TJX Companies Posts 2 Percent Sales Drop in Q2 But Boosts Outlook for FY23

The TJX Companies, Inc. reported net sales for the second quarter of $11.8 billion, down 2 percent from the second quarter of fiscal 2022.

U.S. comp store sales declined 5 percent, compared to a 21 percent increase in open-only comp store sales in the U.S. in the second quarter of fiscal 2022. Net profit was $809 million and the diluted earnings per share were 69 cents versus 64 cents per share in the second quarter of fiscal 2022.

Commenting on the results, Ernie Herrman, chief executive officer and president of The TJX Companies, Inc. in a statement, “I am very pleased that our pre-tax profit margin in the second quarter exceeded our plan and that EPS was on the high side of our guidance. Turning to sales, US comp sales for the Q2 lower than we expected as we believe historically high inflation impacted consumer goods spending.”

“While we saw more softness in our home categories, we were very pleased that comp sales in our overall apparel business at Marmaxx were slightly positive each month of the quarter. In addition, it was good to see the improved profitability of our international divisions. remain focused on our long-term vision to become an increasingly profitable company with more than $60 billion in revenue,” said Herrman.

TJX reports H1 revenue increase of 5 percent

For the first half of fiscal 2023, net sales were $23.2 billion, up 5 percent from the first half of fiscal 2022. U.S. comp store sales for the period were down 2 percent versus an increase of 19 percent for the first half of fiscal 2022.

Net income for the first half was $1.4 billion, while diluted earnings per share were $1.18 versus $1.08 in the first half of fiscal 2022 and adjusted diluted earnings per share were $1.36.

TJX Updates Full Year Earnings Outlook

For the third quarter, the company expects a pre-tax profit margin of 10.1 percent to 10.4 percent and diluted earnings per share of 77 to 81 cents.

For the third quarter, the company plans to decrease US comparable store sales by 3 to 5 percent, compared to an increase of 16 percent in the third quarter of fiscal 2022.

For the full fiscal year, the company is raising its forecast for pre-tax profit margin and now expects 9.3 percent to 9.5 percent and adjusted pre-tax profit margin 9.7 percent to 9.9 percent, compared to its previous forecast for the pre-tax profit margin of 9.2. percent to 9.4 percent and an adjusted pre-tax profit margin of 9.6 percent to 9.8 percent.

For the full year, the updated outlook for diluted earnings per share expects a range of $2.87 to $2.95 and adjusted diluted earnings per share of $3.05 to $3.13, compared to the earlier forecast for diluted earnings per share of $2.94 to $3.01. and adjusted diluted earnings per share of $3.13 to $3.20.

US comparable store sales are expected to fall 2 to 3 percent, compared to the previous expectation of an increase of 1 to 2 percent.

The company’s third-quarter and full-year outlook imply that fourth-quarter pre-tax profit margin will be 10.1 percent to 10.4 percent and earnings per share of 92 to 96 cents and comparable store sales in the fourth quarter. US will equalize to a 1 percent decline versus a 13 percent increase in the fourth quarter of fiscal 2022.

During the second quarter ended July 30, 2022, the company increased the number of stores by 21 stores to a total of 4,736 stores.

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