Wells Fargo Comments on TJX Companies (TJX) Q1

Wells Fargo maintained a Market Perform rating on TJX Companies (NYSE: TJX) with a price target of $60. Comments follow Q1 results.

Analyst Paul Lejuez said, "The company missed consensus for the second consecutive quarter and merchandise margin decreased again. While Marmaxx trends, particularly in apparel, were likely hurt by weather (Europe performed well as did Home Goods), with the stock trading at about 10x our 2014 EBITDA, there is little room for error. We continue to believe TJX’s off-price business model is better positioned than most in the current environment, but the days of earnings beats seem behind us."

• "Positives: (1) Europe strong, with comps +8% and segment margin +180bps (excluding foreign exchange impact), (2) Inventory/store ended FQ1 down about 1%, (3) HomeGoods performed well, with comps +3% and segment profit margin +10bps.
• Negatives: (1) Marmaxx comped flat (versus guidance of +1-2%) and segment profit margin down 60bps, (2) Canada segment profit margin down 210bps (excluding foreign exchange impact), and (2) Merchandise margin decreased (not quantified) for the second consecutive quarter," he said.

For an analyst ratings summary and ratings history on The TJX Companies click here. For more ratings news on The TJX Companies click here.

Shares of The TJX Companies closed at $58.40 yesterday.

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