Target, TJX Q1 Earnings Top Estimates

(RTTNews) - Discount retailer Target Corp. (TGT) and off-price retailer TJX Cos. Inc. (TJX) reported Wednesday a profit for the first quarter that topped analysts' estimates. Profit declined 5.8 percent at Target, reflecting higher expenses and provision for income taxes, despite a 0.6 percent growth in revenues. Profit at TJX surged from last year, driven by improved gross margins and revenue growth.

Target maintained its guidance for the full-year 2023, while TJX raised its outlook for the full-year 2024.

In pre-market activity on the NYSE, Target shares were up $2.42 or 1.54 percent to trade at $159.33 and TJX shares were also up $2.38 or 3.04 percent to trade at $80.60.

Target reported that its first-quarter net earnings declined to $950 million or $2.05 per share from $1.01 billion or $2.16 per share in the year-ago quarter.

On average, 29 analysts polled by Thomson Reuters expected the company to report earnings of $1.76 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter edged up 0.6 percent to $25.32 billion from $25.17 billion in the same quarter last year, driven by total sales growth of 0.5 percent and a 10.2 percent increase in other revenue. Analysts expected revenues of $25.29 billion for the quarter.

Total comparable sales were flat in the quarter, on top of 3.9 percent growth last year, as comparable store sales growth was 0.7 percent, while comparable digital sales declined 3.4 percent.

Looking ahead to the second quarter, the company projects earnings and adjusted earnings in the range of $1.30 to $1.70 per share on comparable sales centered around a low-single digit decline. The Street is looking for earnings of $1.93 per share for the quarter.

For fiscal 2023, the company continues to project earnings and adjusted earnings in the range of $7.75 to $8.75 per share on comparable sales in a wide range from a low-single digit decline to a low-single digit increase. Analysts expect earnings of $8.44 per share for the year.

Meanwhile, off-price retailer TJX reported that net income for the first quarter surged to $891 million or $0.76 per share from $587 million or $0.49 per share in the prior-year quarter. Analysts expected earnings of $0.71 per share for the quarter.

Net sales for the quarter increased 3 percent to $11.78 billion from $11.41 billion in the same quarter last year, and missed analysts' consensus revenue estimate of $11.82 billion. Overall comp store sales increased 3 percent, driven by an increase in customer traffic.

Comp store sales at Marmaxx increased 5 percent, driven by a strong increase in its apparel and accessories categories, and Marmaxx sales also grew 7 percent to $7.37 billion.

Meanwhile, comp store sales at HomeGoods declined 7 percent and HomeGoods sales also decreased 3 percent to $1.97 billion.

TJX Canada sales decreased 4 percent to $1.04 billion and TJX International (Europe & Australia) sales remained flat with last year at $1.41 billion.

Looking ahead to the second quarter, the company expects earnings in a range of $0.72 to $0.75 per share on overall comparable store sales growth of 2 to 3 percent. Analysts expect earnings of $0.79 per share for the quarter. For fiscal 2024, the company now projects earnings in a range of $3.49 to $3.58 per share and adjusted earnings in range of $3.39 to $3.48 per share on comp sales growth of 2 to 3 percent.

Previously, the company expected earnings in the range of $3.39 to $3.51 per share and adjusted earnings in the range of $3.29 to $3.41 per share on comp sales growth of 2 to 3 percent.

The Street is looking for earnings of $3.55 per share for the year.

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