The TJX Companies, Inc. Raises View Of Q3 And Full Year FY14 And Highlights Investor Event Focus: Increased Long-Term Store Growth Potential; Greater Margin Potential In Europe; And Confidence In Long-Term EPS Growth Model
The Company is maintaining its fourth quarter earnings per share guidance of $.77 to $.80, compared to $.82 last year, which also included the approximately $.08 benefit from the extra week in Fiscal 2013.
Investor Event Focus
Company to Raise Long-Term Store Growth Potential in Current Markets
The Company will raise its estimates for long-term store growth potential on a consolidated basis with its current chains, in its current markets. The most significant factor in this increase is that TJX now believes that its Marmaxx division (T.J. Maxx and Marshalls) can grow to substantially more stores in the U.S. than it had previously estimated. Marmaxx has seen successful growth in both major cities and rural areas over the last several years, which has given the Company the confidence to increase its growth estimates.Company Sees Greater Margin Potential for European Division The Company will discuss its view that it now sees TJX Europe (consisting of T.K. Maxx and HomeSense) as having the long-term potential to reach a 10%-plus segment profit margin. Previously, the Company had modeled its European division at a potential 8%-plus margin. TJX Europe has reported strong results for the past seven quarters, which has given the Company confidence in this division’s increased ability to lever its infrastructure as it pursues its expansion opportunities. Continued Confidence in Long-Term Annual EPS Growth Model of 10%-13% The Company is also confirming its confidence in its ability to grow earnings per share annually by 10%-13% for each of the next three years. The underlying components of this plan remain as follows: The Company expects to grow its sales by 6%-7%, with approximately 2% growth coming from comparable store sales and 4%-5% from square footage growth. An additional 1%-2% is estimated to come from segment profit margin improvement and an additional 3%-4% is expected to come from the Company’s share repurchase program.
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