雅虎香港財經 TJX Companies (TJX) Gains on Solid Marketing & Expansion Efforts
The TJX Companies, Inc. TJX is benefiting from its solid store and e-commerce growth efforts. The leading off-price retailer is committed to boosting growth through effective marketing initiatives. Management is focused on offering consumers attractive deals on popular brands and fashions.
Courtesy of these upsides, the company began the fiscal 2025 on a strong note, with the first-quarter top and the bottom line increasing year over year. This performance bolsters management’s confidence in the ability to capture market share across all regions. The company began the fiscal second quarter on a positive note, foreseeing several business opportunities for the remainder of the year. The Zacks Consensus Estimate for fiscal second-quarter earnings has moved up by 1.2% to $4.09 per share in the past 60 days.
All that being said, the company is not immune to a rising cost environment. Let’s delve deeper.
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Solid Performance & View
In first-quarter fiscal 2025, net sales came in at $12,479 million, up 6% (also at constant currency or cc). The company saw higher net sales across Marmaxx (the United States), HomeGoods (the United States), TJX Canada and International (Europe & Australia) segments. TJX Companies witnessed comp sales growth across all segments, completely due to customer transactions, highlighting its solid value proposition.
For the fiscal 2025, management expects consolidated comparable store sales to increase 2-3%. The company envisions fiscal 2025 earnings per share (EPS) in the $4.03-$4.09 band, up from the earlier guided range of $3.94-$4.02. For second-quarter fiscal 2025, TJX Companies expects a consolidated comparable store sales increase of 2-3%. The company envisions fiscal second-quarter EPS in the range of 88-90 cents, suggesting year-over-year growth.
Growth Efforts on Track
TJX Companies is benefiting from its solid store and e-commerce growth efforts. The company has been rapidly expanding its footprint in the United States, Europe, Canada and Australia. During first-quarter fiscal 2025, the company added 18 new stores, ending the quarter with 4,972 stores. Looking ahead, management envisions the potential to expand its current retail banners by adding at least 1,300 more stores across these regions in the foreseeable future.
With an increasing number of consumers resorting to online shopping, TJX Companies has undertaken several initiatives to boost online sales and strengthen its e-commerce business. The company intends to continuously introduce new assortments in stores and online throughout the spring, summer, and beyond.
Robust Marketing Efforts
TJX Companies remains committed to boosting growth through effective marketing initiatives and loyalty programs. Incidentally, the company’s aggressive marketing and advertising campaigns through multiple mediums have been adding growth. It is on track to attract new shoppers of every age, including a large number of Gen Z and millennial shoppers, to fuel growth. Also, TJX Companies’ gift-giving initiatives, unique among off-price retailers and the loyalty card program have been helpful in improving customer engagement.
High Costs, a Concern
Over time, TJX Companies has been dealing with the adverse impacts of the high cost of sales and operating expenses. In first-quarter fiscal 2025, its SG&A costs, as a percent of sales, were 19.2%, up 0.2 percentage points. The rise in such costs can be attributed to incremental store wages and payroll costs. The company's cost of sales increased by 4.4% to $8,739 million in the quarter. Management expects to see incremental store wage and payroll costs during the fiscal 2025.
Wrapping Up
All being said, TJX is poised for steady growth, supported by improved merchandise margins and expense leverage. We believe that The TJX Companies’ off-price model, along with its strategic store locations, impressive brands and fashion products and efficient supply-chain management, are likely to aid its performance.
Shares of the Zacks Rank #3 (Hold) company have increased 9% in the past three months compared with the industry’s 6.3% growth.
Eye These Solid Picks
We have highlighted three better-ranked stocks, namely, Abercrombie & Fitch Co. ANF, The Gap Inc. GPS and DICK'S Sporting Goods DKS.
Abercrombie & Fitch, a specialty retailer of premium, high-quality casual apparel, currently sports a Zacks Rank #1 (Strong Buy). ANF has a trailing four-quarter average earnings surprise of 210.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales and earnings indicates growth of 10.4% and 47.3%, respectively, from the year-ago figures.
Gap, a fashion retailer of apparel and accessories, currently flaunts a Zacks Rank #1. GPS has a trailing four-quarter earnings surprise of 202.7%, on average.
The Zacks Consensus Estimate for Gap’s current financial-year sales and earnings per share suggests a rise of 0.2% and 21.7%, respectively, from the year-earlier levels.
DICK'S Sporting operates as an omni-channel sporting goods retailer. It currently carries a Zacks Rank #2 (Buy). DKS has a trailing four-quarter earnings surprise of 4.7%, on average.
The Zacks Consensus Estimate for DICK’S Sporting current fiscal-year sales and earnings suggests an improvement of 1.8% and 6.6%, respectively, from prior-year numbers.
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The TJX Companies, Inc. (TJX) : Free Stock Analysis Report
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
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DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
