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TJX Companies (TJX) Guides Q1, 2013 Profit Below View Amid Upbeat Q4

 February 27, 2013 09:13 AM

(By Balaseshan) TJX Companies Inc. (NYSE: TJX) reported a 27.3 percent growth in quarterly earnings as customer traffic rose across all of its divisions. The off-price apparel retailer, though, guided first quarter and full year earnings below consensus.

In addition, the company plans to rise the regular quarterly dividend on its common stock to be declared in April 2013 and payable in June 2013 by 26 percent to $0.145 per share, subject to the approval of its board of directors.

The company also announced its plan to repurchase about $1.3 billion to $1.4 billion of TJX stock during the fiscal 2014. With $925 million balance at fiscal 2013 under its existing program, the board approved a new stock repurchase program to buy-back up to an additional $1.5 billion of TJX common stock.

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Net earnings increased to $604.84 million or $0.82 per share for the 14-week fourth quarter from $475.31 million or $0.62 per share in the year-ago quarter.

Excluding the about $0.08 benefit from the extra week, adjusted earnings per share (EPS) on a 13-week basis grew 19 percent to $0.74.

Sales rose 15 percent to $7.72 billion. Comparable store sales gained 4 percent benefiting from strong growth in customer traffic.

Analysts, on average, polled by Thomson Reuters expected earnings of $0.81 per share on sales of $7.67 billion for the fourth quarter.

Gross profit margin rose 1.4 percentage points to 28.6 percent, driven entirely by merchandise margin improvement as well as expense leverage on the above-plan sales.

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Looking ahead for the first quarter, TJX forecasts EPS between 59 cents and 62 cents, coming in shy of consensus estimate of 63 cents. EPS estimates would represent a 7 percent to 13 percent increase over last year's $0.55. Comparable store sales growth is expected between flat and 2 percent.

For the full year ending February 2014, the company expects EPS in the range of $2.66 to $2.78, while analysts expect earnings of $2.84 per share. Comparable store sales growth is projected between 1 percent and 2 percent.

The stock closed Tuesday's regular session at $43.67. Shares of the Framingham, Massachusetts-based company have been trading the 52-week range between $36.50 and $46.67.

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