TJX Cos. (TJX) Tops Q1 EPS by 5c; Boosts FY16 EPS Outlook

(Updated - May 17, 2016 8:41 AM EDT)

TJX Cos. (NYSE: TJX) reported Q1 EPS of $0.76, $0.05 better than the analyst estimate of $0.71. Revenue for the quarter came in at $7.54 billion versus the consensus estimate of $7.29 billion.

Comps rose 7%, versus a 3.4% gain expected.

Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., stated, “It is great to start 2016 with such a strong quarter! Our momentum continued with a consolidated comparable store sales increase of 7% over 5% growth last year, and earnings per share increased 10%. We are particularly pleased with our very strong customer traffic, which drove the comp increases at every division. This tells us that our strategies to bring consumers exciting values on an eclectic and ever-changing mix of the right fashions and brands, sourced from across the globe, are working. We are confident that we are growing our customer base and gaining market share. 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. We see many opportunities in the U.S. and internationally for continued successful growth. We are extremely focused on achieving our goals for 2016 and motivated to surpass them. TJX has an exciting future ahead, and we have a strategic long-term vision to grow to be a $40 billion company and beyond!"

Total inventories as of April 30, 2016, were $3.9 billion, compared with $3.5 billion at the end of the first quarter last year. Consolidated inventories on a per-store basis as of April 30, 2016, including the distribution centers, but excluding inventory in transit and the Company’s e-commerce businesses, were up 7% on both a reported and constant currency basis. The Company is very comfortable with its inventory position entering the second quarter and the plentiful buying opportunities it sees in the marketplace for quality, branded merchandise.

GUIDANCE:

TJX Cos. sees Q2 2017 EPS of $0.77-$0.79, versus the consensus of $0.82.

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 to $3.42, which would represent a 1% to 3% increase over $3.33 in Fiscal 2016. This guidance reflects an assumption that the combination of foreign currency, transactional foreign exchange and wage increases will have a 6% negative impact on EPS growth. This EPS outlook is now based upon a raised estimate of consolidated comparable store sales growth of 2% to 3%.

*** The Street sees FY16 EPS of $3.46.

For earnings history and earnings-related data on TJX Cos. (TJX) click here.

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