The TJX Companies (TJX, Financial), most well known for TJ Maxx and Marshalls stores, the largest off-price retailers in the United States, reported earnings on Tuesday. Here are some of the highlights from the press release and the conference call:
Net sales for the second quarter increased 8% to $5.5 billion, partially driven by a 4% increase in comparable store sales (+5% at TJ Maxx and Marshalls, +3% at HomeGoods, flat for TJX Europe, and -3% at TJX Canada) and new unit sales (32 net adds in the quarter). To put those figures in perspective, TJ Maxx/Marshalls was lapping a 3% comp, HomeGoods was lapping an 8% comp, TJX Europe was lapping a -4% comp, and TJX Canada was lapping a 6% comp in Q2 2011. For the first half of Fiscal 2012, net sales increased 6% to $10.7 billion, with consolidated comparable store sales increasing 3% compared to the first half of 2011.
Net income for the second quarter was $348 million, equal to diluted EPS of $0.90, an increase of 21.6% (the sixth consecutive quarter that diluted EPS increased by more than 20%) compared with $0.74 per share in the same period last year. This was largely driven by the Marmaxx segment (the domestic operations of TJ Maxx and Marshalls), which generated nearly $480 million in profit in the quarter, equal to 86% of company-wide pre-tax earnings.
After backing out a $0.01 non-operating item gain in 2011 and $0.03 in positive foreign currency exchange this year, diluted EPS increased 19.2% from 2011. Excluding these and other one-time items (such as the $0.08 impact from AJ Wright store closings and $0.03 in store conversion costs in the first six months of 2012), adjusted diluted EPS increased 10% to $1.68 (from $1.53 in 2011) for the first half of the year.
During the second quarter, the Company spent a total of $311 million repurchasing 5.9 million shares of TJX stock. For the first half of the year, they have spent $673 million to repurchase 13.1 million shares, an average cost of $51.37 per share. Management still expects to repurchase roughly $1.2 billion of TJX stock for fiscal year 2012. The number of weighted averaged diluted shares outstanding at the end of Q2 was 387.6 million, a decrease of 5.4% compared to the same period last year.
Heading into the back half of the year, management stressed that they are excited about the opportunities that they still see, especially domestically. Here is what CEOCarol Meyrowitz had to say about some of their plans for the last six months of FY 2012:
“Ihave never been more excited about our back half marketing. I love our marketing plans and ideas, and I'm confident that these efforts will continue to drive customer traffic. While we're increasing our advertising spend slightly this year, we are gaining much higher penetration. We're deploying what we would have been A.J. Wright ad dollars to other divisions, and also doing a much better job of leveraging our spending across the company. I believe our marketing campaigns are stronger than ever, and you will be seeing a lot of us in the back half… We believe that the enhanced marketing, combined with our improved shopping environment and experience, will help us increase our customer base and our market penetration. We still have tremendous opportunities in the front of us -- in front of us. While we improve this year, our data tells us that there [are] still 75% of U.S. shoppers who have not visited a T.J. Maxx or Marshalls in the past 12 months.”
Management raised their outlook for 2012 EPS (on a GAAP basis) to the range of $3.78 to $3.86, suggesting an increase of 15-17% compared with $3.30 in EPS from continuing operations (GAAP basis) in 2011. Excluding costs associated with A.J. Wright, adjusted diluted EPS is expected to be in the range of $3.89 to $3.97, which represents an 11-14% increase over the prior year’s adjusted EPS of $3.49. In terms of sales, the company expects comps to come in between 2-3% for the full year, and 1-2% in the second half of the year.
The stock closed just below $55/share on Tuesday, an increase of 2.44% compared to the open.
Net sales for the second quarter increased 8% to $5.5 billion, partially driven by a 4% increase in comparable store sales (+5% at TJ Maxx and Marshalls, +3% at HomeGoods, flat for TJX Europe, and -3% at TJX Canada) and new unit sales (32 net adds in the quarter). To put those figures in perspective, TJ Maxx/Marshalls was lapping a 3% comp, HomeGoods was lapping an 8% comp, TJX Europe was lapping a -4% comp, and TJX Canada was lapping a 6% comp in Q2 2011. For the first half of Fiscal 2012, net sales increased 6% to $10.7 billion, with consolidated comparable store sales increasing 3% compared to the first half of 2011.
Net income for the second quarter was $348 million, equal to diluted EPS of $0.90, an increase of 21.6% (the sixth consecutive quarter that diluted EPS increased by more than 20%) compared with $0.74 per share in the same period last year. This was largely driven by the Marmaxx segment (the domestic operations of TJ Maxx and Marshalls), which generated nearly $480 million in profit in the quarter, equal to 86% of company-wide pre-tax earnings.
After backing out a $0.01 non-operating item gain in 2011 and $0.03 in positive foreign currency exchange this year, diluted EPS increased 19.2% from 2011. Excluding these and other one-time items (such as the $0.08 impact from AJ Wright store closings and $0.03 in store conversion costs in the first six months of 2012), adjusted diluted EPS increased 10% to $1.68 (from $1.53 in 2011) for the first half of the year.
During the second quarter, the Company spent a total of $311 million repurchasing 5.9 million shares of TJX stock. For the first half of the year, they have spent $673 million to repurchase 13.1 million shares, an average cost of $51.37 per share. Management still expects to repurchase roughly $1.2 billion of TJX stock for fiscal year 2012. The number of weighted averaged diluted shares outstanding at the end of Q2 was 387.6 million, a decrease of 5.4% compared to the same period last year.
Heading into the back half of the year, management stressed that they are excited about the opportunities that they still see, especially domestically. Here is what CEOCarol Meyrowitz had to say about some of their plans for the last six months of FY 2012:
“Ihave never been more excited about our back half marketing. I love our marketing plans and ideas, and I'm confident that these efforts will continue to drive customer traffic. While we're increasing our advertising spend slightly this year, we are gaining much higher penetration. We're deploying what we would have been A.J. Wright ad dollars to other divisions, and also doing a much better job of leveraging our spending across the company. I believe our marketing campaigns are stronger than ever, and you will be seeing a lot of us in the back half… We believe that the enhanced marketing, combined with our improved shopping environment and experience, will help us increase our customer base and our market penetration. We still have tremendous opportunities in the front of us -- in front of us. While we improve this year, our data tells us that there [are] still 75% of U.S. shoppers who have not visited a T.J. Maxx or Marshalls in the past 12 months.”
Management raised their outlook for 2012 EPS (on a GAAP basis) to the range of $3.78 to $3.86, suggesting an increase of 15-17% compared with $3.30 in EPS from continuing operations (GAAP basis) in 2011. Excluding costs associated with A.J. Wright, adjusted diluted EPS is expected to be in the range of $3.89 to $3.97, which represents an 11-14% increase over the prior year’s adjusted EPS of $3.49. In terms of sales, the company expects comps to come in between 2-3% for the full year, and 1-2% in the second half of the year.
The stock closed just below $55/share on Tuesday, an increase of 2.44% compared to the open.
