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TJX posts flat same-store sales growth in Q3

The TJX Companies’ net sales for the third quarter of fiscal 2018 increased 6 percent to 8.8 billion dollars and consolidated comparable store sales were flat compared to last year's 5 percent increase. Net income was 641 million dollars, while diluted earnings per share were 1 dollar, a 20 percent increase over the prior year's GAAP EPS of 0.83 dollar and a 10 percent increase over the prior year's adjusted EPS of 0.91 dollar.

Commenting on the company’s results, Ernie Herrman, Chief Executive Officer and President of The TJX Companies, said in a media release: "Certainly, the hurricanes had a negative impact during the quarter. Additionally, we believe that warmer temperatures in the US during the quarter dampened demand for apparel at our Marmaxx division. While sales were not as strong as we would have liked, we were pleased that sales trends at Marmaxx improved as the weather turned more seasonable."

Third quarter and nine months result highlights

For the third quarter, the company said, the movement in foreign currency exchange rates had a one percentage point positive impact on consolidated net sales growth. The overall net impact of foreign currency exchange rates had a 0.04 dollar positive impact on earnings per share, compared with a neutral impact last year.

For the third quarter, the company's consolidated pretax profit margin was 11.6 percent, a 0.9 percentage point increase compared with the prior year's 10.7 percent margin and down 0.1 percentage point compared with the prior year's adjusted 11.7 percent margin. Gross profit margin for the quarter was 29.8 percent, up 0.3 percentage points versus the prior year.

During the third quarter, the company increased its store count by 139 stores to a total of 4,052 stores.

For the first nine months, net sales were 24.9 billion dollars, a 5 percent increase over last year's 8 percent increase. Consolidated comparable store sales increased 1 percent over last year's 5 percent increase. Net income was 1.7 billion dollars and diluted EPS were 2.67 dollars, a 10 percent increase over the prior year's GAAP EPS of 2.43 dollars and a 6 percent increase over the prior year's adjusted EPS of 2.51 dollars.

For the first nine months, the movement in foreign currency exchange rates had a neutral impact on consolidated net sales growth. The overall net impact of foreign currency exchange rates had a 0.01 dollar positive impact on earnings per share in the first nine months of Fiscal 2018, compared with a 0.01 negative impact last year.

TJX expects Q4 earnings growth between 21 to 23 percent

For the fourth quarter, the company expects diluted earnings per share to be in the range of 1.25 dollars to 1.27 dollars, a 21 percent to 23 percent increase over the prior year's EPS of 1.03 dollars. Excluding an approximate 0.11 dollar benefit from the extra week in the fourth quarter, the company expects adjusted earnings per share to be in the range of 1.14 to 1.16 dollars, an 11 percent to 13 percent increase over the prior year. This EPS outlook, the company said, is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

For the 53-week fiscal year ending February 3, 2018, the company is maintaining the high end of its earnings per share guidance. The company expects diluted earnings per share in the range of 3.91 dollars to 3.93 dollars, a 13 percent to 14 percent increase over the prior year's EPS of 3.46 dollars. The Company's full-year guidance includes an expected benefit of approximately 0.11 dollar per share from the 53rd week in the company's fiscal 2018 calendar. Excluding this benefit, the company expects adjusted diluted earnings per share to be in the range of 3.80 dollars to 3.82 dollars, an 8 percent increase over the prior year's adjusted EPS of 3.53 dollars. This EPS outlook, the company added, is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

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