TJX ( TJX) saw first-quarter earnings tumble despite higher revenue, as profits fell at its T.J. Maxx and Marshalls units compared with a strong year-ago quarter.

In early afternoon trading, TJX shares were down 6 cents, or 0.3%, at $19.98. TJX shares dropped as much as 54 cents, or 2.7%, earlier in the day.

In its quarter ended April 26, TJX earned $113.5 million, or 22 cents a share. On a per-share basis, the company's earnings were down 18.5% from theyear-ago quarter, when TJX earned $147.1 million, or 27 cents a share.

TJX's revenue increased 4.6% to $2.79 billion. On a same-store basis, which compares results at like outlets open more than one year, TJX's salesdeclined 2%.

The bottom-line results met Wall Street expectations, even if TJX's revenue didn't. Analysts had projected that the Framingham, Mass.-basedcompany would earn 22 cents a share on $2.84 billion, according to Thomson First Call.

In the current quarter, TJX expects to earn between 25 cents and 28 cents a share, company officials said on a conference call. Wall Street hadbeen projecting second-quarter earnings of 26 cents a share, according to Thomson First Call.

TJX's inventory grew dramatically in the first quarter, climbing $339.3million from the end of fiscal 2003 to $1.9 billion. At the end of thequarter, inventory was up 24.6% over last year.

But on a conference call with analysts, company officials seemedunconcerned by the swelling of inventory. After two years of first quarterinventory declines, inventory levels are essentially back to where they weretwo years ago, officials said. Meanwhile, the company found some "greatbuys" that it brought into its warehouses sooner than normal, officialssaid.

"As we always do, we're keeping a vigilant eye on inventories," saidcompany CEO Ted English, during the call. But he added, "Our goods are very current and represent great values for our customers."

The company plans for inventories to be up again at the end of thesecond quarter, officials said. But the increase in inventories won't affectTJX's ability to control markdowns on products, they said. The average storeinventory was up less than the company's overall inventory increase, theysaid.

"We control that flow into our stores very aggressively," English said.

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