In This Article:
(Rewrites throughout; updates shares in paragraph 2)
By Granth Vanaik and Juby Babu
Nov 15 (Reuters) - TJX Cos on Wednesday forecast current-quarter profit below Wall Street expectations, signaling that spiraling costs were weighing on the off-price retailer's margins even as it saw steady demand from bargain-hungry customers.
Shares of the company, which are up about 16% this year, were down about 3% before the bell.
TJX, like several other U.S. retailers, has been struggling with higher costs linked to supply chain and wages, even as it has seen freight-related expenses come down from its peak.
The company's downbeat forecast is in contrast to industry peer Target which said on Wednesday that it sees fourth-quarter profit above analysts' estimates, helped by easing supply-chain costs and a tighter control on inventory.
"TJX is dealing with higher labor costs," said Insider Intelligence analyst Rachel Wolff, adding that its fourth-quarter outlook is softer than analysts had expected.
In the third quarter ended Oct. 28, TJX saw selling, general and administrative expenses go up by 18%.
TJX now expects fourth-quarter adjusted earnings between 97 cents and $1 per share, down from its previous forecast of $1 to $1.03. Analysts estimate a profit of $1.13, according to LSEG data.
However, the company raised its full-year sales and profit forecasts as it benefited from customers shifting to cheaper alternatives amid a higher cost-of-living crisis.
"Customer traffic was up across all divisions," said CEO Ernie Herrman, adding that the fourth quarter was "off to a strong start."
The company now expects fiscal 2024 comparable store sales between 4% and 5%, up from its earlier forecast of 3% to 4%.
It expects fiscal 2024 adjusted earnings between $3.61 and $3.64 per share, up from its previous outlook of $3.56 to $3.62 per share. Analysts expect a profit of $3.73 per share.
The company posted a quarterly revenue of $13.27 billion compared with analyst estimates of $13.09 billion. (Reporting by Juby Babu and Granth Vanaik in Bengaluru; Editing by Shailesh Kuber)