TJX Companies Tops Estimates

The TJX Companies Inc. (TJX: 41.74 0.00 0.00%) reported results for the fourth quarter of 2010 with earnings of 94 cents per share. Earnings were well above the Zacks Consensus Estimate of 60 cents per share and were up a 104% year-over-year.

Net sales for the quarter grew 10.4% year-over-year to $5.9 billion. Consolidated comparable store sales increased 12% for the quarter. The company’s segments both in the U.S. and International reported positive sales and comparable store sales growth.

The company’s segments in the U.S. such as Marmaxx, Home Goods and A.J. Wright reported net sales growth of 13%, 16% and 8% respectively. Internationally, TJX Canada and TJX Europe reported sales increases of 7% and 6%, respectively.

Gross margin for the quarter expanded 411 basis points (bps) to 26.6% versus 22.5% in the comparable prior-year quarter.

The company had cash and cash equivalents of $1.6 billion, long-term debt of $774 million and total shareholders’ equity of $2.9 billion for fiscal 2010.

Concurrent with the earnings release, management provided guidance for the full fiscal and first quarter of 2011. In addition, the company also announced its intention of future investments and distribution of excess cash to shareholders. Earnings for fiscal 2011 are expected to be in the range of $3.06 to $3.20 per share.

Consolidated comparable store sales growth is expected in the range of 1% to 2%. Additionally, the company is continuing its aggressive cost control initiatives, which will reduce expenses by at least $50 million to $75 million in fiscal 2011.

For the first quarter of fiscal 2011, the company expects earnings to be in the range of 60 cents to 65 cents per share. The company expects consolidated comparable store sales growth of 3% to 5%.

Furthermore, for fiscal 2011, the company expects to increase its capital spending by approximately $750 million. The company expects to repurchase $900 million to $1 billion worth of shares.

The company also intends to increase its regular quarterly dividend to $0.15 per share, to be declared in April and payable in June. This increase is subject to the approval of the company’s Board of Directors and would represent a 25% increase.