TJX Q1 profit up, but stock falls 4 percent

By Alexandria Sage

LOS ANGELES (Reuters) - TJX Cos Inc (TJX.N: Quote, Profile, Research, Stock Buzz) posted higher quarterly profit on Tuesday, but its stock, which had rallied a day earlier, fell more than 4 percent due to a second-quarter forecast range whose high end met, but did not exceed, Wall Street estimates.

Nevertheless, the off-price retailer, which should benefit from warmer weather in the second quarter, is likely to beat its own outlook, said one analyst.

"I think the stock is unnecessarily down and I think it represents a buying opportunity," said CL King analyst Mark Montagna. "I think they're being conservative and I think they always try to outperform their guidance," he added.

The operator of chains including T.J. Maxx, Marshalls, HomeGoods and A.J. Wright said net profit was $193.8 million, or 43 cents per share, in the fiscal first quarter that ended April 26, compared with $162.1 million, or 34 cents per share, a year earlier.

Excluding a tax benefit, earnings were 41 cents a share, matching the average analyst forecast compiled by Reuters Estimates.

The retailer also said operating margins fell to 6.6 percent, from 6.9 percent a year earlier, excluding one-time charges a year ago, and was slightly below the company's expectations.

The company, which buys excess merchandise in bulk at below-wholesale prices, said selling, general and administrative expenses were flat.

Sales rose 6 percent to $4.36 billion, while sales at stores open at least a year, or comparable-store sales, rose 3 percent.