Market Overview

TJX Shares Near 52-Week High on Earnings Beat and Raised Guidance

TJX Companies (NYSE: TXJ) joined the cheer on a day of stronger-than-expected retail sales reports. The apparel and home furnishing company posted a 21 percent jump in second-quarter net income. TJX also posted a profit of $421.1 million, or 56 cents per share, up from $348.3 million, or 45 cents per share, in the same quarter last year.

The Commerce Department's July retail sales number of 0.8 percent was twice the 0.4 percent number economists and analysts were expecting. This represented the first positive figure in the past four months. The broad-based expansion was particularly evident in the apparel sector, as both low-end and high-end retailers scored impressive results.

On the high-end side, Michael Kors Holdings (NYSE: KORS), the designer apparel and accessories maker, reported a first-quarter total revenue increase of 71 percent from first-quarter 2012 results to $414.9 million.

On the discount end, TJX said, for third-quarter 2013, the company expects diluted EPS to be in the range of 56 cents to 59 cents, or a growth of 6 percent to 11 percent from the prior-year quarter levels. The Zacks Consensus Estimate for third-quarter 2013 was 62 cents, higher than the company's guidance range. The guidance includes consolidated comparable-store sales growth of 2 percent to 4 percent.

TJX's stock price has had a sensational year. Shares were trading near $31.86 per share in January and steadily climbed to a recent 52-week high price of $45.50.

Other off-price apparel retailers have also benefited from consumers' belt tightening. Ross Stores (NASDAQ: ROST), Stein Mart (NASDAQ: SMRT) and Wal-Mart (NYSE: WMT) share prices also enjoyed a steady ascent higher since January. Wal-Mart is expected to report its second-quarter 2013 results before the bell on August 16.

Jags Report provided some analysts' insights before Tuesday's earnings report. MKM Partners reissued its buy rating Monday on TJX. Friday, analysts at Avondale Partners raised their price target on the stock from $51.00 to $55.00. Zacks left its neutral rating and a $46 price target in a research note August 10.

There also was some interesting bullish trading in the options arena for TJX according to a report furnished by Schaeffer's Option Center. The report said there was a spike in volume on the out-of-the-money September $42.50 strike. Open interest soared on August 10 by 13,147. The sell put strategy requires shares to closes above $42.50 through September expiration date in order to collect the premium.

TJX shares closed New York trading around 1.8 percent higher near $45.02.

Posted-In: Earnings News Guidance Management Hot Best of Benzinga

 

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