The TJX Companies, Inc. (TJX - Analyst Report) reported earnings of 93 cents per share in the fourth quarter of fiscal 2015, beating the Zacks Consensus Estimate of 90 cents by 3.33%. Earnings rose 15% from the year-ago results backed by higher consumer traffic, improved margins and solid comparable-store sales growth in consecutive months.

Quarterly Details

Net sales increased 6% year over year to $8.3 billion backed by higher comps but came in line with the Zacks Consensus Estimate.

TJX Companies' consolidated comparable-store sales increased 4%, better than the 3% rise in the year-ago quarter. The improvement was backed by 3%, 11%, 7% and 2% year-over-year increase in same-store sales at Marmaxx, Home Goods, TJX Canada and TJX Europe, respectively.

TJX Companies' pre-tax profit margin inflated 0.4 percentage points (pp) from the prior-year quarter to 12.4% of sales. Gross margin also inflated 0.6 pp year over year to 28.2% mainly driven by higher merchandise margins as well as comps.

Selling, general and administrative costs, as a percentage of sales, went up 0.1 pp to 15.7% due to increased promotions.

Fiscal 2015 Results

Earnings of $3.16 per share in fiscal 2015 beat the Zacks Consensus Estimate of $3.13 per share by 9.5%. Earnings also improved 12% from the year-ago results backed by higher consumer traffic, better margins and solid comparable-store sales growth in consecutive months.       

Net sales increased 6% year over year to $29.1 billion backed by higher comps. Net sales were in line with the Zacks Consensus Estimate.

Share Repurchase and Dividend

During the fourth quarter of 2015, the leading off price retailer spent a total of $407 million to repurchase 6.2 million common shares.

The company also announced its plan to repurchase approximately $1.8 to $1.9 billion of common stocks during fiscal 2016. It also announced plans to hike dividend by 20% to be declared in Mar 2015 and payable in June.

Outlook

TJX Companies issued fiscal 2016 guidance. It expects earnings in the range of $3.17 to $3.25 versus $3.15 in the previous year. Comparable-store sales are expected to grow in the range of 1–2%.

For the first quarter of fiscal 2016, the company expects comparable-store sales growth of 2–3%. The company issued earnings per share outlook in the range of 64 to 66 cents, up 0% to 3% from the year-ago results.

Key Picks in the Sector

TJX Companies currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the retail sector include Burlington Stores Inc. (BURL - Snapshot Report),Fred’s Inc. (FRED - Analyst Report) and Ross Stores Inc. (ROST - Analyst Report). All these stocks have a Zacks Rank #2 (Buy).

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