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What’s happening: Shares of TJX Companies gained on Wednesday, after the company reported results for its fourth quarter.
What happened: The parent of TJ Maxx reported stronger-than-expected sales for its fourth quarter on Wednesday.
The company announced a share buyback plan as well as an increase its quarterly dividend in April.
How were the results: The Framingham, Massachusetts-based company reported a low double-digit increase in sales for the fourth quarter.
Why it matters: Several discount retailers like TJX and Ross Stores have benefitted lately from the high-interest rate environment, which has attracted budget-conscious shoppers to stores offering good deals on apparels and cosmetics.
TJX’s consolidated comparable store sales rose 5% in the fourth quarter, topping market estimates of 4.15%, amid an increase in customer transactions. Gross profit margins expanded 370 basis points (bps) year-over-year to 29.8%.
Net sales at the company’s core Marmaxx segment in the US rose 5% amid higher demand for cosmetics and skincare products, while the company’s HomeGoods segment climbed 7% last quarter.
The company announced plans to repurchase $2.0-$2.5 billion of its stock in the fiscal year ending February 1, 2025. TJX also plans to raise the regular quarterly dividend on its common stock to 37.5 cents per share, representing a 13% hike.
Management guided to earnings of 84 cents to 86 cents per share for the first quarter, slightly lower than market estimates of 87 cents per share. They projected earnings of $3.94 to $4.02 per share for fiscal 2025, also lower than market expectations of $4.11 per share.
How shares responded: TJX’s shares rose 0.6% to close at $101.10 on Wednesday, following the release of quarterly results. The stock has gained around 8% year to date.
What to watch: Investors will continue monitoring the US Federal Reserve’s monetary policy and the impact of this on consumer spending.
Context: The GBP/USD forex pair fell on Wednesday, recording its first daily decline versus the greenback in seven trading days.
Details: Investors continued monitoring the monetary policies of major central banks around the world.
Data on the US personal consumption expenditures (PCE) price index, which is the Fed’s preferred gauge to measure inflation, will be released on Thursday. Analysts project the PCE price index to ease to 2.4% in January. The recent report is expected to provide insights into the Fed’s upcoming rate cut plans.
Traders expect the Bank of England to start cutting interest rates from August and speculations suggest around 56 bps of rate cuts this year.
Strength in the US dollar also exerted pressure on the GBP/USD forex pair on Wednesday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained more than 0.1% to 103.98 on Wednesday.
The GBP/USD forex pair fell around 0.2% to 1.2663 on Wednesday. London’s FTSE 100 declined for the third straight day, by 0.76% to close at 7,624.98.
What to watch: Investors await the release of economic data on mortgage lending, consumer credit and money supply M4 from the UK today. Consumer credit in the UK, which rose by £1.197 billion in December, is expected to increase by £1.6 billion in January. Analysts expect M4 money supply in the UK to increase by 0.3% in January, following a 0.5% rise in December.
Investors will also focus on the UK’s Spring Budget, due next week.
Other Markets: US trading indices closed lower on Wednesday, with Dow Jones index, S&P 500 and Nasdaq 100 down by 0.06%, 0.17% and 0.54%, respectively.
European Commission President Ursula von der Leyen said that the EU should think about using profits from Russia’s frozen assets to purchase military supplies for helping Ukraine. The news sent the safe-haven US dollar index slightly lower in forex trading this morning.
Singapore’s bank loans rose to S$794.3 billion in January, from S$793.6 billion in the prior month, lending support to the SGD/USD forex pair.
Vietnam’s trade surplus shrank to $1.1 billion in February, from $2.81 billion in the year-ago period. This being the smallest surplus since January 2023 sent the VND/USD pair lower in forex trading this morning.
Australia’s retail sales rose by 1.1% in January, compared to a 2.1% decline in the previous month, which lent support to the AUD/USD forex pair.
Japan’s retail sales grew by 2.3% year-over-year in January, matching market expectations. The country’s retail trade expanding for the 23rd straight month sent the JPY/USD pair higher in forex trading this morning.
South Africa’s money supply M3, private sector credit, producer price inflation, government budget value and balance of trade, France’s payroll employment, inflation rate, GDP growth rate, and producer price inflation, Germany’s Retail sales, of unemployed persons, unemployment change, jobless rate and consumer price inflation, Türkiye’s foreign exchange reserves, GDP growth rate and MPC meeting summary, Spain’s consumer price index and current account, Italy’s industry sales, UK’s mortgage approvals and net lending to individuals, India’s central government budget value, infrastructure output and GDP growth rate, Brazil’s unemployment rate, Canada’s CFIB business barometer and GDP growth rate, Mexico’s unemployment rate, US personal income, personal spending, initial jobless claims, core PCE price index, Chicago PMI, pending home sales, natural gas stocks change, Kansas Fed composite index and Kansas City Fed’s manufacturing production index, as well as Argentina’s consumer confidence indicator.
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