John Klinger
Executive Vice President and Chief Financial Officer at TJX Companies
Thanks, again, Ernie. Before I start, I want to remind you that fiscal '24 calendar includes a 53rd week. Also, as we stated in our press release this morning, we have offered eligible former TJX associates who have not yet commenced their pension benefit, an opportunity to receive a lump sum payout of their vested pension benefit. We anticipate that the impact of this pension payout offer, primarily a non-cash settlement charge, could negatively impact fiscal '24 EPS by approximately $0.01 to $0.02, but could be higher or lower depending on participation rates and other factors. To be clear, any of the guidance we are providing today does not include the potential impact of this pension payout offer. We expect to exclude the impact of this potential settlement charge from our adjusted pretax profit margin and EPS results in the third quarter.
Now to our full year guidance. We are now planning an overall comp store sales increase of 3% to 4%. As a reminder, our comp guidance excludes our expected sales from the 53rd week. For the full year, we now expect consolidated sales to be in the range of $53.5 billion to $53.8 billion. This guidance includes approximately $800 million of additional revenue expected from the 53rd week. As Ernie said, we're increasing our full year profitability guidance. We're now planning full year pretax profit margin to be in the range of 10.7% to 10.8%. Excluding an expected benefit of approximately 10 basis points from the 53rd week, we now expect adjusted pretax profit margin to be in the range of 10.6% to 10.7%. On a 52-week basis, this would represent an increase of 90 basis points to 100 basis points versus fiscal '23's adjusted pretax profit margin of 9.7%.
Regarding shrink, we continue to be laser-focused on our in-store initiatives while making sure we maintain an enjoyable shopping experience for our customers. At this time, our shrink indicators are leading us to believe that we can continue to plan shrink flat in fiscal '24. As a reminder, we will not know the full effect of our shrink initiatives or the accuracy of our indicators until we do a full annual inventory count at the end of the year. Moving on, we're planning full year adjusted gross margin on a 52-week basis in the range of 29.4% to 29.5%, a 180 basis point to 190 basis point increase versus last year. We expect virtually all of this increase to be driven by a benefit from lower freight costs. We are also planning a benefit from merchandise margin. This guidance also assumes a continuation of headwinds from our supply chain investments and incremental distribution center wages. We are very pleased with the level of freight recapture we are seeing given the significant pressure we saw over the prior three years. Our expected freight benefit this year includes a pull forward of most of the benefit we were expecting in fiscal '25. We remain laser-focused and looking at ways to reduce our freight costs.
Moving on, we're expecting full year SG&A on a 52-week basis to be approximately 19.1%, a 120 basis point increase versus last year. This expected increase is primarily driven by incremental store wage and payroll costs and higher incentive accruals. For modeling purposes, we're currently assuming a full year tax rate of 26%, net interest income on a 52-week basis of about $157 million, and a weighted average share count of approximately 1.16 billion shares. As a result of these assumptions, we're increasing our full year earnings per share guidance to a range of $3.66 to $3.72. Excluding an expected benefit of approximately $0.10 from the 53rd week, we expect adjusted earnings per share to be in the range of $3.56 to $3.62. On a 52-week basis, this would represent an increase of 10% to -- excuse me, 14% to 16% versus fiscal '23's adjusted earnings per share of $3.11. Lastly, we now expect to open about 125 net new stores in fiscal 2024, an increase of approximately 3%. This reflects a shift of some of our planned fall openings into next year.
Moving to the third quarter. We're planning overall comp store sales growth to be up 3% to 4%. Similar to the second quarter, we expect the comp increase to be driven by customer traffic. We're planning for average ticket to be down less than it was -- less than it was in the second quarter, again, due to merchandise mix. We're also expecting an increase in units sold. We expect third quarter consolidated sales to be in the range of $12.9 billion to $13.1 billion, a 6% to 7% increase over the prior year. We're planning third quarter pretax profit margin to be in the range of 11.3% to 11.5%. We're expecting third quarter gross margin in the range of 30.3% to 30.5%, up 120 basis points to 140 basis points versus last year. We're planning a significant benefit from lower freight costs partially offset by headwinds from supply chain investments, inventory cap and our year-over-year shrink accrual.
We're planning third quarter SG&A of approximately 19.3%, up 130 basis points versus last year. This expected increase is driven by incremental store wage and payroll costs and higher incentive accruals. For modeling purposes, we're currently assuming a third quarter tax rate of 25.3%, net interest income of about $40 million and a weighted average share count of approximately 1.15 billion shares. We expect third quarter earnings per share to be in the range of $0.95 to $0.98, up 10% to 14% versus last year's adjusted $0.86. For the fourth quarter, on a 13-week basis, we're planning comp store sales to be up 3% to 4%, adjusted pretax margin in the range of 10.3% to 10.5% and adjusted earnings per share in the range of $1.00 to $1.03. We will provide more detailed guidance for the fourth quarter on our third quarter earnings call.
Before I close, I want to echo Ernie's comments that we continue to see opportunities to further improve profitability over the long-term. As always, the best way for us to drive profitability is with outsized sales. We continue to see opportunities to grow sales and traffic and capture additional market share. Further, we remain laser-focused on being even better on buying and retailing the goods and driving merchandise margin. At the same time, we expect to continue to face headwinds from incremental wage costs and supply chain investments. As usual, we'll give you a detailed annual guidance beyond this year on our February -- on our call in February.
In closing, I want to reiterate that we are very pleased with our -- with the execution of our teams across the Company and are confident in our sales and profitability plans. Further, we have a strong balance sheet and are in an excellent financial position to simultaneously invest in the growth of our business and return significant cash to our shareholders.
Now we are happy to take your questions. As we do every quarter, we're going to ask that you please limit your questions to one per person so we can keep the call on schedule and answer as many questions as we can. Thanks. And now we'll open it up for questions.
