TJX Profit Rises But Shares Fall

The retailer is long on optimism but short on specifics in forecast about fourth-quarter results.
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TJX Cos.

(TJX) - Get Report

, which operates the Marshalls, T.J. Maxx and A.J. Wright discount store chains, said net profit jumped 24% in its third quarter, helped partially by "more seasonal fall weather patterns" compared to a year ago.

In the quarter ended Oct. 25, the company earned $183 million, or 36 cents a share, which included an after-tax charge of 2 cents a share stemming from several lawsuits, matching the Thomson First Call consensus. That compares to earnings of $147 million, or 28 cents a share, a year ago.

Total sales rose 11% to $3.4 billion, while consolidated comparable-store sales were up 3% for the quarter.

The company said consolidated sales at its T.J. Maxx and Marshalls stores, called its Marmaxx Group, rose 5% and comparable-store sales were flat with the prior year. Profit was $265 million, up 21%.

The company's Canadian stores, Winners and HomeSense, had a 35% increase in combined total sales, while same-store sales spiked 23% and profit increased 24% in U.S. dollars, thanks to favorable exchange rates. In local currency, same-store sales were up 6%.

And TJX's T.K. Maxx stores in the U.K. and Ireland posted a 31% increase in revenue with a 13% rise in same-store sales, all in U.S. dollars.

TJX also said that during the quarter it bought back 6.2 million shares totaling $125 million.

Looking ahead, the company said it expects "significant year-over-year earnings per share growth" in the fourth quarter. It also expects to earn an additional 4 cents a share because of an extra week in the calendar year.

Analysts are calling for 41 cents a share in the fourth quarter, from the company's earnings of 29 cents a share in the prior-year quarter. For the year, Wall Street's consensus is $1.23 a share. TJX earned $1.08 a share in 2003.

Shares of the Framingham, Mass.-based company were recently down 45 cents, or 2%, at $22.83.