Same-store sales at TJX Companies Inc. (TJX) inched down 1.0% for the five-week period ended April 2, 2011 compared with an increase of 12.0% posted in the year-ago period. March comparable-store sales ("comps") exceeded management’s expectations on both a consolidated basis and at The Marmaxx Group. Total retail sales in March 2011 were $ 2.04 billion, up 1.0% from $ 2.03 billion in March 2010.
For the nine-week period, same-store sales edged up 1%, while total sales spiked 2% to $ 3.5 billion.
Target Corporation. (TGT), a rival of TJX, posted March same-store sales decline of 5.5%, while net sales declined 4.5% to $ 5,955 million from $ 6,233 million in the year-ago period.
Store Update
As of April 7, 2011, the company operates 945 T.J. Maxx, 858 Marshalls, and 337 HomeGoods stores in the United States; 213 Winners, 82 HomeSense, 3 Marshalls, and 3 Stylesense stores in Canada; and 312 T.K. Maxx and 24 HomeSense stores in Europe.
Guidance
In the last earnings release, management said that it expects diluted earnings per share, on a reported basis, to be in the range of 60 cents to 67 cents for the first quarter of fiscal year 2012. The management is comfortable with the first quarter earnings per share guidance that it provided. The Zacks Consensus Estimate is currently pegged at 83 cents ,with full-year estimate of $ 4.33.
Conclusion
TJX Companies remains focused to meet customer demands. The company’s off-price business model is flexible, allowing it to react to market trends. The opportunistic buying and inventory management strategies give it the required flexibility to adjust assortments more frequently than traditional retailers.
TJX holds a Zacks #2 Rank, which translates into a short-term Buy rating. Currently, we maintain a long term Neutral recommendation on the stock.
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