TJX Companies Q2 Earnings Miss Estimates As Inflation Bites

  • TJX Companies Inc TJX reported a second-quarter FY23 sales decline of 2% year-on-year to $11.84 billion, missing the consensus of $12.08 billion.
  • The U.S. comparable store sales decreased 5% versus last year, with Marmaxx store sales decreasing 2% and HomeGoods declining 13%.
  • The gross profit margin for the quarter contracted 180 basis points to 27.6%.
  • Selling, general and administrative expenses fell 2.2% to $2.2 billion.
  • The company held $3.5 billion in cash and equivalents as of July 30, 2022. The company generated $641 million of operating cash flow in the quarter.
  • Total inventories at the quarter end were $7.1 billion versus $5.1 billion at the 2Q22 end.
  • Adjusted EPS of $0.69 beat the analyst consensus of $0.67.
  • "As to the top-line, U.S. comp sales for the second quarter came in lighter than we expected as we believe historically high inflation impacted consumer discretionary spending," said CEO Ernie Herrman.
  • TJX expects to repurchase about $2.25 billion – $2.50 billion in fiscal 2023.
  • Outlook: TJX expects FY23 U.S. comparable store sales to decline by 2% to 3% versus its previous guidance of an increase of 1% to 2%.
  • The company expects FY23 adjusted EPS of $3.05 - $3.13 (prior view $3.13 - $3.20) against the consensus of $3.15.
  • For Q3, TJX expects U.S. comparable store sales to be down 3% to down 5%. It expects EPS of $0.77 - $0.81, below the consensus of $0.85.
  • For Q4, it expects EPS of $0.92 - $0.96, against the consensus of $0.95.
  • Price Action: TJX shares are trading higher by 0.13% at $66.73 on the last check Wednesday.
  • Photo Via Company
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