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Investing.com -- The TJX Companies (NYSE:TJX), Inc. reported second-quarter earnings that exceeded analyst expectations, prompting the off-price retailer to raise its full-year profit outlook. Shares surged 3.8% following the announcement.
The parent company of T.J. Maxx, Marshalls, and HomeGoods posted adjusted earnings per share of $1.10 for the second quarter, significantly above the analyst estimate of $1.01. Revenue reached $14.4 billion, surpassing the consensus expectation of $14.14 billion and representing a 7% increase from the same period last year. Comparable store sales grew 4% across the company’s portfolio of stores.
TJX’s pretax profit margin came in at 11.4%, well above the company’s plan and 0.5 percentage points higher than last year’s second quarter. The company attributed the strong margin performance to favorable hedges, operational efficiencies, and the timing of certain expenses.
"I am extremely pleased with our second quarter performance. Sales, pretax profit margin, and earnings per share were all above our plan," said Ernie Herrman, Chief Executive Officer and President of TJX. "Consumers were drawn to our excellent values and brands. Customer transactions were up at every division as we saw strong demand at each of our U.S. and international businesses."
Looking ahead, TJX raised its full-year earnings guidance to $4.52-$4.57 per share, above the analyst consensus of $4.51. However, the company’s third-quarter EPS guidance of $1.17-$1.19 fell short of the $1.22 analysts were expecting. TJX maintained its full-year comparable sales growth forecast of 3%.
The company’s inventory position increased 10% on a per-store basis compared to last year, which management described as reflecting "excellent buying opportunities" in the marketplace. During the quarter, TJX returned $1 billion to shareholders through $515 million in share repurchases and $474 million in dividends.
All of TJX’s divisions reported positive comparable sales growth, with TJX Canada leading at 9%, followed by TJX International and HomeGoods at 5% each, and Marmaxx at 3%.