Earnings Preview: TJX Companies

Aug.11.08 | About: TJX Companies (TJX)

TJX Companies (NYSE:TJX) is expected to report Q2 earnings before market open Tuesday, Aug. 12, with a conference call scheduled for 11:00 am ET.


Analysts are looking for a profit of 45c on revenue of $4.61B. The consensus range is 44c to 45c for EPS, and revenue of $4.57B to $4.65B, according to First Call.

Analyst Views

In May, TJX forecast FY09 EPS $2.20 to $2.25 vs. First Call consensus of $2.26 and, in July, raised its Q2 view to 44c to 45c from 40c to 42c; TJX reported June same-store sales increased 5% vs. expectations of a 3.5% increase. CEO Carol Meyrowitz credited summer weather for helping demand for the June results, though Zacks Research believes TJX's lower prices were "probably the primary driver" behind the better sales. Meyrowitz believes the positive momentum for her company will continue.

Contrary to most retailers, analysts believe, TJX Companies has performed "relatively well" this year, and the company has said its business was not as adversely affected as others in the weak economy. Between the faltering economy, soaring food and gas prices, limited credit, slumping home prices and worries about jobs, shoppers remain unnerved and have cut back spending on discretionary items. Instead of spending at department stores, consumers are flocking to wholesale clubs and discount apparel chains.

According to people with knowledge of the sale process, the off-price retailer is said to be looking to selling its Bob's Stores unit, its smallest division. Potential buyers may include Versa Capital. C.L. King believes a sale of Bob's would be a positive, though it would not have a long-lasting impact on TJX's shares.

Next event: TJX Companies is expected to release July sales on August 14.