TJX To Report Q3 Results

(RTTNews) - The TJX Companies, Inc. (TJX | Quote | Chart | News | PowerRating), an off-price retailer of apparel and home fashions, is set to announce its third-quarter results before market opens Tuesday. The company recently said that its third-quarter earnings from continuing operations are expected to be at or slightly above its previous forecast. Street analysts forecast a year-on-year rise in the company's quarterly earnings and sales.

The company currently expects third quarter earnings from continuing operations at or slightly above its recently raised forecast range of $0.77 - $0.79 per share. Previously, the company had projected earnings per share of between $0.71 and $0.74.

Stores like TJX seem to be beneficiaries of the economic downturn as many cash-strapped consumers gravitate toward stores that are perceived as offering the best value. While sales of such stores may yield some pleasant surprises, analysts caution that the outlook for the holiday season remains uncertain as consumer confidence has declined and the unemployment rate has edged up.

On average, 18 analysts polled by Thomson Reuters expect earnings of $0.80 per share for the quarter on sales of $5.25 billion. Analysts' forecast typically excludes one-time items.

For the year-ago third quarter, the company had reported a profit of $0.57 per share on sales of $4.76 billion.

The Framingham, Massachusetts-based company had reported a 10% increase in its October same-store sales, reflecting accelerated customer traffic throughout the month. The company's total sales for the month jumped 15% to $1.7 billion.

For September 2009, TJX's comparable store sales were up 7% and net sales rose 8% to $2.0 billion from $1.8 billion in the year-ago month.

TJX also posted October comparable sales increase of 12% at the Marmaxx Group, where customer traffic continued to drive sales throughout the month, boding well for the holiday season.

Carol Meyrowitz, president and chief executive officer of TJX Companies, Inc., then said, "Our consolidated comparable store sales increase of 10% in October reflects the strong momentum of our business. We believe our values and selection of great fashions and great brands continue to get even better and have broad reach across a wide range of customer demographic groups."

TJX also reported consolidated comparable store sales increase of 7% for the 13-week third quarter.

While announcing September same-store sales, TJX has projected fourth-quarter earnings from continuing operations in the range of $0.60 - $0.66 per share, based on consolidated comparable store sales increase of 3% to 5%. Previously, the company estimated earnings between $0.55 per share and $0.61 per share for the fourth quarter. Wall Street analysts forecast earnings of $2.59 per share for the quarter.

For the preceding second quarter, TJX's profit rose 27% year-over-year to $261.60 million or $0.61 per share. Income from continuing operations was $261.60 million or $0.61 per share, compared with $212.10 million or $0.48 per share last year. Net sales were up 4% from last year to $5.00 billion.

Among peers, Kohl's Corp. (KSS | Quote | Chart | News | PowerRating) has reported higher profit for the third quarter, driven by inventory management and expansion of exclusive brands. The Menomonee Falls, Wisconsin-based company's net income for the quarter was $193 million or $0.63 per share, compared to $160 million or $0.52 per share in the prior-year quarter. Quarterly net sales totaled $4.05 billion, 6.5% higher than the previous year's $3.80 billion. Comparable store sales rose 2.4% for the quarter.

Kohl's also stated that it currently projects fourth-quarter earnings per share between $1.14 and $1.24, an increase from the previously communicated outlook range of $0.99 - $1.06. Analysts have a consensus earnings estimate of $1.26 per share for the quarter.

Kohl's total sales growth for the fourth quarter is now expected to be in the range of 3% - 6%, compared to the company's prior guidance of negative 1% to positive 1%. In addition, the company revised its comparable store sales forecast between negative 1% and positive 2%, versus its previous forecast of negative 5% - negative 3%.

For fiscal 2009, Kohl's now forecasts earnings in the range of $2.98 - $3.08 per share, while analysts expect earnings of $3.027 per share. Earlier, the company expected full-year earnings in the range of $2.59 - $2.70 per share.

Another rival, Macy's Inc. (M | Quote | Chart | News | PowerRating) posted a narrower loss of $35 million or $0.08 per share for the third quarter, compared to a loss of $44 million or $0.10 per share a year ago. Net sales were down 3.9% to $5.28 billion from $5.49 billion in the previous year.

Macy's expects fourth-quarter earnings per share of $1.00 to $1.05, excluding restructuring-related costs. Wall Street analysts are of the view that the company would earn $1.14 per share in the quarter.

Macy's fourth-quarter same-store sales are currently expected to be down 1% to 2%, which calculates to a decline of 2.1% to 2.6% in the second half of 2009, which is better than the company's previous second-half outlook of a 5% to 6% decline.

TJX closed Monday's trading at $39.52, up $0.54, on a volume of 5.29 million shares.

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