TJ Maxx shares rise following Q2 results

Shares of TJX Companies, Inc. (NYSE: TJX) rose 1.7 percent to $70.75 in early Tuesday trading after the retailer reported second quarter earnings that beat Wall Street estimates.

The company’s net income was $552.6 million, or 85 cents per share, compared with $562.2 million, 84 cents per share, for the same period last year. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of 84 cents per share.

TJX reported revenue of $8.4 billion for the period ended July 29, higher than the $8.3 billion analysts surveyed at Factset expected. Last year, the company reported $7.88 billion in second-quarter revenue.

The company said it expects full-year EPS in the range of $3.89 to $3.93, and adjusted EPS in the range of $3.78 to $3.82, a 7% to 8% increase from last year.. The FactSet consensus is $3.89. For the third quarter, TJX anticipates earnings of 98 cents to $1 a share.

"These [strong numbers] more than offset the lower-end forward guidance increase management offered, as well as the weighing pressures from other retailers," noted Jim Cramer in a morning note for his Action Alerts PLUS charitable trust portfolio members. Cramer pointed out that Macy's Inc. (NYSE: M), J.C. Penney Company Inc. (NYSE: JCP) and other retailers have been offloading merchandise to TJX. While it's pain for some retailers, it's a gain for TJX as it's getting such good merchandise, he added.

The company's same-store sales climbed 3% in the quarter, compared to 4% in the year-ago period. Gross margins declined 0.9% to 28.5%.

"Within the quarter, TJX's merchandise margins came in on the higher side again, validating our thesis that the company's off-price model can thrive in this retail environment," wrote Cramer.

TJX shares have decreased slightly more than 7 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed 10 percent. The stock has dropped 16 percent in the last 12 months.

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