TJX Cos. shared big plans for a dividend hike and share buybacks Wednesday after issuing a mixed report for the holiday quarter and giving soft earnings outlook for the new fiscal year. TJX stock fell near a buy point.
The TJX earnings report kicks off a parade of discount and bargain retailer reports.
Amid inflation, investors await further TJX commentary on consumer sentiment.
On Tuesday, big-box retailers Walmart and Home Depot said they were getting ready for a consumer slowdown. Generally speaking, TJX is seen as resilient in good markets and bad.
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TJX Earnings
Estimates: Analysts polled by FactSet expected TJX earnings for the January-end quarter to grow 14.4%, year over year, to 89 cents per share. Revenue was seen rising 1.5% to $14.067 billion.
Total same-store sales, including domestic and international, were seen up 1.1%. That would mark the first gain in four quarters.
Results: TJX earnings of 89 cents a share, in line with expectations. Revenue rose 5% to $14.5 billion, ahead of views.
"Our eclectic, rapidly changing mix of gift giving assortments clearly resonated with consumers this holiday season," CEO Ernie Herrman said in the TJX earnings release early Wednesday. "We saw fourth quarter U.S. comp store sales growth of 4%, well above our plan, and U.S. customer traffic increase."
In the U.S., Q4 revenue grew 8% at Marmaxx and fell 4% at HomeGoods. Marmaxx — which includes the T.J. Maxx, Marshalls, and Sierra stores — is the company's biggest revenue segment. Q4 revenue grew 3% in Canada and 1% in other international markets.
TJX also announced plans for a 13% dividend hike and $2 billion-$2.5 billion in share buybacks.
Outlook: TJX guided Q1 EPS of 68 cents-71 cents, and fiscal 2024 EPS of $3.39 to $3.51. Both were below FactSet analyst consensus at 74 cents and $3.56, respectively.
TJX Stock
Shares of TJX Cos. lost 1.7% to 77.46 on the stock market today, falling further below the 50-day moving average. TJX stock remains below an 81.27 buy point after stumbling into Q4 earnings.
The relative strength line for TJX stock has retreated from early January highs after surging last year, the MarketSmith chart shows. A rising RS line means that a stock is outperforming the S&P 500.
'Recession-Proof' Retailer
Last November, TJX, a leading off-price apparel and home furnishings retailer, largely tied its Q3 EPS beat to favorable timing of expenses, saying it expects that to "reverse out" in the fourth quarter.
TJX is known for its "treasure-hunt" shopping experience. Usually, TJX earnings tend to be resilient vs. those of its full-price retail peers.
Last year, investor optimism about the retailer weathering a downturn pushed TJX stock sharply higher. Analysts at Cowen described TJX as the "most recession proof" name in softlines retail.
Among other discount and bargain retailers, Target earnings are due Feb. 28 before the market open. Ross Stores reports the same day after the close.
BJ's Wholesale Club follows March 9. BJ stock earns a spot on the IBD 50 list of top growth stocks.
