Yahoo Finance TJX Companies Surges After Strong Q1 Earnings and Conservative Guidance
TJX Companies Inc. (NYSE:TJX) saw a significant rise in its stock price following a robust Q1 earnings report. Despite Q2 EPS guidance falling below analyst expectations, investors remain confident due to TJX's conservative guidance approach. This was evident when the company raised its FY25 EPS guidance, which still fell short of consensus estimates, indicating analysts are aware of TJX's tendency to provide cautious forecasts.
Total Q1 comps increased by 3%, at the high end of prior guidance of 2-3%, though below Q4's 5% comp. Growth was driven by customer transactions, with comps in both apparel and home categories rising, and home outperforming apparel.
TJX's largest segment, Marmaxx (US), which includes TJ Maxx and Marshalls, saw segment comps of 2%, lapping a strong 5% comp last year. HomeGoods led with a 4% comp, benefiting from easy -7% comps last year. Other segments posted comps as follows: TJX Canada 4%; TJX Intl (Europe & Australia) 2%. The company guided Q2 comps to 2-3% and reaffirmed full-year comps at 2-3%.
Overall, it was a strong quarter for TJX. The retailer's exposure to discretionary items like apparel and home goods hasn't been a hindrance. Instead, TJX appears to be thriving, possibly due to a trade-down effect where higher-income consumers are shopping more at TJ Maxx, Marshalls, and HomeGoods to maximize their budgets.
TJX's positive results suggest a favorable outlook for other off-price retailers reporting soon: Ross Stores Inc (NASDAQ:ROST) (May 23 after the close), Burlington Stores (NYSE:BURL) (May 30 before the open), and Big Lots Inc (NYSE:BIG) (June 6 before the open). The stock has been on a steady upward trend since late May 2023, recently surpassing the $100 mark. It had been trading in a $93-102 range since early January, but this report has pushed TJX to a new all-time high.
This article first appeared on GuruFocus.
