TJX Cos. raised its annual guidance and reported that its
earnings rose 4.5% on better-than-expected sales and improved
margins.
For the year ending Jan. 30, TJX raised its per-share earnings
estimate to $3.21 to $3.27 on growth in sales, excluding newly
opened or closed locations, of 2% to 3%. The company previously had
projected $3.17 to $3.25 and growth in sales, excluding newly
opened or closed locations, of 1% to 2%.
For current quarter, TJX forecast per-share earnings of 72 cents
to 74 cents. Analysts polled by Thomson Reuters expected per-share
profit of 78 cents.
TJX, the parent company of T.J. Maxx, Marshalls and HomeGoods,
buys some of its goods through closeouts and sells them at
discounted prices.
Chief Executive Carol Meyrowitz said in a news release Tuesday
that "similar to last quarter, [comparable] sales were almost
entirely driven by customer traffic and we had a significant
increase in units sold. At the same time, we also saw a strong
increase in our merchandise margins."
"The second quarter is off to a very strong start and we are
confident in our ability to achieve our plans for 2015," she
added.
For the period ended May 2, TJX reported a profit of $474.6
million, or 69 cents a share, up from $454.3 million, or 64 cents a
share, a year earlier. The company expected per-share earnings of
64 cents to 66 cents.
Revenue increased 5.8% to $6.86 billion, while analysts
projected $6.8 billion. Currency fluctuations had a negative impact
of three percentage points.
Gross margin rose to 28.3% from 27.9%, mostly on stronger
merchandise margins.
Sales excluding newly opened or closed locations rose 5%,
compared with the company's expectations for growth of 2% to 3%. On
that basis, sales increased a combined 3% at its U.S. T.J. Maxx and
Marshalls chains and 9% at HomeGoods. Analysts expected growth of
3.1% overall, including an combined increase of 3% at T.J. Maxx and
Marshalls chains and a rise of 5% at Home Goods.
TJX plans to follow some major U.S. employers in raising its
workers' pay, reflecting a tighter labor market and laws raising
minimum wages in a number of states. In February TJX unveiled plans
to increase pay for its full- and part-time hourly workers to at
least $9 an hour starting next month, with pay for employees with
the company at least six months set to rise to at least $10 an hour
sometime next year.
Write to Tess Stynes at tess.stynes@wsj.com
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