TJX Posts Strong Q3 Earnings, But Profit Forecast Falls Short

Shares of TJX, the parent company of TJ Maxx and HomeGoods, experienced a decline after the off-price retailer reported impressive quarterly numbers. However, the issued profit forecast did not meet expectations.

Strong Financial Results

In the fiscal third quarter, TJX posted earnings of $1.03 per share, surpassing analysts' consensus call of 99 cents, according to FactSet. This represents a significant increase from the 91 cents per share earned during the same period last year.

Moreover, TJX reported sales of $13.27 billion, outperforming expectations of $13.09 billion. The company also witnessed a remarkable 6% increase in comparable-store sales.

Fourth Quarter Outlook

Despite the impressive performance in Q3, TJX's profit forecast for the fourth quarter fell below analysts' expectations. The management anticipates a 3% to 4% growth in overall comparable-store sales and earnings ranging from $1.07 to $1.10 per share. Analysts were initially projecting a 3.5% growth in comparable-store sales and earnings of $1.12 per share.

Additionally, TJX has raised its financial guidance for the current fiscal year ending on Feb. 3, 2024.

Holiday Shopping Season Expectations

President and CEO Ernie Herrman expressed confidence in TJX's position as a sought-after shopping destination for gifts during the holiday season. Herrman stated, "We are strongly positioned as a shopping destination for gifts this holiday selling season and are convinced that our values and fresh shipments to our stores and online throughout the season will be a major draw again this year."

Stock Performance

Following the earnings release, TJX shares experienced a 2.2% decline in premarket trading, settling at $90.46. It is worth noting that TJX was previously recommended as a stock pick earlier this year.