TJX Companies net sales up 8 percent in FY18, hikes dividend

The TJX Companies, Inc. said that net sales for the 14-week fourth quarter of fiscal 2018 increased 16 percent to 11 billion dollars, while consolidated comparable store sales on a 13-week basis increased 4 percent, compared to last year’s 3 percent increase. For the 53-week fiscal year, net sales increased 8 percent to 35.9 billion dollars. Consolidated comparable store sales on a 52-week basis increased 2 percent.

Commenting on the results, Ernie Herrman, CEO and President of The TJX Companies said in a statement: “We are very pleased with our strong finish to 2017. Looking ahead, 2018 is off to a solid start. We see abundant opportunities in the marketplace for major brands and high-quality merchandise and are pursuing numerous initiatives to keep driving sales and customer traffic.”

Full year earnings improve 9 percent

Net income for the fourth quarter was 877 million dollars and diluted earnings per share were 1.37 dollars. Adjusted diluted earnings per share were 1.19 dollars, a 16 percent increase over the prior year’s 1.03 dollars. Net income for the year was 2.6 billion dollars and diluted earnings per share were 4.04 dollars versus 3.46 dollars in the prior year. Adjusted diluted earnings per share for the fiscal year were 3.85 dollars, a 9 percent increase over the prior year’s adjusted 3.53 dollars.

For the fourth quarter, the company’s consolidated pretax profit margin was 10.1 percent, a 1.5 percentage point decrease compared with the prior year’s 11.6 percent. On an adjusted basis, the consolidated pretax profit margin was 11.5 percent. Gross profit margin was 28.4 percent, up 0.1 percentage point versus the prior year. Adjusted gross margin was 27.9 percent, down 0.4 percentage points versus the prior year.

For the full year, the Company’s consolidated pretax profit margin was 10.8 percent, a 0.4 percentage point decrease compared with the prior year’s 11.2 percent. On an adjusted basis, consolidated pretax profit margin was 11.2 percent. Gross profit margin was 28.9 percent, down 0.1 percentage point versus the prior year. Excluding a benefit of approximately 0.1 percentage point from the 53rd week in the company’s adjusted gross margin was 28.8 percent, down 0.2 percentage points versus the prior year.

During the fiscal year ended February 3, 2018, the company increased its store count by 258 stores to a total of 4,070 stores.

Full year earnings expected to increase by 17 to 20 percent

For the 52-week fiscal year ending February 2, 2019, the company expects diluted earnings per share to be in the range of 4.73 dollars to 4.83 dollars, a 17 percent to 20 percent increase over the prior year’s 4.04 dollars. The company’s full-year guidance includes an expected benefit of approximately 0.73 dollar to 0.75 dollar per share due to items related to the 2017 Tax Act. Excluding this benefit, the company expects adjusted diluted earnings per share to be in the range of 4 dollars to 4.08 dollars, a 4 percent to 6 percent increase over the prior year’s adjusted 3.85 dollars. This guidance reflects an assumption that wage increases will negatively impact EPS growth by 2 percent and estimated consolidated comparable store sales growth of 1 percent to 2 percent.

For the first quarter, the company expects diluted earnings per share to be in the range of 1 dollar to 1.02 dollars, compared to 0.82 dollar last year. Excluding an expected benefit of approximately 0.15 dollar to 0.16 dollar per share due to the 2017 Tax Act, the company expects adjusted earnings per share to be in the range of 0.85 dollar to 0.87 dollars. This guidance reflects an assumption that wage increases will negatively impact EPS growth by 2 percent and estimated consolidated comparable store sales growth of 1 percent to 2 percent.

The company also announced that it intends to increase the regular quarterly dividend on its common stock to be declared in April 2018 and payable in June 2018 to 0.39 dollar per share, subject to the approval of the company’s board of directors, a 25 percent increase in the current per share dividend and mark the 22nd consecutive year that the Company has raised the dividend.

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