TJX, the parent company behind T.J. Maxx, Marshalls and HomeGoods, is the IBD Stock Of The Day Wednesday. TJX stock flirted with an early buy point after beating first-quarter earnings forecasts Wednesday morning.
Earnings Beat
TJX earnings rose to 76 cents per share, leaping 55% from its diluted earnings of 49 cents last year and up 12% from adjusted year-earlier EPS of 68 cents. Total revenue rose 3.3% to $11.78 billion.
Analysts polled by FactSet expected first-quarter TJX earnings to rise to 72 cents per share on 3.6% revenue growth to $11.82 billion.
Total comparable sales for TJX rose 3% from last year, led by a 5% increase at its Marmaxx stores — the name of the combined Marshalls and T.J. Maxx locations. TJX noted "very strong" sales for its apparel and accessories product categories. HomeGoods comparable sales retreated 7% for the quarter.
However, the company's outlook was underwhelming for analysts. For Q2, TJX sees earnings of 72-75 cents per share, short of FactSet forecasts of 79 cents. TJX sees full-year earnings of $3.49-$3.58 per share, which includes a 10 cent per share benefit from an extra week in the fiscal calendar. FactSet projects earnings of $3.53 per share, improving from $3.11 per share last year.
Still, consumers are prioritizing affordable options as inflation takes a bite out of their wallets, which analysts think provides a boost to TJX. Traffic trends at discount stores improved in April, analysts noted. And there's a whole to fill in the market after Bed Bath & Beyond filed for bankruptcy on April 23, providing an opportunity for TJX and off-price rivals Ross Stores and Burlington.
TD Cowen raised its price target for TJX stock to 89 from 88 on May 12 and maintained its outperform rating on the shares.
TJX Stock
TJX stock jumped as high as 81.32 soon after the open, reversed slightly lower to 77.36 before closing up 0.9% to 78.98 Wednesday. In the morning, shares cleared an early entry at 79.81, just above weeks of tight action and close to the 21-day exponential moving average and 50-day line.
TJX stock has an official 83.23 buy point for its 19-week flat base. Aggressive investors could find TJX ranks second in the Retail-Apparel/Shoes/Accessories Group, according to the IBD Stock Checkup. It only trails Lululemon Athletica. TJX shares have an 87 Composite Rating, which combines various technical indicators into one easy-to-read score. Its relative strength line is off highs from early January and it has an 88 RS Rating.
Ross Stores reports Thursday with Burlington due next week.
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