TJX Raises Third-Quarter and Full-Year Earnings Guidance

NEW YORK (TheStreet) -- TJX (TJX), the parent company to T.J. Maxx, Marshalls and HomeGoods, shot up more than 3% in post-market trading on Monday after boosting third-quarter and full-year guidance fueled by strong sales and profit margins.

TJX raised its third-quarter earnings guidance to 84 cents or 85 cents a share, up from previous guidance between 69 cents and 72 cents a share.  The EPS number includes an 11-cent tax benefit due to reversals of state and foreign tax reserves and allowances that was not figured into its previous guidance. The company earned 62 cents a share in last year's third quarter.

Excluding the tax benefit, the company expects earnings per share of 73 cents to 74 cents, an 18% to 19% increase over the prior year and above Wall Street expectations of 72 cents a share for the October-ending quarter.

The retailer also raised comparable store sales growth to approximately 4% in the quarter, up from the 2% to 3% growth it forecast in August. TJX reported comparable sales of 7% in the third quarter of 2012.

Shares were up 3.3% after market close to $59.50. The company reports earnings on Nov. 19.

The retailer is also raising its full-year earnings per share outlook to a range of $2.89 to $2.93 a share, versus earnings of $2.55 a share last year. On an adjusted basis, the earnings forecast would be $2.78 to $2.82 a share.

TJX maintained its fourth-quarter earnings guidance of 77 cents to 80 cents a share.

The company is hosting an investor day on Tuesday at its headquarters in Framingham, Mass., where it is expected to discuss increased opportunity for its stores in current markets.

"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," it said in a release.

It also sees greater margin potential in its European division, TJX Europe (which consists of T.K. Maxx and HomeSense). The company believes the unit has the potential to reach profit margins of at least 10%, up from 8%.

Finally, the company confirmed its confidence to grow earnings per share annually by 10% to 13% for each of the next three years.

-- Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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