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TJX Q4 profit meets, sales rise 6%

22nd Feb 2012, 12:58 pm by Brad Lemaire
TJX Q4 profit meets, sales rise 6%

Discount retailer of apparel and home fashions TJX Cos. (NYSE:TJX) posted Wednesday fourth quarter sales and earnings in line with market expectations, amid comparable store sales growth and higher margins.

The company, headquartered in Massachusetts, operates its stores under the T.J. Maxx, Marshalls, HomeGoods, Winners, HomeSense and T.K. Maxx trademarks.

For the 13-week period that ended January 28, the company said net sales grew six percent to $6.7 billion, matching analysts’ estimates.

Net income from continuing operations jumped to $475 million, or 62 cents a share, compared to a prior year profit of $334.4 million, or 42 cents a share.

Analysts polled by Bloomberg were expecting earnings per share of 62 cents.

“I am extremely proud of our performance in 2011, which marked another great year for TJX and underscores the power of our flexible business model to perform in almost any kind of economic environment,” chief executive Carol Meyrowitz said in a statement.

Consolidated comparable store sales for the quarter increased seven percent over the prior year. This is a key figure to gauge a retailer’s financial health because it excludes sales from stores that recently opened or closed during the year.

Quarterly gross margins expanded to 27.2 percent from 26.3 percent.

The company’s board also revealed plans to buy back about $2 billion of its own stock, which marks the 13th share repurchase program approved since 1997.

Additionally, the discount retailer also announced on Wednesday it intends to increase its dividend to 11.5 cents per share, which will be paid in May 2012.

This increase represents a 21 percent hike and marks the 16th consecutive year the company has raised its dividend, it said.

Looking ahead, Meyrowitz noted that thanks to “favourable weather patterns” in February, same store sales are trending toward a seven percent increase for the month.

For fiscal 2013, the company plans to invest into its supply chain, infrastructure, new stores and store re-modelling, as well as into building an e-commerce business.

The company has 983 T.J. Maxx, 884 Marshalls, and 374 HomeGoods stores in the U.S.; 216 Winners, 86 HomeSense, and 6 Marshalls stores in Canada; and 332 T.K. Maxx and 24 HomeSense stores in Europe.

The retailer’s share price shed 1.42 percent to $34.72 in trade on the New York Stock Exchange on Wednesday afternoon.

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