TJX Reports Quarterly Beat; Shares Surge 5.6%

The TJX Companies, Inc. (TJX) shares jumped 5.6% on Wednesday to close at $73 after the company delivered solid second-quarter results for Fiscal 2022, topping both earnings and revenue estimates.

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The beat was driven by robust performances across all segments and regions as more shoppers returned to the stores following the easing of restrictions induced by the COVID-19 pandemic.

Shares of the off-price apparel and home fashions retailer have gained more than 34% over the past year. (See TJX Companies stock charts on TipRanks)

Adjusted earnings of $0.64 per share outperformed analysts’ expectations of $0.55 per share. The company reported an adjusted loss of $0.18 per share in the prior-year period.

Net sales jumped 81% year-over-year to $12.1 billion and exceeded consensus estimates of $10.88 billion. However, the prior-year’s quarterly results were impacted by approximately 31% of its stores being closed due to the COVID-19 outbreak.

Markedly, net sales grew 21% when compared to pre-pandemic levels in Q2FY2020. Further, open-only comp-store sales increased 20% versus Q2 FY20.

TJX CEO Ernie Herrman, commented, “While the environment remains uncertain, particularly with the Delta variant, we are convinced that TJX is in a position of strength. We see numerous opportunities to continue to gain market share and improve our profitability in the medium to longer term.”

He further added, “We are confident in our ability to reach our long-term strategic vision of TJX becoming a $60 billion company.”

Looking forward, management indicated that the quarter-to-date trends are favorable, with overall open-only comp-store sales up in the mid-teens when compared to the third quarter of FY2020.

However, due to the uncertainty related to possible COVID-19-related regulations and likely store closures, the company did not provide guidance for the upcoming third quarter.

Notably, the company announced a $250 million increase in its current share repurchase program for FY22 to $1.5 billion.

Following the impressive Q2 results, Credit Suisse analyst Michael Binetti increased the price target on TJX from $75 to $84 (15.1% upside potential) while reiterating a Buy rating on the stock.

Consensus among analysts is a Strong Buy based on 8 Buys and 1 Hold. The average TJX Companies price target of $82.44 implies 12.9% upside potential to current levels.

TJX scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.