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TJX Companies on Track With Revenue Expansion Initiatives
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Competition in the retail industry has always remained intense as more companies keep entering the sector and expand their stores, online presence and continuously innovate to augment their offerings.
However, off-price retailers are seen to be operating steadily amid such pressures. Such retailers are attracting more consumers owing to their low price business model compared with traditional department stores. One such off-price retailer that has been gaining from improved store traffic is The TJX Companies (TJX - Free Report) . We note that the company has maintained a solid earnings trend and has outpaced estimates in the last 11 quarters.
Let’s now look into some of the factors that have been aiding the company’s performance and few of the challenges it has been dealing with.
Comps Growth and Store Expansion
Higher store traffic has been benefiting TJX Companies’ comps growth for the last 33 quarters. In order to improve the growth momentum, the company has been adhering to aggressive store openings and brand enhancing initiatives.
With almost 3,800 stores across nine countries, TJX Companies is focused on increasing store count to 5,600 over the long term. It plans to open approximately 260 stores in fiscal 2018. In July, the company announced plans to launch a new chain of stores called Homesense, which provides furniture, lighting and art. The company has opened its first Homesense store recently, with a few more stores slated to open during the fall. Similar store expansion strategies are seen to be followed by other major discount retailers such as Burlington Stores, Inc. (BURL - Free Report) and Ross Stores, Inc. (ROST - Free Report) .
Other Initiatives to Boost Sales
The company’s aggressive marketing and advertising campaigns through multiple mediums have also been boosting traffic at its stores for the past few quarters. Its gift-giving initiatives, which is unique among off-price retailers and loyalty card program (which offers consumers a non-credit card choice and soft benefits such as early shopping hours) also help to improve customer engagement.
E-commerce Expansion
Although discount retailers have been comparatively slow on adapting themselves with e-commerce growth, they are now gradually focusing on increasing their online presence and thereby capitalize on omni-channel capabilities. Moreover, the online shopping platform has been widening consistently with growing consumer preference and technological advancements, thanks to Amazon.com Inc (AMZN - Free Report) .
TJX Companies has also not kept itself aloof from this phenomenon and has been undertaking several initiatives to boost online sales. The company’s e-commerce business, Sierra Trading Post, is working towards growing its business. Moreover, TJX’s official website tjmaxx.com, accessible from tablets and smartphones, appeals to the young generation — the company’s main target consumers. TJX plans to add more categories to the online shopping site and invest categorically to differentiate it from its brick-and-mortar stores.
Rising Costs Remain a Concern
Being an off-price retailer, TJX Companies cannot increase the price of its products despite rising product costs. Further, the company expects incremental investments for its stores and online channel to lead to additional supply chain costs and employee payroll. This would subsequently pressurize margins in the coming quarters.
Nevertheless, we remain confident regarding the company’s business expansion initiatives and expect them to yield positive results, thereby offsetting ongoing incremental cost related challenges.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
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TJX Companies on Track With Revenue Expansion Initiatives
Competition in the retail industry has always remained intense as more companies keep entering the sector and expand their stores, online presence and continuously innovate to augment their offerings.
However, off-price retailers are seen to be operating steadily amid such pressures. Such retailers are attracting more consumers owing to their low price business model compared with traditional department stores. One such off-price retailer that has been gaining from improved store traffic is The TJX Companies (TJX - Free Report) . We note that the company has maintained a solid earnings trend and has outpaced estimates in the last 11 quarters.
Let’s now look into some of the factors that have been aiding the company’s performance and few of the challenges it has been dealing with.
Comps Growth and Store Expansion
Higher store traffic has been benefiting TJX Companies’ comps growth for the last 33 quarters. In order to improve the growth momentum, the company has been adhering to aggressive store openings and brand enhancing initiatives.
With almost 3,800 stores across nine countries, TJX Companies is focused on increasing store count to 5,600 over the long term. It plans to open approximately 260 stores in fiscal 2018. In July, the company announced plans to launch a new chain of stores called Homesense, which provides furniture, lighting and art. The company has opened its first Homesense store recently, with a few more stores slated to open during the fall. Similar store expansion strategies are seen to be followed by other major discount retailers such as Burlington Stores, Inc. (BURL - Free Report) and Ross Stores, Inc. (ROST - Free Report) .
Other Initiatives to Boost Sales
The company’s aggressive marketing and advertising campaigns through multiple mediums have also been boosting traffic at its stores for the past few quarters. Its gift-giving initiatives, which is unique among off-price retailers and loyalty card program (which offers consumers a non-credit card choice and soft benefits such as early shopping hours) also help to improve customer engagement.
E-commerce Expansion
Although discount retailers have been comparatively slow on adapting themselves with e-commerce growth, they are now gradually focusing on increasing their online presence and thereby capitalize on omni-channel capabilities. Moreover, the online shopping platform has been widening consistently with growing consumer preference and technological advancements, thanks to Amazon.com Inc (AMZN - Free Report) .
TJX Companies has also not kept itself aloof from this phenomenon and has been undertaking several initiatives to boost online sales. The company’s e-commerce business, Sierra Trading Post, is working towards growing its business. Moreover, TJX’s official website tjmaxx.com, accessible from tablets and smartphones, appeals to the young generation — the company’s main target consumers. TJX plans to add more categories to the online shopping site and invest categorically to differentiate it from its brick-and-mortar stores.
Rising Costs Remain a Concern
Being an off-price retailer, TJX Companies cannot increase the price of its products despite rising product costs. Further, the company expects incremental investments for its stores and online channel to lead to additional supply chain costs and employee payroll. This would subsequently pressurize margins in the coming quarters.
Nevertheless, we remain confident regarding the company’s business expansion initiatives and expect them to yield positive results, thereby offsetting ongoing incremental cost related challenges.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>