TJX Joins Other Low Cost Retailers in Posting Strong Sales

TJX Joins Other Low Cost Retailers in Posting Strong Sales

Discount retailer The TJX Companies, Inc. (NYSE:TJX) reported an excellent result for its second quarter.

TJX Joins Other Low Cost Retailers in Posting Strong Sales

A key metric, comparable store sales, climbed 7 percent as consumers hunted for deals in the context of a slow economy and rising prices of gas.

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Net income was reported at $421.09 million ($0.56 a share), compared to $348.34 million ($0.45 a share) in the period a year ago. The earnings beat the analysts’ estimates of $0.55 per share. Net revenues grew 9 percent to $5.95 billion from $5.47 billion in the same period last year. Revenues missed street expectations of $6 billion.

Carol Meyrowitz, chief executive officer of The TJX Companies, Inc. (NYSE:TJX) said, “We are extremely pleased that our strong momentum continued in the second quarter. Our 24% increase in earnings per share, and 7% consolidated comparable store sales growth both significantly exceeded our original expectations, with every business posting excellent results.”

Profit margins were better – gross margins came in at 28.1 percent, higher by 0.8 percent compared to the year-ago quarter. This was achieved by good margin growth on merchandise, as well as the lower incidence of overheads due to higher volumes.

Meyrowitz also said, “This marks the seventh consecutive year of very strong second quarter operating performance, which we believe demonstrates the sustainability of our sales and profit growth in both strong and weak economies. Customer traffic was up substantially at all divisions in the U.S., Canada, and Europe, and drove most of the comparable store sales increase, reflecting our on-point fashions and brands at great values.”

The company’s guidance for the third quarter is for EPS in the range $0.56 – $0.59, and is predicated on the basis of current comparable same store sales growth of 2-4 percent. This forecast is lower than the market expectations of $0.62. For the fiscal 2013, EPS is revised upwards by $0.01 to $2.39 – $2.45, against analysts’ expectations of $2.46.

Family Dollar Stores, Inc. (NYSE:FDO) reported results for its third quarter in June. Earnings grew in the double digits, with a rise in customer traffic that led sales to grow nearly 10 percent at these operator of self-service retail discount stores. The company revised upwards its guidance for the full year profit.

Retail giant Wal-Mart Stores, Inc. (NYSE:WMT) is set to report second quarter earnings Aug 16. Its performance in the first quarter was a strong EPS of $1.09 a share, and beat expectations and its own guidance. Net sales shrugged off currency headwinds to grow 8.6 percent y-on-y.



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