by Ian Harvey
November 20, 2019
TJX Companies shares traded higher after the company reported better-than-expected third-quarter EPS and sales results. The company also issued fiscal year 2020 EPS above analyst estimates.
“Stock Options Made Easy” “Earnings Predictions” members are now up 88% potential profits.
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And see what we are considering for future trades on TJX!
TJX reported better-than-expected third-quarter earnings yesterday morning. TJX reported earnings of 68 cents per share, which beat the analyst consensus estimate of 66 cents by 3.03%. This is a 7.94% increase over earnings of 63 cents per share from the same period last year.
The company reported quarterly sales of $10.5 billion, which beat the analyst consensus estimate of $10.32 billion by 1.74%. This is a 6.86% increase over sales of $9.826 billion the same period last year.
The outlook for Q4 EPS of 74-76 cents, below consensus for 77 cents, on comp sales growth of 2%-3%, which caused the market to limit the increase in share price.
TJX stock has gained 16.1% in the past six months compared with the industry’s growth of 16.3%.
Shares closed up 1.83% at 60.64 on the stock market yesterday.
The Recommended Trades on TJX Companies.....
“Specialty retailer TJX Companies Inc. (The) (NYSE:TJX), an off-price apparel and home fashions retailer in the United States and across the world, will report earnings before the market opens. The consensus earnings estimate is $0.66 per share on revenue of $10.28 billion; but the Whisper number is a little higher at $0.68 per share.
The company's guidance was for earnings of $0.63 to $0.65 per share. Consensus estimates are for year-over-year earnings growth of 4.76% with revenue increasing by 4.62%.
For the last reported quarter, it was expected that TJX would post earnings of $0.62 per share when it actually produced earnings of $0.62, delivering no surprise.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
The market has remained very bullish, and retail has been one of the strongest sectors......
.....Of the 21 analysts who cover the stock 17 rate it Strong Buy, 0 rates it Buy, 4 rates it Hold, 0 rate it Sell, and 0 rate it Strong Sell.”
The Option Trade Recommended: Buy the TJX DEC 20 2019 60.000 CALL at approximately $1.75. (astute traders may have been able to buy at $1.41)
Sales were backed by solid comparable store sales (comps), which gained
from robust customer traffic across all segments. TJX Companies' consolidated
comps grew 4% year over year.
Comps rose 2%, 6%, 4% and 1% in TJX Canada, TJX International, Marmaxx and HomeGoods segments, respectively. Markedly, TJX International’s results were backed by solid performance in Europe.
During the reported quarter, TJX Companies returned $778 million to its stockholders in forms of dividend payouts and share buybacks.
The company opened 107 stores in the fiscal third quarter, taking the total count to 4,519.
On Nov 18, TJX Companies concluded an investment for a 25% stake in Familia — major off-price apparel and home fashions retailer in Russia. The investment was worth $225 million.
YOU NEED TO BE IN TO PROFIT!
RBC analyst Kate Fitzsimons said in a research note this month that she liked TJX's prospects more broadly.
"With rising investor concerns about a recession in the coming years, we expect TJX to benefit from both a secular and cyclical perspective," she wrote.
She said she expected TJX to benefit from store remodels, e-commerce investments and digital marketing efforts that target younger consumers. Those investments could help it take more market share in clothing and shoes.
Management raised bottom-line guidance for fiscal 2020. TJX Companies now projects earnings per share of $2.61-$2.63 for the fiscal year, indicating year-over-year growth of 7-8% — including last year’s pension settlement charges) — and 7% — excluding last year’s pension settlement charges.
The company expects consolidated comps growth of 2-3% for the quarter. It
anticipates comps at Marmaxx to grow in the same range. The company expects
earnings of 74-76 cents per share, whereas it reported 68 cents in the year-ago
quarter. The consensus is for 77 cents.
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Where to now for TJX Companies?
Management is encouraged about initiatives and constant efforts to boost customer traffic and sales. The company is particularly encouraged about the opportunities during the holiday season.
Consolidated inventories on a per-store basis (including distribution centers, and excluding e-commerce, inventory in transit and Sierra stores) increased 9% (also on a constant-currency basis) year over year. Given its impressive inventory position, the company is well-poised to take advantage of solid opportunities in the holiday season.
The questions remain......Will TJX Companies continue to gain market share?
Will we recommend another options trade on TJX Companies?
What will “Stock Options Made Easy” advise members to do?
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!