TJX posts lower profit, looks to grow

NEW YORK (Reuters) - TJX Cos Inc (TJX.N) reported lower quarterly profit and trimmed its outlook as even bargain hunters at its off-price stores cut back amid the global financial meltdown.

The company said on Tuesday that its solid financial position put it in a good position for growth as other U,S. retailers struggle and it said it expected to lure more consumers during the holiday season.

"The company's value proposition is resonating well with its customers as traffic was up across most divisions as TJX continues to gain market share in this difficult environment," Stifel Nicolaus analyst Richard Jaffe said in a research note.

TJX, whose retail chains include T.J. Maxx, Marshalls, HomeGoods and A.J. Wright, said net profit fell 5 percent to $235.8 million in the third quarter ended October 25, from $249.5 million a year earlier, excluding the impact of foreign exchange.

Excluding one-time items, primarily the impact of foreign exchange, profit from continuing operations was 54 cents per share, meeting analysts' average forecast, according to Reuters Estimates.

Sales rose 2 percent to $4.8 billion. Consolidated comparable-store sales, an important retail metric, fell 1 percent, but were up 1 percent excluding the impact of foreign exchange.

TJX, which buys excess merchandise at below-wholesale prices and sells it at prices that can be up to 60 percent less than department stores and specialty retailers, has benefited as consumers seek discounts amid uncertain job security.

"I think people are buying less. I think it's the reality of the environment today," TJX Chief Executive Carol Meyrowitz said during a conference call.

She added that she expects consumers to buy for the holiday season, albeit more carefully, and said they may shift some big-ticket buying to TJX.

The company said it is "seeing extremely advantageous real estate deals coming our way" as weaker retail competitors such as Mervyns and Boscov's close stores or go out of business. It added it plans to take "full advantage" of such opportunities.

TJX said it was planning cautiously for the fourth quarter and had cut back discretionary spending across its business units.

For the year, TJX said it expected adjusted earnings per share from continuing operations of $2.11 to $2.15, including an expected benefit of 9 cents per share from an extra week in the fiscal year compared with the previous year. It expects same-store sales to rise 1 percent.

In August, the company had forecast profit of $2.26 to $2.31 per share.

For the fourth quarter, TJX forecast adjusted earnings from continuing operations of 68 cents to 72 cents per share, including the benefit of the extra week. Analysts' average forecast is 72 cents.

It forecast same-store sales would be flat to down 2 percent, excluding the impact of foreign exchange.

The retailer added its expects consolidated same-store sales to fall 3 percent to 6 percent in November, and to be and flat to up 2 percent in both December and January, excluding foreign exchange.

TJX shares were off 10 cents to $23.60 in afternoon trading on the New York Stock Exchange after earlier falling as much as 5 percent.

(Reporting by Sarah Coffey in New York and Karen Jacobs in Atlanta, editing by Maureen Bavdek, John Wallace and Leslie Gevirtz)