TJX's stock heads for record as better-than-expected quarterly sales offset soft guidance

By Ciara Linnane

Discount retailer plans to hike its dividend by 13% in fiscal 2025 and buy back up to $2.5 billion of its stock

TJX Cos. Inc.'s stock rose 0.5% on Wednesday to put it on track for a fresh record, as investors weighed better-than-expected sales in the fiscal fourth quarter against guidance for fiscal 2025 that lagged estimates.

Also supporting the stock, the Framingham, Mass.-based company (TJX) said it expects to increase its dividend by 13% and buy back $2 billion to $2.5 billion of stock in fiscal 2025.

Chief Executive Ernie Herrman said the numbers were ahead of the company's own expectations and were buoyed by holiday shopping at the year's end.

"We believe our gift-giving selections offered customers something for everyone on their list, and we see being a gift-giving destination as a year-round opportunity for our business," Herrman told analysts on the company's earnings call, according to a FactSet transcript.

The company chalked up more than $50 billion of sales for all of 2023 and is confident it can continue to grow in all of its markets around the world, he added.

TJX posted net income of $1.403 billion, or $1.22 a share, for the quarter through Feb. 3, up from $1.038 billion, or 89 cents a share, in the year-earlier period. Adjusted per-share earnings came to $1.12, matching the FactSet analyst consensus.

Sales rose to $16.411 billion from $14.520 billion year over year, ahead of the $16.202 billion FactSet consensus. Same-store sales rose 5%, beating the FactSet consensus of 4.3%.

Herrman said the company had a strong finish to 2023, with comparable sales growing at every division. That's after the company's guidance ahead of the fourth quarter came in below consensus.

The company's guidance for the first quarter and full fiscal year 2025 was also soft. TJX is expecting first-quarter same-store sales to rise 2% to 3% and for EPS to range from 84 cents to 86 cents. The FactSet consensus is for same-store sales growth of 3.8% and EPS of 86 cents.

For fiscal 2025, the company is guiding for same-store sales to be up 2% to 3% and for EPS to range from $3.94 to $4.02. The FactSet consensus is for same-store sales to grow 3.6% and for EPS of $4.11.

TJX, which also operates the Marmaxx and HomeGoods chains, said same-store sales rose 5% at Marmaxx in the fourth quarter and were up 7% at HomeGoods.

At TJX Canada, same-store sales rose 6%, while they were up 3% at TJX International, which includes Europe and Australia. Same-store sales at the flagship TJ Maxx brand were up 5%.

Gross profit margins stood at 29.8%, a 3.7 percentage-point increase from the year-earlier period.

The stock has gained 31% in the last 12 months, while the S&P 500 has gained 28%.

-Ciara Linnane

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02-28-24 1428ET

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