Home Depot, TJX Cos Raise Forecasts as Shoppers Spend More -- 2nd Update
18 5월 2016 - 1:34AM
Dow Jones News
By Paul Ziobro and Anne Steele
American shoppers are willing to spend on their homes and buy
new clothes, just not at traditional department stores.
Home Depot Inc. on Tuesday reported a strong start to the year
with more shoppers visiting stores and spending at levels not seen
since before the housing bust. Meanwhile, TJX Cos., the parent of
off-price chains T.J. Maxx and Marshalls, posted another quarter of
rising profits and sales.
Sales at existing Home Depot stores rose 6.5% in the three
months ended May 1, including a boost from big-ticket items. The
number of transactions over $900 rose 9.5% compared with a year
ago, primarily from sales of appliances, roofing materials, sheds
and windows.
TJX on Tuesday reported a 7% jump in sales at existing stores in
the April quarter and raised its forecasts for the year.
"We are confident that we are growing our customer base and
gaining market share," CEO Ernie Herrman said.
The results stand in contrast to retailers like Macy's Inc.,
Kohl's Corp. and J.C. Penney Co. which reported sluggish sales last
week, pummeling their shares. Those department stores reported
steep drops in apparel sales and resorted to discounting to move
unsold merchandise in the quarter, in part to compete with
Amazon.com Inc. and off-price rivals.
"Consumers are spending less at the mall and less on apparel,"
analysts at Citi wrote in a research report, and "off-pricers are
winning the retail war." The Citi analysts noted that the sales
gains at TJX for the latest quarter more than offset the amount of
sales decline at Macy's.
Investors will get deeper insight into the health of consumer
spending this week when Wal-Mart Stores Inc. and Target Corp.
report. Investors expect Wal-Mart, which gets more than half of its
revenue from groceries, to post a 0.5% increase in sales at
existing stores. But profits are expected to come under pressure
from investments in store improvements and e-commerce.
Target, which said it hired a new chief merchant on Tuesday, has
forecast a same-stores sales increase of 1.5% to 2.5% for the
quarter. Analysts at Buckingham Research noted that the company
likely suffered from the same weak trends as department stores, but
apparel accounts for about 19% of Target's sales.
Home Depot and fellow home-improvement chain Lowe's Cos., have
favorable housing trends at their backs. Home prices are rising,
giving owners more confidence to spend on larger projects. More
people are moving and starting new homes, and America's old housing
stock means plenty of opportunities for other improvement
projects.
"Housing data indicates continued tailwinds for our business,"
Chief Executive Craig Menear said on a conference call.
For the first quarter, Home Depot reported a profit of $1.8
billion, or $1.44 a share, up from $1.58 billion, or $1.21, a year
earlier. Revenue climbed 9% to $22.76 billion.
Home Depot executives said weather had a minor impact on sales,
just a $250 million boost to the U.S. business. Warmer, springlike
weather hasn't yet reached many of its markets, which usually leads
to sales picking up more.
"In certain parts of the country, spring has not yet arrived,"
Home Depot Chief Financial Officer Carol Tome said.
Home Depot shares, already up 12% over the past three months,
slipped about 1% to $133.87 in recent trading. TJX rose nearly 2%
to $76.69.
For 2016, Home Depot expects adjusted earnings of $6.27 a share
on revenue growth of 6.3%, up from its previous guidance for
earnings of $6.12 to $6.18 a share on revenue growth of 5.1% to 6%.
Same-store sales are anticipated to rise about 4.9%.
Write to Paul Ziobro at Paul.Ziobro@wsj.com and Anne Steele at
Anne.Steele@wsj.com
(END) Dow Jones Newswires
May 17, 2016 12:19 ET (16:19 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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