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TJX Profit Falls Partly on Stronger Dollar

TJX said Wednesday that its fiscal fourth-quarter profit fell 17 percent partly because of the stronger dollar, but adjusted results still managed to top analysts' estimates.

Shares of TJX added over 5 percent in morning trading. The stock has traded in a range of $17.80 to $37.52 over the past year.

TJX
Elise Amendola
TJX

The Framingham, Mass.-based operator of stores such as T.J. Maxx, Marshalls and HomeGoods reported net income dropped to $250.7 million, or 58 cents per share, from $301.1 million, or 66 cents per share, a year earlier.

Excluding a reduction of the reserve related to a security breach, adjusted earnings from continuing operations were 55 cents per share, which was above the retailer's forecast for 50 cents to 51 cents per share.

In January, TJX said it would offer a 15 percent discount to its customers in appreciation for their loyalty as it struggled to deal with a massive data breach. The event came two years after the breach exposed tens of millions of payment cards. Eleven people were indicted last year on charges they hacked into the systems of TJX and other retailers to steal the card numbers.

TJX and other retailers have come under pressure lately as consumers cut their discretionary spending as they worry about the economy and their jobs. Many retailers have resorted to job cuts, deep discounts and stricter inventory management as they try to contend with the recession.

Revenue for the period ended Jan. 31 dipped 0.2 percent to $5.38 billion from $5.39 billion, while same-store sales edged down 2 percent. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Analysts polled by Thomson Reuters had predicted profit of 51 cents per share on revenue of $5.4 billion.

TJX said it would not give fiscal 2010 earnings or sales forecasts due to the economic volatility. For the first quarter, however, it expects earnings from continuing operations of 32 cents to 38 cents per share, which includes a 2 cent-per-share impact from the stronger dollar. The forecast assumes a same-store sales decline of 2 percent to 4 percent.

Analysts expect first-quarter profit of 35 cents per share.

For the year, TJX's earnings rose 14 percent to $880.6 million, or $2 per share, from $771.8 million, or $1.66 per share, in the prior year. Profit from continuing operations increased to $914.9 million, or $2.08 per share, from $782.4 million, or $1.68 per share. Adjusted earnings from continuing operations were $2.01 per share.

Annual sales grew to $19 billion, up 4 percent from $18.34 billion. Full-year same-store sales rose 1 percent.

TJX had 2,652 stores for the fiscal year ending Jan. 31.

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