Why TJX Companies' Stock Is Sinking Today

The stock of TJX Companies (NYSE: TJX) is moving lower Wednesday on the heels of the company's first-quarter report. The share price was down 2.5% as of 1 p.m. ET today. The stock had been down as much as 3.7% earlier in the day.

TJX reported first-quarter results before the market opened this morning, posting sales and earnings that topped Wall Street's expectations. On the other hand, the company's guidance for business performance and headwinds are prompting sell-offs for the stock.

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TJX stock heads lower despite sales and earnings beats in Q1

TJX posted earnings per share (EPS) of $0.92 on revenue of $13.11 billion. The average Wall Street analyst estimate had called for the company to report per-share earnings of $0.91 on sales of $13.03 billion.

Revenue was up 5% year over year in the period, but EPS declined roughly 1% compared to last year's quarter. Same-store sales (comps) increased 3% year over year in the period, and management said the company was seeing solid momentum in the second quarter, but its guidance hasn't been enough to stop a valuation pullback.

What's next for TJX?

For the second quarter, TJX is guiding for comps to be up between 2% and 3%. The business' pretax net income margin is projected to be between 10.4% and 10.5%, down from a margin of 10.9% in last year's quarter.

Similarly, full-year comps are expected to be up between 2% and 3%. The business' pretax profit margin is project to be between 11.3% and 11.4%, down from last year's margin of 11.5%; EPS is projected to be between $4.34 and $4.43.

While the company's earnings guidance range suggests annual growth between 2% and 4%, it fell short of the average analyst's call for per-share earnings of $4.49 on the year. TJX's first-quarter results and guidance weren't bad, but the company's report suggests that the business could face some sales and margin headwinds tied to macroeconomic factors.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends TJX Companies. The Motley Fool has a disclosure policy.