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Net sales for the second quarter at The TJX Cos. Inc. increased 8 percent to $5.5 billion, the company said Tuesday. Comparable-store sales for the quarter, ended July 30, grew 4 percent. Net income was $348 million and diluted earnings per share were 90 cents, compared with 74 cents per share last year.
The off-price retailer said last year’s second quarter included a positive impact from a nonoperating item. Without the item, diluted EPS for the second quarter increased 23 percent over the prior year’s 73 cents adjusted diluted EPS, exceeding the high end of TJX’s already raised expectations.
Current-year results also include a 3 cent per share positive impact related to foreign currency exchange.
For the first half of fiscal 2012, net sales were $10.7 billion, a 6 percent increase over last year, and consolidated comp-store sales rose 3 percent over the prior year. Net income was $614 million and diluted EPS was $1.57, compared with $1.54 in the same 2010 period. The company said a number of items impacted the comparability of EPS for both periods. Excluding these items, adjusted diluted EPS for the first six months of fiscal 2012 were $1.68, a 10 percent increase over the adjusted $1.53 the previous year.
“Customer traffic continues to be up [with] large increases in the last two years,” said Carol Meyrowitz, chief executive officer of TJX, adding that the traffic speaks to “the great flexibility of our business model, which has enabled us to succeed year after year, through both strong and weak economic environments.”
Meyrowitz said TJX will be significantly increasing its marketing penetration in the second half of the year and leveraging its marketing spend.
Gross profit margin for the second quarter was 27.3 percent, up 0.7 percent over last year. Selling, general and administrative costs as a percent of sales were 16.9 percent in the second quarter, a 0.1 percent increase over 2010, reflecting a greater advertising investment.
The company raised its outlook for full-year fiscal 2012 for EPS, on a GAAP basis, to be in the range of $3.78 to $3.86, compared with $3.30 in EPS from continuing operations in fiscal 2011. Excluding costs related to the shuttering of the A.J. Wright chain in fiscal 2012, adjusted diluted EPS for the full year is expected to be in the range of $3.89 to $3.97, an increase of 11 to 14 percent over last year.
For the third quarter, TJX expects diluted EPS on a GAAP basis in the range of $1.03 to $1.07, a 12 to 16 percent increase over 92 cents per share last year. The outlook is based on estimated consolidated comp-store sales growth of 2 to 3 percent.