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The TJX Companies Inc. (NYSE:TJX) reported adjusted earnings of 78 cents per share for the first quarter ended April 30, 2011 missed the Zacks Consensus Estimate of 80 cents and declined 2.5% from the prior-year quarter.

Quarterly Details

Total net sales during the quarter grew 4.1% year-over-year to $5,220.3 million, which was above the Zacks Consensus Estimate of $5,180.0 million. TJX's consolidated same-store sales increased 2.0% in the quarter driven by same-store sales growth at Marmaxx (+4.0%) and Home Goods (+6.0%), partially offset by a decline of 5.0% in TJX Europe and a decline of 3.0% in TJX Canada.

On an adjusted basis, total net sales grew 3.9% to $5,211.0 million. TJX's adjusted gross profit rose 2.3% year-over-year to $1,400.0 million, while gross margin contracted by 40 basis points to 26.9%. Improved buying and occupancy cost leverage were more than offset by the impact of mark-to-market adjustments and lower merchandise margins.

Selling, general and administrative expenses (SG&A), as a percentage of sales increased 70 basis points from the prior-year period to 17.1%. Costs associated with deleverage of company's European business and timing of certain expense items drive SG&A expenses upward.

Accordingly, TJX's adjusted operating income (gross profit less SG&A) inched down of 7.1% from the prior-year quarter to $508.0 million. Operating margin during the reported quarter contracted 120 basis points from the prior-year period to 9.7%.

Cash Flow, Balance Sheet and Share Repurchase

TJX exited the quarter with cash and cash equivalents of $1,377.1 million, compared to $1,833.3 million in the year-ago period. Quarter-end long-term debt was $774.4 million with shareholders equity of $3,123.4 million. The company generated $143.1 million of cash from operations and deployed $226.1 million towards capital expenditure and $58.6 million towards dividend payments.

During the reported quarter, the company repurchased shares worth $361.0 million. For full year, the company intends to repurchase shares worth $1.2 billion.

Second-Quarter and Full Year Outlook

Moving forward, TJX expects second-quarter ended July 31, 2011 earnings per share in the range of 81 cents to 86 cents based on same-store sales growth of 1.0% to 3.0%.

Moreover, for the full year, management expects earnings in the range of $3.81 to $3.93 per share based on same-store sales growth of 1.0% to 2.0%.

TJX, which competes with Kohl's Corporation (NYSE:KSS) and Macy's Inc. (NYSE:M), currently, has a Zacks #2 Rank, implying a short-term Buy rating on the stock. Besides, the company retains a long-term Neutral recommendation.

Source: TJX Sees Increase in Revenue, Profits