By Senad Karaahmetovic
TJX Companies (NYSE:TJX) offered a worse-than-expected outlook for the first quarter and full year amid rising costs. Earnings per share were $0.89, in line with the estimates while revenue increased by 4.8% to $14.52 billion, beating the $14.06B consensus.
Analysts were disappointed to hear that the gross profit margin contracted 100 points to 26.1% year-over-year, missing the 27.8% consensus.
“Our eclectic, rapidly changing mix of gift giving assortments clearly resonated with consumers this holiday season. We saw fourth quarter U.S. comp store sales growth of 4%, well above our plan, and U.S. customer traffic increase. Marmaxx delivered a very strong 7% comp increase, its highest quarterly comp of the year, driven by excellent sales in its apparel and accessories categories,” said Ernie Herrman, chief executive officer and president of The TJX Companies.
For this quarter, the company sees EPS in the region of $0.68-0.71 while the full-year EPS forecast came at $3.35 (up or down 6 cents). Analysts were looking for EPS of $0.74 and $3.56 for the first fiscal quarter and full year, respectively.
TJX also said it plans to increase dividends by 13% and buy back between $2B and $2.5B of its stock in the full fiscal year of 2024.
“Fiscal 2024 is off to a strong start and we remain confident in improving our profitability this year and reaching our pretax profit margin target of 10.6% by Fiscal 2025. We are energized for the year ahead and our plans to keep bringing customers around the globe ever-changing selections of great fashions and brands at excellent values. Longer term, I am confident that we are on track to becoming an increasingly profitable $60 billion-plus company,” Herrman added.
Vital Knowledge analysts said the FQ1 and FY forecasts were a “bit soft” and “light.”