TJX raises profit view, shares rise

Off-price retailer TJX Cos Inc posted a bigger quarterly profit that topped Wall Street estimates on strong sales in Europe, and raised its full-year forecast, sending shares up as much as 7 percent Tuesday.

Photo: T J Maxx

The owner of Marshalls and T.J. Maxx expects to earn between $2.27 and $2.37 a share for the full year. Earlier this month, TJX raised its full-year forecast to a profit of $2.26 per share to $2.36 per share.

The retailer, which sells designer brands at big discounts compared to department stores, earned $419.2 million, or 55 cents a share, for the first quarter ended April 28. It earned $266.0 million, or 34 cents a share, a year earlier.

Analysts, on average, expected earnings of 54 cents a share, according to Thomson Reuters I/B/E/S.

"Momentum into May reflects continued traffic and share gains in our view, as consumers are unlikely to migrate away from TJX's value proposition," UBS analyst Roxanne Meyer said in a note to clients.

As previously reported, TJX's same-store sales, or sales at stores open at least a year, rose 8 percent, helping by more shoppers coming through its doors.

Same-store sales in Europe rose 13 percent during the quarter.

"Off-pricers perform well in both good times and bad, and this should favor the company in Europe, which represents about 12 percent of sales," Nomura analyst Paul Lejuez wrote in a note.

"With ... what we view as conservative guidance, we believe the company can exceed its guidance and consensus estimates this year," he said.

Shares rose as high as $42.62 before easing to $42.02, up 5.8 percent.