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What Impacted TJX Companies’ Fiscal 3Q18 Earnings?


Nov. 17 2017, Updated 3:25 p.m. ET

Earnings in line with expectations

TJX Companies (TJX) announced its results for fiscal 3Q18, which ended on October 28, 2017, on November 14. Excluding one-time items, the leading off-price retailer delivered adjusted EPS (earnings per share) of $1.00 in fiscal 3Q18, in line with the consensus analyst estimate. TJX Companies’ fiscal 3Q18 adjusted EPS met the upper limit of its own guidance range of $0.98–$1.00.

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Year-over-year growth

TJX Companies’ adjusted EPS rose 9.9% on a year-over-year basis in fiscal 3Q18. TJX Companies’ higher earnings were driven by increased sales and favorable currency movements, partially offset by the impact of hurricanes.

Lost sales and other expenses associated with the hurricanes adversely impacted the company’s fiscal 3Q18 EPS by about $0.03. Also, higher wages negatively impacted EPS growth by about 1.0%. Favorable currency movements benefited EPS by $0.04. Also, the change in accounting rules for share-based compensation positively impacted EPS growth by 2.0%.

Rival off-price retailer Ross Stores (ROST) delivered a 16.1% rise in its adjusted EPS to $0.72 in fiscal 3Q17, which ended on October 28, 2017. This strong growth in earnings was driven by higher sales and improved margins.

Updated guidance

TJX Companies now expects its fiscal 2018 adjusted EPS to come in the $3.80–$3.82 range. The company previously expected adjusted EPS in the $3.78–$3.82 range. The company’s adjusted EPS in fiscal 2017 was $3.53.

The company’s guidance assumes higher wages will negatively impact fiscal 2018 EPS growth by 2.0%. Currency fluctuations are expected to positively impact EPS growth by 1.0%. Also, the change in accounting rules for share-based compensation is expected to positively impact fiscal 2018 EPS growth by 1.0%.

Let us look at the company’s sales in the next part of this series.


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