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TJX Delivers on Q3 Sales and Earnings, but Tempers Expectations for Fiscal Year

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Mega off-pricer TJX Companies (TJX), operator of the Marshall’s, TJMaxx, HomeGoods and TKMaxx stores, announced sales and earnings results Tuesday for the third quarter ended November 1.

Net sales increased by 6 percent to $7.4 billion, driven by a 4 percent gain at Marmaxx (combined TJMaxx and Marshall’s) to $4.7 billion, and a 15 percent jump at HomeGoods to $850 million. Sales at TJX Europe edged up by 8 percent to $1 billion, and TJX Canada sales were flat at $790 million.

Consolidated comparable store sales rose by 2 percent. Comps at the company’s Marmaxx division increased by 1 percent, while those at Homegoods jumped by 7 percent.

The gross margin in the quarter was essentially flat at 29.3%.

Net income dropped by 4 percent to $595 million, or $0.85 per diluted share, from $622.6 million, or $0.75 per share in the prior year’s period, in line with estimates.

TJX also reported that unseasonably warm weather across the U.S. in October hurt apparel sales, though home, jewelry and accessories remained strong.

The company’s e-commerce initiative has so far exceeded expectations, and many more vendors will be participating in TJMaxx.com in the coming months.

Carol Meyrowitz, company CEO, said in a statement, “I am very pleased with our third quarter performance. Our comp sales increase of 2 percent was at the high end of our plan against 5 percent growth last year, our strongest quarter of 2013. On an adjusted basis, we drove a 13 percent EPS increase over 21 percent growth last year. We are particularly pleased that customer traffic continued to gain momentum in the third quarter despite unusually warm weather, which we believe dampened sales throughout TJX Europe starting in September and hurt Marmaxx in October.”

The company lowered its full-year earnings per share estimates to between $3.09 and $3.13 because of foreign currency impact and increased SG&A and increased supply-chain and in-store marketing expense. Analysts were expecting earnings of $3.17 for the fiscal year.

TJX operates a total of 3,385 stores in the U.S., Canada, the U.K., Ireland, Germany and Poland. 

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