The TJX Companies demonstrates exceptional resilience through its unique “treasure hunt” shopping model, consistently delivering financial growth and shareholder returns across multiple international markets. With strategic expansions, a proven track record of payout increases, and an experienced merchandise team, the company offers investors a compelling opportunity in a challenging retail landscape.
Management’s commitment to international growth and ability to navigate economic uncertainties make this an attractive investment opportunity for the long term.
THE TJX COMPANIES (New York symbol TJX; tjx.com) is a leading off-price retailer of clothing, accessories and home fashions. Off-price retailers purchase merchandise at below-wholesale prices and charge less than retail prices.
Through their shares, investors tap a network of stores. In the U.S., TJX operates 1,331 T.J. Maxx locations, 1,219 Marshalls, 941 HomeGoods, 109 Sierra Trading Post outlets and 67 HomeSense locations. In Canada, it has 307 Winners outlets, 160 HomeSense locations and 109 Marshalls stores. TJX also operates in Europe, with 653 TK Maxx and 77 Homesense stores; and in Australia, with 84 TK Maxx outlets.
TJX is expanding its global footprint through a joint venture in Mexico. Mexican retailer Grupo Axo will own 51% of the joint venture, and TJX will own 49%.
The collaboration will incorporate Axo’s existing off-price, brick-and-mortar retail operations in Mexico, encompassing more than 200 stores under its Promoda, Reduced, and Urban Store brands.
The new joint venture should be a good fit for TJX. It draws on TJX’s extensive experience as a global off-price retailer, plus Axo’s established network of off-price stores and the company’s three decades of operational expertise in Mexico.
Growth Stocks: TJX’s ‘Treasure hunt’ model continues to outperform despite challenges
Meanwhile, overall revenue in the quarter ended November 2, 2024, rose 6.0%, to $14.06 billion from $13.27 billion a year earlier. Comparable same-store sales increased 3.0%.
TJX reported earnings per share of $1.14 in the quarter, up 10.7% from $1.03.
The company raised its quarterly dividend by 12.8% with the June 2024 payment, to $0.375 from $0.3325 a share. The shares yield 1.2%.
The increase was the company’s 27th over the last 28 years.
Going forward, apart from inflation hurting consumer confidence, TJX, like most retailers, faces challenges from labour shortages and rising freight costs. Meantime, rather than shifting online in a major way, the company will stick with its successful formula. To find attractive deals for its customers, it depends heavily on the skills of its merchandise buyers, many of whom have been with the company for decades. TJX stores then quickly turn over limited quantities of products—all sold at bargain prices.
The result is an ongoing treasure hunt that spurs regular store visits and encourages consumers to buy immediately rather than risk someone else snatching up a deal. Once the retail landscape fully regains its pre-COVID footing, TJX’s winning formula will continue to be a big plus for both its customers and its investors.
Recommendation in Power Growth Investor: The TJX Companies is a buy.
