TJX Firms (TJX) earnings Q4 2024

TJX Cos. on Wednesday said holiday sales jumped 13% as shoppers trying to find deals flocked to the off-price retailer.

Despite the strong quarter and end to its fiscal yr, the corporate issued guidance that got here in light of Wall Street’s expectations because it prepares for tougher comps within the yr ahead and an uncertain growth trajectory.

Here’s how TJX did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly generally known as Refinitiv:

• Earnings per share: $1.22 vs. $1.12 expected
• Revenue: $16.41 billion vs. $16.21 billion expected

For the quarter ended Feb. 3, the corporate reported net income of $1.4 billion, or $1.22 per share, compared with $1.04 billion, or 89 cents per share, a yr earlier. Excluding an extra week within the quarter, TJX reported earnings per share of $1.12.

Sales rose to $16.41 billion, up about 13% from $14.52 billion a yr earlier. The prior-year period’s sales included one fewer week.

For the present quarter, it expects earnings per share of 84 cents to 86 cents, light of the upper end of Wall Street’s expectations of 82 cents to 93 cents, in response to LSEG. For the total yr, it expects earnings per share of $3.94 to $4.02, compared with estimates of $3.88 to $4.40.

Shares of TJX rose greater than 1% in morning trading. The corporate’s stock was up greater than 7% yr to this point, as of Tuesday’s close.

TJX, which runs T.J. Maxx, Marshall’s, Sierra and HomeGoods, has develop into the de facto leader within the off-price space for its ability to supply a big selection of premium, branded products and entice higher-income shoppers who’re searching for cheaper options within the face of persistent inflation. 

During the last yr, it raised its sales and profit guidance quite a few times. Ahead of the vacation season, it struck a positive tone as other retailers issued cautious or disappointing guidance amid slowing demand and an uncertain economy. 

Throughout the holidays, consumers were laser focused on finding the most effective deals and discounts, spending record amounts on Black Friday and Cyber Monday and pulling back when promotions weren’t available. TJX was well positioned through the period because consumers were in a position to shop for a big selection of gifts and at prices that are likely to be lower than competitors. 

Throughout the quarter, comparable sales at Marmaxx, which incorporates T.J. Maxx, Marshall’s and Sierra stores, rose 5%, higher than the 4.6% uptick that analysts had expected, in response to StreetAccount.

While comparable growth stagnated barely from the previous quarter, TJX’s numbers are up against tough prior-year figures so its two-year growth rate has actually accelerated, retail analyst Neil Saunders, managing director at GlobalData, said in a note.

Within the U.S., sales at T.J. Maxx and Marshalls grew 11.7% on top of a 7% increase within the prior yr, Saunders noted.

“Most of this was driven by consumers who either were budgeting to spend less overall or desired to get more for his or her money. Pleasingly, those opting to buy at T.J. Maxx and Marshalls weren’t solely focused on price, in addition they picked the chains for quality and selection,” said Saunders. “This flight to value, which is actually acting as a recruiting sergeant, was very helpful over 1 / 4 which is traditionally expensive for many households.”

As other retailers report soft sales for home furnishings amid high rates of interest and a sluggish housing market, TJX is bucking the trend at its HomeGoods banner. Throughout the quarter, comparable sales were up 7%, compared with the 4.7% rise analysts had expected, in response to StreetAccount.

The numbers are off of barely easier comparisons, as comparable sales at HomeGoods were down 7% within the year-ago quarter. However the chain is benefiting from consumers who may not have the ability to purchase a latest home resulting from the high rates of interest, but are desirous to spruce up their existing spaces.

HomeGoods may be benefiting from the demise of Bed Bath & Beyond’s stores and winning over customers who’d slightly shop for home furnishings in a physical retail store than online, where the brand new Bed Bath now exclusively lives, said Saunders.

TJX’s offering has been higher than usual because so a lot of its suppliers had high inventories throughout 2022 and 2023 and relied on the off-price retailer to assist clear that glut. Now that inventories are leveling out across the industry, Wall Street might be keen to see the state of TJX’s offering and if it could possibly sustain the expansion and demand it posted during the last yr. 

TJX’s guidance appears to reflect that concern. Within the yr ahead, it can be going up against far tougher comps, leaving its growth trajectory uncertain. Some analysts suspect its current fiscal yr will see more muted growth because it looks to hold on to the brand new customers it acquired slightly than continuing to herald latest shoppers.

In a research note from Jane Hali & Associates, store checks across Latest York, Florida, Texas and California showed “fewer notable brand names across luxury, reasonably priced luxury and contemporary.” While inventory levels within the previous quarter were flat, some stores looked to have an excessive amount of inventory and “an excessive amount of clearance,” the note said. 

As of the top of the quarter, total inventories stood at $6 billion, compared with $5.8 billion at the top of fiscal 2023, the corporate said. Consolidated inventories on a per-store basis, which incorporates distribution centers and excludes inventory in transit, TJX’s e-commerce sites and Sierra stores, were up 1%.

Read the total earnings release here. 

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