TJX Stock Slips With Retail Sector
NEW YORK (TheStreet) -- TJX Cos. (TJX) - Get Report stock is declining 3.84% to $65.63 on heavy trading volume on Friday afternoon as the company's competitors reported disappointing 2015 third quarter financial results this week.
On Wednesday before the market open, Macy's (M) triggered a sell-off in the retail industry when it reported lower than expected fiscal 2015 third quarter sales.
Macy's reported a 3.6% drop in same stores sales for the quarter ended October 31, down from a 0.7% decline for the same quarter in 2014.
Nordstrom (JWN) reported after the market close on Thursday that comparable store sales at Nordstrom Rack declined 2.2% for the quarter ended October 31, compared with a 1.7% increase for the same period last year.
Before the market open on Thursday, Kohl's Corp. (KSS) posted same store sales that fared better, increasing 1% for the latest quarter, up from a 1.8% decline for the same period last year, but inventories rose year-over-year because of unseasonably warm weather.
These weak performances are weighing on TJX, the parent company of T.J. Maxx, Marshalls and HomeGoods, ahead of its own fiscal 2015 third quarter financial results, due out next Tuesday before the market open.
Analysts have estimated earnings of 85 cents per share for the quarter, unchanged from last year.
Revenue is expected to rise 5% year-over-year to $7.73 billion, compared with $7.37 billion that the company reported for the fiscal 2014 third quarter.
So far today, 5.57 million shares of TJX have been traded, compared with its average daily volume of 3.29 million shares.
Separately, TheStreet Ratings team rates TJX COMPANIES INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate TJX COMPANIES INC (TJX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- TJX COMPANIES INC has improved earnings per share by 9.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TJX COMPANIES INC increased its bottom line by earning $3.15 versus $2.95 in the prior year. This year, the market expects an improvement in earnings ($3.30 versus $3.15).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 6.1% when compared to the same quarter one year prior, going from $517.62 million to $549.34 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market, TJX COMPANIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TJX
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.