TJX Companies on Wednesday reported strong first-quarter results, sending shares of the retailer higher and showcasing why we’ve owned the stock for years. Revenue in the three months ended May 2 increased 9.2% year over year to $14.32 billion, exceeding the consensus estimate of $14.03 billion, according to LSEG. Earnings per share (EPS) jumped 29.3% to $1.19, also exceeding expectations of $1.02, LSEG data showed. Same-store sales increased 6%, ahead of the 4.1% Street estimate, according to FactSet. Shares of TJX are up 6% as of midday trading. It’s a much-needed rebound after a tough month that saw the stock fall more than 10% from its April highs. Not that we were necessarily complaining, because on Friday we used that pullback as an opportunity to add to our position for the first time in 10 months. But it’s encouraging to see Wednesday’s numbers validate that decision. In addition to the strong results, management raised its full-year outlook for earnings per share, with the new target roughly matching Wall Street expectations. To be sure, TJX’s new full-year sales outlook — along with its sales and EPS guide for the ongoing quarter — came up a bit short versus the consensus. But we aren’t concerned because history tells us management is keeping it conservative, setting the team up to overdeliver when all is said and done. The stock reaction is a clear signal the market understands this to be the case as well. TJX YTD mountain TJX’s year-to-date stock performance. Bottom line TJX has certainly found its groove, reporting its fifth consecutive quarter of sales beats across all four operating segments: Marmaxx (Marshalls, T.J. Maxx and the much smaller Sierra in the U.S.), HomeGoods, TJX Canada, and TJX International (Europe & Australia). The company’s business model, which is all about picking up excess inventory from high-quality brands and retailers at a discount and passing the savings along to shoppers, continues to strike a chord with consumers worn down by years of elevated inflation. And that was even before the Iran war sent oil prices soaring and rekindled inflation, which in April reached its hottest annual rate since May 2023 at 3.8%. Same-store sales — defined by TJX as sales at locations or e-commerce sites that have been in operation for at least two consecutive fiscal years — rose 6% in the quarter, well above the 4.1% consensus analyst estimate. It also marked a sequential acceleration from 5% growth in the November-to-January quarter. By division, same-store sales accelerated sequentially at Marmaxx (5% to 6%) and HomeGoods (6% to 9%), with both results coming in better than the 3.9% and 4% consensus, respectively. At TJX Canada and TJX International, the growth rates matched the prior quarter at 7% and 4%. The Canadian operations exceeded the 5% consensus, while the European and Australian segment was in line. On the call, CFO John Klinger said the strong comparable sales growth in the quarter was “driven…
Read More: TJX delivers a strong quarter, shows it’s a winning retail stock