TJX profits rise in Q3, but guidance underwhelms

(Sharecast News) - TJX Companies saw shares drop in pre-market trade on Wednesday despite beating forecasts with quarterly profits as the American retail conglomerate disappointed with full-year earnings guidance. The retailer, which owns TJ Maxx and HomeSense in the UK and other chains across North America and Australia, reported diluted earnings per share of $1.03, up 13% on last year and ahead of the 97 cents consensus estimate.

Revenues totalled $13.3bn in the fiscal third quarter, up 9% year-on-year and 6% ahead on a comparable stores basis, driven entirely by increased customer traffic, the company said. Analysts had pencilled in a figure of $13.1bn.

Both results were ahead of internal targets, TJX said, helping the company to raise its full-year forecasts - though guidance underwhelmed investors ahead of the opening bell.

Futures were down 2.5% at $90.20 by 0900 ET after the company guided to 4-5% growth in comparable store sales for the fiscal year ending 3 February 2024 and diluted earnings per share of $3.71-3.74.

For the fourth quarter alone, diluted earnings per share are forecast to be in the range of $1.07 to $1.10, short of the $1.12 expected by the market.

"I am extremely pleased with our third quarter performance and strong execution of our teams as our comp store sales, pretax profit margin, and earnings per share all exceeded our expectations," said TJX president and chief executive Ernie Herrman.

"Customer traffic was up across all divisions, our overall apparel sales remained very strong, and home sales were outstanding and accelerated sequentially versus the second quarter."