TJX Companies (TJX) reported better-than-expected fiscal year 2024 third-quarter results on Wednesday, while again raising its outlook for the full fiscal year — prompting us to upgrade the stock to a buy-equivalent rating. Total revenue for the three months ended October 28 advanced 9% year-over-year, to $13.3 billion, exceeding analysts’ forecasts of $13.15 billion, according to estimates compiled by LSEG. Adjusted earnings-per-share (EPS) climbed 13% on an annual basis, to $1.03, outpacing analysts’ estimates of 99 cents per share, LSEG data showed. Bottom line TJX Companies — which operates off-price retail stores like T.J. Maxx, Marshalls and HomeGoods — reported a strong set of results, with total revenue, earnings, profit margins and same-store sales all coming in ahead of expectations. Same-store sales were positive in every segment, with results in the Marmaxx and HomeGoods divisions “entirely driven by customer traffic,” according to the company. Gross-margin performance was also 200 basis points better than the year ago period, which management attributed to a “higher merchandise margin due to the significant benefit from lower freight costs.” Still, the benefit of lower freight costs was partially offset by supply chain investments and shrink, or theft. Management also returned $1 billion to shareholders during the quarter, via $650 million worth of stock repurchases and another $380 million in dividends. Management was forced to shave the company’s fourth-quarter guidance range to reflect a 3 cent-per-share expense that was pushed out from the third quarter to the fourth. However, the strong third-quarter performance — which outpaced the high-end of guidance by 5 cents per share — still allowed TJX to raise its full-year outlook. The company also reiterated its same-store sales forecast for the fourth quarter, while increasing its same-store sales forecast for the full year. As a result, we view selling pressure Wednesday due to investors…
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