TJX profit up on rising traffic; shares higher
today Aug 18, 2010
NEW YORK, Aug 17 (Reuters) - TJX Cos Inc (TJX.N) reported higher second-quarter profit on tighter inventories and stronger demand for its cut-price designer brands, and its shares rose 1.3 percent in early trading.
Chief Executive Carol Meyrowitz said customer traffic at the retailer's various chains, which include T.J. Maxx and Marshalls, continued to increase during the quarter.
TJX, which sells apparel and home design brands at lower prices in large part by buying merchandise returned to vendors by department stores, said inventories were down 13 percent companywide at the end of quarter. It said it was "comfortable" with those levels and with its ability to secure merchandise.
The economic slowdown has allowed TJX to woo shoppers away from department stores and regularly report much better sales results than other retailers in the past two years. But there are signs those gains are slowing.
Overall second-quarter sales rose 6.8 percent to $5.07 billion, and sales at stores open at least a year -- or same-store sales -- rose 3 percent.
But TJX said it expects same-store sales in the second half to be flat to down 1 percent. Those results would compare with strong year-earlier gains that are hard to beat.
TJX said net income in the second quarter, ended July 31, was $305 million, or 74 cents per share, up 16.6 percent from $261.6 million, or 61 cents per share, a year earlier.
The company forecast earnings of 86 cents to 91 cents per share for the third quarter, compared with an average Wall Street forecast of 89 cents, according to Thomson Reuters I/B/E/S.
TJX expects same-store sales to flat to up 2 percent during the third quarter.
For the full fiscal year, it raised its earnings forecast and now expects $3.27 to $3.37 per share on an adjusted basis; analysts expect $3.37. The company's previous forecast was $3.24 to $3.33.
TJX said it spent $590 million to buy back shares in the first half and still expects to spend $900 million to $1 billion on repurchases for the full year.
The company's shares were up 54 cents to $41.91 in morning trading on the New York Stock Exchange.
(Reporting by Phil Wahba; Editing by Derek Caney and John Wallace)
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