TJX Companies Q4 Profit Rises; Hikes Dividend, Announces Share Buyback

(RTTNews) - Off-price retailer TJX Companies, Inc. (TJX) on Wednesday reported a 29 percent increase in profit for the fourth quarter from last year, reflecting higher sales and a tax benefit. Adjusted earnings per share missed analysts' expectations, while revenues beat their estimates.

The company also said it plans to increase the dividend by 25 percent and buy back about $2.5 billion to $3.0 billion of its stock during fiscal 2019. Looking ahead, the company forecast earnings for the first quarter and fiscal 2019 below the Street estimates. Shares of the company are gaining more than 8 percent in pre-market trades.

TJX Companies' fourth-quarter net income rose to $877.28 million or $1.37 per share from $677.93 million or $1.03 per share in the prior-year quarter.

The latest quarter's results include a net benefit of $0.17 per share due to items related to the 2017 Tax Act, a benefit of about $0.11 per share from the extra week in the quarter, and an impairment charge of $0.10 per share related to Sierra Trading Post.

Adjusted earnings were $1.19 per share, compared to $1.03 per share in the year-ago period. On average, analysts polled by Thomson Reuters expected earnings of $1.27 per share. Analysts' estimates typically exclude special items.

Net sales grew 16 percent to $10.96 billion from $9.47 billion in the same quarter last year and beat analysts' consensus revenue estimate of $10.76 billion.

Consolidated comparable store sales rose 4 percent, compared to an increase of 3 percent in the same period last year. The increase was driven by strong customer traffic.

For the first quarter of fiscal 2019, TJX Companies forecast earnings in a range of $1.00 to $1.02 per share, and adjusted earnings of $0.85 to $0.87 per share, based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent. Analysts expect the company to earn $0.99 per share for the quarter.

For the 52-week fiscal year ending February 2, 2019, the company expects reported earnings of $4.73 to $4.83 per share and adjusted earnings of $4.00 to $4.08 per share, based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent. The Street expects the company to earn $4.62 per share for the year.

TJX intends to increase the regular quarterly dividend on its common stock to be declared in April 2018 and payable in June 2018 by 25 percent to $0.39 per share, subject to the approval of the board of directors.

With $1.1 billion remaining at fiscal 2018 year-end under TJX's stock repurchase programs, the board approved a new stock repurchase program that authorizes the repurchase of up to an additional $3.0 billion of TJX common stock from time to time.