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TJX Looking Pretty

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Retailer boosts numbers on solid second quarter.

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TJX Companies (TJX) released second-quarter results on Tuesday, reporting earnings of $200.2 million or $0.45 per share ($0.47 per share once a small charge has been excluded). That's well north of the approximately $59 million or $0.13 per share it earned in the comparable period last year, and about a penny ahead of Wall Street estimates. Revenues, at $4.6 billion, were roughly in line with expectations.

The Massachusetts-based retailer, which is perhaps best known for its T.J. Maxx, Bob's Stores and Marshall 's locations, now expects to earn $2.26 to $2.31 a share for the year. That's a nice little bump up from the $2.20 to $2.25 a share guidance it provided in conjunction with its first-quarter results in May.

Comparable-store sales in the period were up a respectable 4% - a particularly strong showing, given the fact that competitors Kohl's (KSS) and Target (TGT) posted comp-store declines of 6.7% and 0.7%, respectively, in their first quarters.

TJX's gross margins were also solid, coming in at 24.4% - about a 40-basis point jump from the same period last year. This suggests that the company is buying wisely - and avoiding getting killed by markdowns.

I'm also encouraged by management's decision to up its earnings number with only two quarters of the year under its belt. Given that sign of confidence, I think we could see full-year consensus numbers rise by a penny or two on this news, and the shares could head higher in the weeks and months ahead. (At the time of this writing, analysts were at $2.28 a share.)

The TJX Companies closed at $36.17, down 83 cents or 2.24%.

No positions in stocks mentioned.

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