TJX Beats by a Penny, Raises Full-Year Guidance

NEW YORK (TheStreet) -- TJX (TJX), the parent company of the popular discount apparel retailers T.J. Maxx, Marshalls and home furnishings specialty store, HomeGoods, once again surpassed Wall Street expectations for the third quarter.

TJX reported earnings for the Nov. 2-ending quarter of $623 million, or 86 cents a share, slightly higher than the upped guidance the discount retailer shared in October.

Excluding a previously announced 11-cent tax benefit, adjusted diluted earnings per share came in at 75 cents, up 21% over last year's quarter and beating Wall Street expectations by a penny.

TJX's net sales rose 9% to $7 billion, also surpassing Wall Street expectations of $6.91 billion in quarterly revenue.

Total comparable store sales, which includes Marmaxx (the combination of T.J. Maxx and Marshall's) as well as HomeGoods, rose 5%, surpassing the October guidance of 4% comp growth, however below the company's second quarter comp growth of 7%.

HomeGoods had particularly strong comp growth of 10%.

Shares were trading 0.50% higher before the markets opened to $62.80.

The Framingham, Mass.-based company is benefitting from strong sales as consumers flock to its stores for bargain hunting as well as the popular category of home furnishings. TJX is positioned well for the holiday season.

"We are very pleased that our strong momentum continued in the third quarter. Our 21% increase in adjusted earnings per share and 5% consolidated comparable store sales growth were both well above our original plan and achieved over strong comparisons last year," CEO Carol Meyrowitz said in the earnings statement. "We believe these robust results demonstrate, once again, our ability to succeed in all types of economic and retail environments."

The company maintained its fourth-quarter earnings per share in the range of 77 cents to 80 cents, down from the 82 cents a share it reported last year. (Last year's fourth quarter included an 8-cent per share earnings benefit from the extra week in the fiscal calendar.)

T.J. Maxx expects comp sales for the fourth quarter of just 1% to 2% due to the six fewer shopping days in the Christmas selling season.

"The fourth quarter is off to a good start and we see exciting opportunities for this holiday selling season: we have great initiatives planned and will be shipping fresh gift-giving selections to our stores throughout the holiday season; we expect our marketing campaigns will be seen by more people than ever before; and as always, we will be offering consumers extreme values on great fashions and brands! Longer term, we see tremendous potential ahead for TJX, and we remain very confident in our ability to continue driving substantial top- and bottom-line growth," Meyrowitz said in the statement.

However, the retailer raised its full-year earnings guidance even further to a range of $2.91 to $2.94 a share compared to its upped guidance of $2.89 to $2.93 a share in October and well above last year's earnings of $2.55 a share. On an adjusted basis, which excludes the 11-cent tax benefit in the third quarter, TJX's guidance ranges from $2.80 to $2.83 a share.

-- 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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