T.J.
Maxx Parent Company Raises Profit Outlook as Cost Pressures Ease
The parent company of T.J.
Maxx, TJX, has raised its profit outlook as cost pressures begin to ease.
Although the company missed first-quarter revenue estimates and saw a drop in sales for its HomeGoods brand, it experienced an increase in gross margin due to a decrease in expenses related to raw materials, labor, and freight.
Shares of TJX were up about 3% in morning trade as the company also beat expectations for first-quarter profit and maintained its annual sales forecast.
However, analysts from UBS believe that the sales miss may limit the stock from moving much higher.
In the first quarter, TJX’s HomeGoods brand saw a 7% drop in U.S.
comparable-store sales.
The company had previously warned that business would slow down for two more quarters.
However, despite the decline in sales, TJX’s gross margin increased by 1 percentage point to 28.9% as it started to see expenses ease after months of grappling with sky-high costs.
The net sales for the quarter ended April 29 rose 3.3% to $11.78 billion, slightly missing the estimated $11.82 billion.
Looking forward, TJX now expects its 2024 adjusted profit per share to be between $3.39 and $3.48, compared to the previous range of $3.29 to $3.41.
However, this falls short of the estimate of $3.55, according to Refinitiv IBES..
