(Reuters) -TJX Cos Inc forecast annual profit below Wall Street expectations on Wednesday, as the off-price retailer’s margins face pressures from persisting supply chain costs and surging inflation.
The company, which has been battling higher freight and labor costs due to global supply chain disruptions, the Russia-Ukraine war and inflation, had selectively increased prices from fiscal 2022 on some products.
However, TJX has continued to draw in shoppers as it managed to keep its prices lower than other retailers or department stores.
Shares of the HomeGoods owner rose marginally after the company said it would repurchase $2.0 billion to $2.5 billion of TJX’s stock in fiscal 2024.
The T.J. Maxx parent also posted better-than-expected fourth-quarter revenue, benefiting from bargain-hungry but brand-conscious customers turning to off-price stores during the holiday season.
Analysts see TJX as one of the more well-positioned off-price retailers which is expected to gain market share in a weakening consumer discretionary environment.
The discount store operator now expects full-year adjusted profit per share between $3.29 and $3.41, compared with analysts’ estimates of $3.57, according to IBES data from Refinitiv.
The company’s net sales rose 5% to $14.52 billion in the fourth quarter, beating analysts’ estimates of $14.07 billion while profit per share came in line with expectations of 89 cents.
(Reporting by Aatrayee Chatterjee and Ananya Mariam Rajesh in Bengaluru; Editing by Maju Samuel)
