Yesterday morning before U.S. markets opened for trading, leading U.S. and global off-price apparel and home fashion retailer TJX Companies, Inc. (TJX:NYSE) announced financial and operating results for the first quarter of 2023 ended April 30, 2022.
TJX Companies advised that net sales in Q1/23 increased by 13% to $11.4 billion, compared to $10.1 billion in Q1/22. TJX listed that during Q1/23, comparable U.S. store sales increased by 3% at its Marmaxx stores and fell by 7% at its Home Goods and HomeSense stores, which, when added together, resulted in flat overall growth.
The company indicated that for Q1/23, it posted a net income of $587.5 million, or $0.49 per diluted share, versus a net income of $533.9, or $0.44 per diluted share in Q1/22. The firm advised that in this latest quarter, "excluding a charge of $0.19 related to a write-down of the company's minority investment in Familia, adjusted diluted earnings per share were $0.68."
The company's CEO and President Ernie Herrman commented, "I am very pleased with our first quarter performance…I am particularly pleased that our first-quarter pretax profit margin and earnings per share, each on an adjusted basis, exceeded our plans even though our sales were slightly below our planned range, which underscores the power of our flexible, off-price business model when we execute well."
CEO Herrmann noted that the firm's largest operating division, Marmaxx, which consists of its T.J. Maxx and Marshalls stores, experienced increases in customer traffic which aided in driving a 3% year-over-year increase in comp-store sales in those stores that remained open in the prior year during Covid-19 concerns.
The company provided some sales figures by business division and stated for Q1/23, net sales at its U.S. operations were $8.908 billion, and international net sales in Canada, Europe, and Australia totaled $2.499 billion.
The firm listed that U.S. sales included $6,872 million of sales from its Marmaxx Division and $2,036 of net sales at its HomeGoods Division. The company indicated that the international sales included $1,082 million from TJX Canada and $1,417 million from its TJX International business in Australia and Europe.
The company stated that its consolidated pretax profit margin in Q1/23 improved to 7.5%, compared to 7.2% in Q1/22. The firm noted that Q1/23 profit margin included a write-down of its minority interest in the Familia chain in Russia and that if the 1.9% impact from that action was excluded, then the pretax margin would have been higher at 9.4%.
TJX advised that as of the end of Q1/23, it maintained total inventories of $7.0 billion. The firm explained that even though these levels were higher than the $5.1 billion of inventory held at the end of Q1/22, the levels were very manageable and in line with pre-pandemic levels. The company pointed out that the overall availability of quality, branded merchandise in the marketplace remains excellent and that it believes it is well-positioned to offer exciting merchandise via its retail stores and e-commerce sites over the course of the summer season.
The company listed that it returned $907 million to shareholders in Q1/23 in the form of stock repurchases ($600 million) and dividends ($307 million). The firm additionally stated that it intends to repurchase about $2.25-2.50 billion of its shares in FY/23 and added that in Q1/23, it increased its dividend by 13%.
The company offered some forward guidance and advised that for Q2/23, it is satisfied with current sales trends but anticipates U.S. comparable store sales to be down 1-3% versus Q2/22. The firm added that for Q2/23, it expects diluted earnings of $0.65-0.69 per share.
For FY/23, the company estimates U.S. comparable store sales to be up 1-2% over FY/22, which it noted registered a 17% U.S. open-only comp-store sales increase in FY/22. The company explained that its FY/23 outlook implies a 4-5% U.S. comparable store sales increase in H2/23.
TJX advised that for FY/23, it expects a pretax margin of 9.2-9.4% and an adjusted pretax margin of 9.6-9.8%. The company added that for FY/23, it expects diluted earnings of $2.94-3.01 per share and adjusted diluted earnings of $3.13-3.20 per share.
TJX is headquartered in Framingham, Mass, and operates many leading off-price apparel and home fashion retail stores in the U.S. and international markets. The company's well-known branded stores include T.J. Maxx, Marshalls, Home Goods, Sierra, HomeSense, Winners, and T.K. Maxx. The company listed that as of April 30, 2022, it owned 4,715 stores in nine countries across three continents and, in addition, sells its merchandise through five large e-commerce sites.
TJX Companies began yesterday with a market cap of around $66.0 billion, with approximately 1.174 million shares outstanding. TJX shares opened more than 9% higher yesterday at $61.45 (+$5.26, +9.36%) over the previous day's $56.19 closing price. The stock traded yesterday between $59.01 and $63.04 per share and closed at $60.26.
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