TJX stock drops as profit tops expectations but sales fall more than forecast as inflation takes a bite
Shares of TJX Companies fell 1.4% in premarket trading Wednesday, after the off-price apparel and home fashions retailer reported fiscal second-quarter profit that rose above expectations, while same-store sales fell more than forecast as "historically high inflation" hurt consumer spending, particularly for home goods. Net income for the quarter to July 30 rose to $809.3 million, or 69 cents a share, from $785.7 million, or 64 cents a share, in the year-ago period. That topped the FactSet consensus for earnings per share of 67 cents. Sales declined 1.9% to $11.84 billion, below the FactSet consensus of $12.04 billion. Same-store sales fell 2%, missing the FactSet consensus of a 0.5% decline, as same-store sales at the company's Marmaxx and HomeGoods retail chains both fell more than forecast. Gross profit margin decreased by 1.8 percentage points to 27.6%. "[U].S. comp sales for the second quarter came in lighter than we expected as we believe historically high inflation impacted consumer discretionary spending," said Chief Executive Ernie Herrman, with more sales softness seen in home categories. The stock has soared 18.6% over the past three months through Tuesday, while the S&P 500 has gained 5.3%.
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