TJX reported strong earnings for the first quarter, beating analyst expectations, but its second-quarter outlook fell below Wall Street estimates, causing the stock to dip slightly.
The leading off-price apparel and home fashion retailer announced a 22% increase in adjusted earnings per share (EPS) and a 6% increase in revenue compared to the same period last year.
For the first quarter ending May 4, 2024, TJX reported adjusted EPS of $0.93, which was $0.05 higher than the analyst estimate of $0.88. Revenue reached $12.48 billion, slightly below the consensus estimate of $12.49 billion.
The company’s pre-tax profit margin increased by 0.8 percentage points to 11.1% compared to the previous year, reflecting strong operational performance. TJX also returned $886 million to shareholders through share repurchases and dividends during the quarter.
CEO Ernie Herrman expressed satisfaction with the company’s performance, highlighting that the 3% increase in consolidated comparable store sales was entirely driven by growth in customer transactions. Herrman said, “We saw sales growth driven entirely by customer transactions across all of our divisions, underscoring the strength of our value proposition.”
Despite the positive results, TJX’s stock experienced a modest 0.7% decline following the earnings announcement due to softer expectations for the next quarter. TJX expects EPS for the second quarter of 2025 to be in the range of $0.88 to $0.90, below the analyst consensus of $0.94.
However, the company raised its full-year EPS outlook to a range of $4.03 to $4.09 for 2025, while the consensus estimate was $4.10.
Looking ahead, Herrman remains optimistic, noting a strong start to the second quarter and numerous growth opportunities throughout the year.
“In the longer term, we are excited about the potential to increase customer transactions and sales, gain additional market share, and enhance TJX’s profitability,” he added.
The company’s focus on value offerings and the treasure hunt shopping experience continues to resonate with consumers, positioning TJX positively in a competitive retail environment. Despite the near-term cautious outlook, TJX’s ability to attract customers and manage profitability effectively indicates ongoing potential for gaining market share.
Source: investing.com
