TJX Profit Rises 2.8%, Boosts Dividend, Buyback Program

TJX Cos. said its earnings rose 2.8% in the holiday quarter as the off-price retailer benefited from strong customer traffic and improved margins.

Shares rose 1.4% to $74 in recent premarket trading as per-share earnings and revenue beat expectations.

TJX, the parent company of T.J. Maxx, Marshalls and HomeGoods, also said it plans to increase its quarterly dividend by 24% to 26 cents from 21 cents.

TJX's board also approved the repurchase of as much as an additional $2 billion of the company's shares.

The company buys some of its goods through closeouts and sells them at discounted prices. Off-price retailers like TJX have been faring better than the overall retail industry as many consumers remain cost-conscious.

TJX said sales at established stores rose 6% in the latest quarter, above expectations for growth of 2% to 3%.

Chief Executive Ernie Herrman said in prepared remarks that the current year is off to a strong start and that TJX has many initiatives planned to continue driving sales and customer traffic.

Mr. Herrman took the helm in January, succeeding Carol Meyrowitz, who remains on as the company's executive chairman.

For the three-month period ended Jan. 30, TJX reported a profit of $666.5 million, or 99 cents a share, up from $648.2 million, or 93 cents a share, a year earlier. The company expected per-share profit of 91 cents to 93 cents.

Revenue increased 7.9% to $8.96 billion, above analysts' expectations for revenue of $8.73 billion.

Gross margin rose to 28.7% from 28.2% as merchandise margins improved.

For the fiscal year ending in January 2017, the company forecast per-share earnings of $3.29 to $3.38. Analysts polled by Thomson Reuters expected per-share profit of $3.61.

For the current quarter, the company forecast per-share earnings of 68 cents to 70 cents. Analysts expected per-share profit of 74 cents.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

February 24, 2016 09:45 ET (14:45 GMT)

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