TJX Cos. shares edge higher after topping Q3 earnings estimates By Investing.com

By Sam Boughedda

TJX Cos. (NYSE:) shares edged higher in early Wednesday trading after the company third quarter profit estimates.

The company’s shares are up 1.3% at the time of writing.

The off-price department store business reported earnings of $0.86 per share, $0.06 above the analyst estimate of $0.80, while revenue for the quarter came in at $12.2 billion versus the consensus estimate of $12.29B.

US comparable store sales decreased by 2%, above the company’s expectations.

TJX’s Chief Executive Officer and President, Ernie Herrman, said in its press release that while the firm is not immune to macro factors, it is convinced that its “flexible business model and value proposition will continue to be tremendous advantages.”

Looking ahead, for the full year fiscal 2023, TJX is maintaining the high end of its outlook for adjusted pretax profit margin and expects pretax profit margin to be 9.3% to 9.4%. Meanwhile, it sees adjusted earnings per share between $3.07 to $3.11. It also increased its outlook for US comparable store sales and is now planning a decrease of 1% to 2%.

Reacting to the earnings release, BMO Capital analysts said: “TJX missed top line, but beat bottom line, citing strong increase in apparel at Marmaxx along with a margin benefit from expense timing (expected to reverse in 4Q). Per usual, management introduced a below-Street guide (likely amplified by expense shift). Recognizing current macro/higher sector-wide inventory, we believe TJX represents a long-term share-taker becoming increasingly more important, not only to its customers, but to its brands.”

Goldman Sachs analysts said the firm is “encouraged by the stronger US comp result and outlook for continued strength in this trend into 4Q, with TJX pointing to US comps of flat to +1% in the quarter. This suggests that the company is continuing to gain market share against a choppy macro backdrop.”