The TJX Companies, Inc. TJX posted strong third-quarter fiscal 2025 results, wherein the top and bottom lines increased year over year and beat the Zacks Consensus Estimate. With stronger-than-expected profitability in the fiscal third quarter, management is raising its full-year guidance for pretax profit margin and earnings per share (EPS).
TJX Companies’ earnings were $1.14 per share, rising 11% year over year. The metric surpassed the Zacks Consensus Estimate of $1.09.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net sales came in at $14,063 million, up 6% year over year (up 5% at constant currency). The top line surpassed the Zacks Consensus Estimate of $13,960.6 million. In the Marmaxx (U.S.) division, the company’s net sales came in at $8,438 million, up 4% year over year. Net sales amounted to $2,355 million, up 7% year over year, in the HomeGoods (U.S.) division. TJX Canada’s net sales came in at $1,382 million, up 5% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,888 million, up 16% year over year.
The company witnessed a 3% jump in consolidated comparable store sales, reaching the upper end of its forecast. This growth was fully attributed to an increase in customer transactions. Comparable store sales rose 2% at Marmaxx (U.S.), 3% at HomeGoods (U.S.), 2% at TJX Canada and 7% at TJX International (Europe & Australia).
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote
The pretax profit margin was 12.3%, up 0.3 percentage points from the year-ago quarter’s level, driven by the timing of specific expenses, cost-saving measures and an increase in net interest income.
The gross profit margin came in at 31.6%, up 0.5 percentage points year over year, mainly backed by higher merchandise margin. Selling, general and administrative (SG&A) costs, as a percent of sales, were 19.5%, a 0.1 percentage point increase.
TJX’s Financial Health Snapshot
During the quarter, the Zacks Rank #3 (Hold) company added 56 stores, ending the quarter with 5,057 stores.
TJX Companies ended the quarter with cash and cash equivalents of $4,718 million, long-term debt of $2,865 million and shareholders’ equity of $8,173 million. TJX generated an operating cash flow of $1 billion during the third quarter of fiscal 2025.
During the quarter, the company returned $997 million to shareholders. TJX Companies repurchased $574 million worth of stock, retiring 5 million shares. The company paid out $423 million in shareholder dividends in the same time frame. In the first nine months of fiscal 2025, TJX returned $2.9 billion to shareholders. Management expects to make share repurchases worth $2.25-$2.5 billion in the fiscal year ending Feb. 1, 2025.
Consolidated inventories (on a per-store basis) as of Nov. 2, 2024, fell 2% year over year on a reported and constant currency basis. Management is strategically positioned to capitalize on the exceptional availability in the marketplace, offering a diverse selection of exciting gifts both in-store and online throughout the holiday season.
TJX’s Other Key Developments
In the third quarter of fiscal 2025, the company completed a $179 million cash investment in a joint venture with Grupo Axo, a global brand operator in Mexico and South America. According to the terms of the definitive agreements, TJX holds a 49% stake, while Axo owns 51% of the joint venture.
After the quarter under review, the company acquired a 35% minority stake in Brands For Less (BFL) for $344 million. Based in Dubai, BFL is the leading off-price retailer in the region, offering branded apparel, toys and home fashions, with over 100 stores in the UAE and Saudi Arabia, along with an e-commerce platform. In addition, TJX plans to expand into Spain with its TK Maxx brand in early 2026.
Image Source: Zacks Investment Research
What to Expect From TJX Moving Forward?
The company has had a strong start to fourth-quarter fiscal 2025 and is excited about the opportunities ahead for the holiday season. Both in-store and online, TJX is offering customers an impressive shopping experience, featuring a wide selection of gifts at great value.
For the fiscal fourth quarter, the company expects consolidated comparable store sales to increase by 2% to 3%. The pretax profit margin is estimated to be between 10.8% and 10.9%, with EPS projected in the range of $1.12 and $1.14. The adjustment in the fiscal fourth-quarter outlook reflects the anticipated reversal of the third-quarter benefit from the timing of certain expenses.
For the fiscal 2025, the company continues to forecast consolidated comparable store sales to rise by 3%. Management has raised its pretax profit margin outlook to 11.3% and increased its EPS guidance to a range of $4.15 to $4.17 for the full year. Earlier, the company had anticipated the fiscal 2025 pretax profit margin to be nearly 11.2% and EPS in the $4.09-$4.13 band.
Shares of the company have dropped 0.5% in the past three months compared with the industry’s decline of 0.9%.
Stocks Looking Red Hot
Deckers DECK, a footwear and accessories dealer, currently sports a Zacks Rank #1 (Strong Buy). DECK delivered an average earnings surprise of 41.1% in the trailing four quarters.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and earnings indicates growth of 13.6% and 12.6%, respectively, from the year-ago reported figures.
Dillard's, Inc. DDS, a department store retailer, presently carries a Zacks Rank #2 (Buy). DDS has a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Dillard's current financial-year sales suggests a dip of 5.1% from the year-ago reported figure.
Urban Outfitters Inc. URBN is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Urban Outfitters’ current financial year sales and earnings indicates advancements of 5.8% and 12.3%, respectively, from the prior-year figures. URBN has a trailing four-quarter average earnings surprise of 17.6%.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpThe TJX Companies, Inc. (TJX) : Free Stock Analysis Report
Dillard's, Inc. (DDS) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
