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TJX Companies Q2 net sales rise 7 percent, raises outlook

By Prachi Singh

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Business

The TJX Companies’ net sales for the second quarter of fiscal 2017 increased 7 percent to 7.9 billion dollars and consolidated comparable store sales increased 4 percent over last year's 6 percent increase. Net income was 562 million dollars and diluted earnings per share were 0.84 dollar, a 5 percent increase over the prior year's 0.80 dollars.

Commenting on the results, Ernie Herrman, CEO and President of The TJX Companies, stated, “It was terrific to see our strong customer traffic and comps continue in the second quarter. With our above-plan second quarter results, we are raising our guidance for full year comp sales to increase 3 percent to 4 percent and earnings per share to be in the range of 3.39 dollars to 3.43 dollars. We continue on the road to becoming a 40 billion dollars-plus company."

Second half net sales up 7 percent

For the first half of fiscal 2017, net sales were 15.4 billion dollars, an 8 percent increase over last year. Consolidated comparable store sales increased 6 percent and net income was 1.1 billion dollars with diluted earnings per share of 1.60 dollars, a 7 percent increase over the prior year's 1.49 dollars.

The movement in foreign currency exchange rates had a two percentage point negative impact on consolidated net sales growth in the second quarter and a 0.03 dollar positive impact on earnings per share, compared with a 0.02 dollar positive impact last year. For the first six months, the movement in foreign currency exchange rates had a two percentage point negative impact on consolidated net sales growth and 0.02 dollar negative impact on earnings per share compared with a 0.01 dollar negative impact last year.

Raises full-year earnings outlook

For the third quarter of fiscal 2017, the company expects diluted earnings per share to be in the range of 0.83 dollar to 0.85 dollar compared to 0.86 dollar last year. This guidance reflects an assumption that wage increases will negatively impact EPS growth by 3 percent. The company also expects the combination of foreign currency and transactional foreign exchange will have an additional 3 percent negative impact on EPS growth. This EPS outlook is based upon estimated consolidated comparable store sales growth of 2 percent to 3 percent.

The company is raising its full year guidance to reflect its strong second quarter results. For the fiscal year, the company now expects diluted earnings per share to be in the range of 3.39 dollars to 3.43 dollars, which would represent a 2 percent to 3 percent increase over 3.33 dollars in fiscal 2016. Consolidated comparable store sales are expected to increase by 3 percent to 4 percent.

During the second quarter, the company increased its store count by 14 stores to a total of 3,675 stores.

Picture:TJX

TJX Companies