TJX Inc, the parent company of TJ Maxx, has increased its annual profit forecast, benefiting from a reduction in cost pressures despite a cautious consumer approach to discretionary spending.
But the retailer fell short of first-quarter revenue estimates and joined other major retailers, including Target and Home Depot, in projecting a challenging second quarter due to persistent inflationary pressures.
Despite these challenges, the company maintained its annual sales forecast and saw its gross margin improve by 1% to 28.9%, reflecting a decrease in expenses after months of grappling with high costs related to raw materials, labor, and freight.
In the first quarter of fiscal 2024, net sales amounted to $11.8 billion, a 3% increase compared to the same period in fiscal 2023 but slightly below analyst estimates. Overall comparable store sales also grew by 3%.
Net income for the three-month period to end April 29, 2023 reached $891 million, and diluted earnings per share stood at $0.76, representing a significant 55% rise from $0.49 in the first quarter of fiscal 2023.
Moreover, the diluted earnings per share showed a 12% increase compared to the adjusted diluted earnings per share of $0.68 in the same period last year.
TJX now expects adjusted profit per share for 2024 between $3.39 and $3.48, compared to the previous range of $3.29 to $3.41, although it fell short of analysts' estimates.
Shares rose in early trading, up 3.3% to around $80.89.
Contact Angela at angela@proactiveinvestors.com
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