Physical retailers rebounded in 2021 after posting significant losses during the pandemic. However, supply chain disruptions, labor issues and inflationary pressures dampened the recovery somewhat.
The Massachusetts-based TJX Companies, Inc. (NYSE: TJX) is one such retailer that offers discounted clothing and home fashion at more than 4,700 discount stores in nine countries. It accounts for a very small share of e-commerce sales and therefore the forced closure of stores during lockdowns has had a substantial impact on its operations.
Despite supply chain issues and cost pressure, TJX Companies reported strong revenue for the first quarter of fiscal 2023. Following the news, the retailer’s shares rose 7.14% at the close. of Wednesday.
Results in detail
TJX Companies reported net sales of $11.4 billion in the quarter, up 13% year-over-year, but fell short of analysts’ expectations of $11.58 billion . U.S. comparison store sales growth was flat in the quarter, compared to a 17% jump in U.S.-only comparison store sales in the same quarter last year.
On a segment basis, US Marmaxx net sales were $6.9 billion, up 4.5% year-over-year, while US HomeGoods division net sales declined 4.8% to $2 billion.
Additionally, TJX Canada recorded net sales of $1.1 billion, up 41.3%, while TJX International (Europe and Australia) recorded net sales of $1.4 billion, which more than doubled year on year.
TJX Companies reported adjusted earnings of $0.68 per share, beating Street’s estimate of $0.60 per share.
The adjusted consolidated pre-tax margin was 9.4%, compared to 7.2% in the first quarter of fiscal 2022-2022. Reduced COVID-related expenses and other factors benefited the margin, partially offset by pressure from transportation costs and wages.
As of April 30, 2022, the company had $4.3 billion in cash.
During the first quarter, TJX Companies returned $907 million to shareholders through stock buybacks and dividends. The company repurchased 9.5 million shares for a total cost of $600 million and paid $307 million in dividends.
For the second quarter of fiscal 2023, the company expects U.S. same-store sales to decline 1% to 3%. Additionally, earnings are expected to be between $0.65 and $0.69 per share.
For fiscal 2023, U.S. same-store sales are expected to increase 1% to 2%. Meanwhile, Adjusted EPS is expected to land between $3.13 and $3.20.
Looking ahead, TJX Companies CEO Ernie Herrman said, “For the full year, we see an opportunity to further improve our profitability…We believe our value proposition is more compelling than ever. for consumers in today’s retail environment, and we are excited about our initiatives to drive customer traffic and sales. We remain focused on our long-term vision of becoming an increasingly profitable $60 billion+ business.
The consensus among analysts is a strong buy based on 15 buys versus three holds. The average TJX company price target of $75.53 implies a potential upside of 25.49% from current levels. However, stocks have lost 9.2% over the past year.
TipRanks website traffic tool which uses data from SEMrush Holdings (SEMR) provides insight into the performance of TJX Companies.
According to the tool, an upward trend in website traffic was visible. In the first quarter of fiscal 2023, total estimated visits to marshalls.com, sierra.com and tjmaxx.com showed an upward trend, globally, representing a 21.1% jump from compared to the first quarter of fiscal 2022.
Predictions based on website visits data from TipRanks proved correct, with TJX companies reporting an increase in year-over-year revenue in the first quarter of 2023.
Investors can add TJX Companies to their portfolio due to the company’s excellent analyst ratings, decent stock market performance, strong earnings, and positive outlook. Also, observing website trends reflected on TipRanks website traffic tool could be a prudent guide for investment decisions.
Learn more about the Website Traffic tool in this video from YouTube sensation Tom Nash.
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