TJX Companies posts 2 percent sales drop in Q2 but lifts FY23 outlook

The TJX Companies, Inc. reported net sales for the second quarter of 11.8 billion dollars, a decrease of 2 percent versus the second quarter of fiscal 2022.

The company’s U.S. comp store sales decreased 5 percent versus a 21 percent increase in U.S. open-only comp store sales in the second quarter of fiscal 2022. Net income was 809 million dollars and diluted earnings per share were 69 cents versus 64 cents per share in the second quarter of fiscal 2022.

Commenting on the results, Ernie Herrman, chief executive officer and president of The TJX Companies, Inc., stated in a statement: “I am very pleased that our second quarter pretax profit margin exceeded our plan and earnings per share were at the high end of our guidance. As to the top-line, U.S. comp sales for the second quarter came in lighter than we expected as we believe historically high inflation impacted consumer discretionary spending.”

“While we saw more softness in our home categories, we were very pleased that comp sales in our overall apparel business at Marmaxx were slightly positive every month of the quarter. In addition, it was good to see the improved profitability of our international divisions. We remain focused on our long-term vision to become an increasingly profitable, 60-billion dollars-plus revenue company,” added Herrman.

TJX reports H1 sales increase of 5 percent

For the first half of fiscal 2023, net sales were 23.2 billion dollars, an increase of 5 percent versus the first half of fiscal 2022. U.S. comp store sales for the period decreased 2 percent versus a 19 percent increase for the first half of fiscal 2022.

Net income for the first half was 1.4 billion dollars, while diluted earnings per share were 1.18 dollars versus 1.08 dollars in the first half of fiscal 2022 and adjusted diluted earnings per share were 1.36 dollars.

TJX updates full year earnings outlook

For the third quarter, the company expects pretax profit margin to be 10.1 percent to 10.4 percent and diluted earnings per share to be 77 cents to 81 cents.

For the third quarter, the company is planning U.S. comparable store sales to decrease 3 percent to 5 percent versus a 16 percent increase in the third quarter of fiscal 2022.

For the full year fiscal, the company is increasing its outlook for pretax profit margin and now expects it to be 9.3 percent to 9.5 percent and adjusted pretax profit margin to be 9.7 percent to 9.9 percent, versus its previous guidance for pretax profit margin of 9.2 percent to 9.4 percent and adjusted pretax profit margin of 9.6 percent to 9.8 percent.

For the full year, the company’s updated diluted earnings per share outlook expects the range between 2.87 dollars to 2.95 dollars and adjusted diluted earnings per share to 3.05 dollars to 3.13 dollars, versus its previous guidance for diluted earnings per share of 2.94 dollars to 3.01 dollars and adjusted diluted earnings per share of 3.13 dollars to 3.20 dollars.

U.S. comparable store sales are expected to decrease 2 percent to 3 percent, versus its previous guidance of an increase of 1 percent to 2 percent.

The company’s third quarter and full year outlook implies fourth quarter pretax profit margin to be 10.1 percent to 10.4 percent and earnings per share of 92 cents to 96 cents and U.S. comparable store sales to be flat to down 1 percent versus a 13 percent increase in the fourth quarter of fiscal 2022.

During the second quarter ended July 30, 2022, the company increased its store count by 21 stores to a total of 4,736 stores.