, aligning with the FactSet consensus. Sales showed a positive trajectory, reaching $16.411 billion, surpassing the $16.202 billion FactSet consensus. Same-store sales demonstrated a robust 5% growth, outperforming the consensus of a 4.3% rise.

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CEO Ernie Herrman highlighted the company's strong finish to 2023, with comparable sales experiencing growth across all divisions. This positive performance followed a fourth-quarter guidance that had fallen below consensus expectations.

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However, the company's outlook for the first quarter and the entire fiscal year 2025 was deemed soft. TJX projected a 2% to 3% rise in first-quarter same-store sales, with earnings per share ranging from 84 cents to 86 cents. The FactSet consensus, in contrast, anticipated a 3.8% growth in same-store sales and earnings per share of 86 cents. Looking ahead to fiscal 2025, TJX forecasted a 2% to 3% increase in same-store sales and earnings per share ranging from $3.94 to $4.02. The FactSet consensus, however, was more optimistic, projecting a 3.6% growth in same-store sales and earnings per share of $4.11.

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TJX, operating under brands like Marmaxx and HomeGoods, reported a 5% rise in same-store sales at Marmaxx during the quarter, while HomeGoods exhibited an impressive 7% growth. TJX Canada experienced a 6% increase in same-store sales, and TJX International, encompassing Europe and Australia, saw a 3% rise. The flagship TJX brand recorded a 5% growth in same-store sales.

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Gross profit margins demonstrated strength, standing at 29.8%, reflecting a 3.7 percentage point increase from the same period in the previous year.

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Despite these positive developments, the stock has encountered a 31% gain over the last 12 months. This contrasts with the broader S&P 500 index, which has seen a 28% increase during the same period.

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In summary, TJX Companies Inc.'s stock displayed early signs of reaching a record high as a result of better-than-expected fourth-quarter sales. The company's optimistic quarterly performance was underscored by increased dividends and a stock buyback program. However, concerns arose as the fiscal 2025 guidance fell short of estimates, tempering some of the initial market enthusiasm. TJX's resilience, diverse brand performance, and strategic initiatives will likely shape its trajectory amid the evolving dynamics of the retail landscape in the coming months.

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