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TJX Companies posts 3 percent rise in Q1 net sales

The TJX Companies net sales for the first quarter of fiscal 2018 increased 3 percent to 7.8 billion dollars and consolidated comparable store sales increased 1 percent over last year's 7 percent increase. Net income for the quarter was 536 million dollars and diluted earnings per share were 0.82 dollar versus the prior year's 0.76 dollar.

Commenting on the first quarter trading, Ernie Herrman, CEO and President of The TJX Companies, stated in a press release, "Comp store sales growth was once again driven by customer traffic. We achieved these results despite the unfavorable weather in parts of the US and Canada compared to last year. The second quarter is off to a solid start and we have excellent liquidity in our inventories.”

Financial highlights of the first quarter

For the first quarter, the company's consolidated pretax profit margin was 10.7 percent, a 0.2 percentage point decrease compared with the prior year. Gross profit margin was 29 percent, up 0.2 percentage points versus the prior year.

The company increased its dividend by 20 percent in the first quarter, marking the 21st consecutive year of dividend increases.

During the first quarter ended April 29, 2017, the company increased its store count by 50 stores to a total of 3,862 stores.

Second quarter and full year outlook

For the second quarter of fiscal 2018, the company expects diluted earnings per share to be in the range of 0.81 dollar to 0.83 dollar compared to 0.84 dollars last year. This guidance reflects an assumption that the combination of foreign currency and transactional foreign exchange will negatively impact EPS growth by 4 percent and that wage increases will negatively impact EPS growth by an additional 2 percent. This EPS outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

For the 53-week fiscal year ending February 3, 2018, the company now expects diluted earnings per share in the range of 3.82 dollars to 3.89 dollars. This represents a 10 percent to 12 percent increase over the prior year's 3.46 dollars. The company's full-year guidance includes an expected benefit of approximately 0.11 dollar per share from the 53rd week in the company's fiscal 2018 calendar.

Excluding this benefit, the company expects adjusted diluted earnings per share to be in the range of 3.71 dollars to 3.78 dollars. This would represent a 5 percent to 7 percent increase over the prior year. This guidance reflects an assumption that wage increases will negatively impact EPS growth by 2 percent and that the combination of foreign currency and transactional foreign exchange will negatively impact EPS growth by 1 percent. This EPS outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

Picture:TJX website

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