A Marshalls and HomeGoods store entrance in Miami, Florida.
Jeff Greenberg | Universal Images Group | Getty Images
TJX Companies raised its full-year guidance on Wednesday after posting another quarter of strong sales, but its outlook still fell just short of Wall Street’s expectations.
The discounter behind Marshalls, HomeGoods and TJ Maxx is now expecting full-year earnings to be between $4.09 and $4.13, compared with estimates of $4.14, according to LSEG.
For the current quarter, TJX is expecting earnings per share to be between $1.06 and $1.08, compared with estimates of $1.10.
Shares rose about 3% in premarket trading.
Here’s how the discounter did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
- Earnings per share: 96 cents vs.92 cents expected
- Revenue: $13.47 billion vs. $13.31 billion expected
The company’s reported net income for the three-month period that ended August 3 was $1.1 billion, or 96 cents per share, compared with $989 million, or 85 cents per share, a year earlier.
Sales rose to $13.47 billion, up from $12.76 billion a year earlier.
Throughout TJX’s fiscal 2024 year, which ended in February, the company posted strong sales gains and robust guidance, but investors have been keen to see how it will lap those numbers in the quarters ahead and if it can keep growing.
The company has looked abroad as a primary growth avenue and on Wednesday, it announced that it was taking 35% ownership stake in the Dubai-based retailer Brands for Less for $360 million. The privately-held brand is the region’s only major off-price player and operates more than 100 stores, primarily in the United Arab Emirates and Saudi Arabia, along with an e-commerce business.
“As TJX seeks to continue its global growth, this transaction gives the Company an opportunity to invest in an established, off-price retailer with significant growth potential. The Company’s ownership in BFL is expected to be slightly accretive to earnings per share beginning in Fiscal 2026,” TJX said in a news release.
As of Tuesday’s close, TJX’s stock is up about about 21% year to date. Shares reached a new high in May after the company reported strong quarterly earnings.
The retailer has been taking market share from competitors like Target and Macy’s and has become a haven for price-sensitive consumers who may be watching their dollars but still want to spring for new clothes.
Some analysts say the nature of TJX’s business model means it does well in any economic environment but if there’s a sharp downturn in consumer spending, it could spell trouble for the company.