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The TJX Companies (TJX) Q4 Earnings Meet Estimates, Sales Rise

The TJX Companies, Inc. TJX posted fourth-quarter fiscal 2024 results, with the top and the bottom line increasing year over year. Net sales surpassed the Zacks Consensus Estimate while earnings met the same.

Quarter in Detail

TJX Companies’ earnings came in at $1.12, rising 26% year over year. The metric came in line with the Zacks Consensus Estimate.

Net sales came in at $16,411 million, up 13% year over year (up 12% at constant currency or cc). The metric surpassed the Zacks Consensus Estimate of $16,200.1 million.

The TJX Companies, Inc. Price, Consensus and EPS Surprise

 

The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. Price, Consensus and EPS Surprise

The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote

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In the Marmaxx (U.S.) division, the company’s net sales came in at $10,037 million, up 12% year over year. Net sales amounted to $2,805 million, up 16% year over year, in the HomeGoods (U.S.) division.

TJX Canada’s net sales came in at $1,468 million, up 13% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $2,101 million, up 16% year over year.

The company witnessed a 5% jump in overall comp store sales on the back of increased customer transactions. Comp store sales rose 5% at Marmaxx (U.S.) while increasing 7% at HomeGoods (U.S.). Comp store sales increased 6% and 3%, respectively, at TJX Canada and TJX International (Europe & Australia).

The pretax profit margin was 11.2%, up 2 percentage points from the year-ago quarter’s level. Adjusted pretax profit margin was 10.9%, up 1.7 percentage points on increased merchandise margin and expense leverage. The higher merchandise margin reflects gains from reduced inventory shrink expense, lower freight costs, fewer markdowns and improved markon.

The gross profit margin came in at 29.8%, up 3.7 percentage points year over year. The adjusted gross profit margin was 29.5%, up 3.4 percentage points, courtesy of lower freight costs and inventory shrinkage expenses. Also, solid markon coupled with reduced markdowns were an upside. These were somewhat offset by supply chain investments.

Selling, general and administrative (SG&A) costs, as a percent of sales, were 18.9%, up 1.9 percentage points. The rise in such costs can be attributed to increased incentive compensation accruals, incremental store wages and payroll costs.

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Zacks Investment Research


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Other Updates

During the fiscal 2024, the company added 119 new stores, ending the quarter with 4,954 stores.

TJX Companies ended the quarter with cash of $5,600 million, long-term debt of $2,862 million and shareholders’ equity of $7,302 million.

The company generated an operating cash flow of $6,057 million for fifty-three weeks, ending Feb 3, 2024.

During the quarter, management returned $1.2 billion to shareholders. TJX repurchased $797 million in stock, retiring 8.7 million shares. The company paid out $379 million in shareholder dividends. In the fiscal 2024, TJX returned $4 billion to shareholders, including share buybacks worth $2.5 billion and dividend payments of $1.5 billion. In February 2024, management approved a new stock repurchase program of shares worth up to an additional $2.5 billion shares. As of February 2024, the company currently has $1.0 billion remaining under its existing share repurchase program.

As of Feb 3, 2023, total inventories were $6 billion. Management is optimistic about its capabilities to offer impressive branded merchandise at its stores and online during the spring season.

Guidance

For the fiscal 2025, TJX Companies expects an overall comparable store sales increase of 2-3%. Management expects the fiscal 2025 pretax profit margin to be 10.9-11%. Management envisions fiscal 2025 earnings per share (EPS) in the $3.94-$4.02 range.

For the first quarter of fiscal 2025, TJX Companies expects an overall comparable store sales increase of 2-3%. Management expects a quarterly pretax profit margin of 10.5-10.6%. Management envisions fiscal first-quarter EPS in the range of 84-86 cents.

Shares of this Zacks Rank #3 (Hold) company have increased 14.7% in the past three months compared with the industry’s growth of 20%.

Top 3 Picks

Costco Wholesale Corporation COST, which operates membership warehouses, currently carries a Zacks Rank #2 (Buy). COST has a trailing four-quarter earnings surprise of 2.6%, on average. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings suggests growth of around 4.7% and 6.5%, respectively, from the year-ago reported numbers.

Target Corporation TGT operates as a general merchandise retailer in the United States. It currently has a Zacks Rank #2. TGT has a trailing four-quarter earnings surprise of 30.8%, on average.

The Zacks Consensus Estimate for Target’s current financial-year earnings suggests growth of 38.9% from the year-ago reported figure.

Dillard's, Inc. DDS, a department store retailer, currently sports a Zacks Rank #2. DDS has a trailing four-quarter earnings surprise of 42.8%, on average.

The Zacks Consensus Estimate for Dillard's current financial-year sales suggests a dip of 0.3% from the year-ago reported figure.

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