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Reasons Why TJX Companies (TJX) Should be in Your Portfolio
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The TJX Companies (TJX - Free Report) currently boasts robust prospects based on a strong demand environment, strengthening e-commerce capabilities, growth investments and shareholder-friendly policies. Its focus on effective marketing strategies and loyalty programs also bodes well.
This Zacks Rank #2 (Buy) company has a market capitalization of $93.4 billion. In the past three months, it has gained 6.4% against the industry’s decline of 1.3%.
Image Source: Zacks Investment Research
Let’s delve into the factors that have been benefiting this apparel and home fashion retailer for a while now.
Business Strength: The TJX Companies has been benefiting from strength across apparel and accessories categories and an increase in U.S. customer traffic. In first-quarter fiscal 2024, the company’s net sales came in at $11,783 million, reflecting an increase of 3% year over year. The company continues to witness strength across its Marmaxx, Canada and International businesses, driven by robust demand across all markets. For fiscal 2024, it expects to generate consolidated sales of $52.7-$53.2 billion, suggesting 6-7% year-over-year growth.
The company has also been recording solid pretax profit margin, which came in at 10.3% in the fiscal first quarter. The metric reflects an increase from the 7.5% reported in the year-ago quarter. For fiscal 2024, management expects an adjusted pretax profit margin of 10.2-10.4%, higher than the previous projection of 10-10.2%.
Focus on Core Priorities: The TJX Companies remains focused on expanding its footprint in the United States, Europe, Canada and Australia. It plans to add nearly 150 net new stores in fiscal 2024, taking its year-end total to roughly 5,000 stores. It also plans to remodel a significant number of stores and relocate some in the same fiscal year. Recently, the company stated that, in the long run, it anticipates opening more than 1,400 stores in its current locations. TJX’s off-price model, along with its strategic store locations, impressive brands and fashion products and efficient supply-chain management, are likely to boost its performance.
Marketing Strategy: The company remains focused on accelerating growth through effective marketing initiatives and loyalty programs. The company’s aggressive marketing and advertising campaigns through multiple mediums (TV, radio and social media) have been enabling it to gain new customers and expand its presence.
Shareholder-Friendly Policies: TJX believes in rewarding shareholders handsomely through dividend payouts and share repurchases. In the fiscal first quarter, it paid out dividends worth $341 million and repurchased shares worth $500 million. Exiting the fiscal first quarter, it had $3 billion remaining under its existing share repurchase authorization.
Also, in the fiscal first quarter, management raised its quarterly dividend by 13% to 33.25 cents per share. Healthy cash flow is likely to support returning more value to shareholders in the quarters ahead.
Tecnoglass manufactures and sells architectural glass and aluminum products for the residential and commercial construction industries. The Zacks Consensus Estimate for TGLS’ current financial-year sales and earnings per share suggests growth of 18.2% and 25%, respectively, from the corresponding year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 22.7%, on average.
Arcos Dorados operates as a franchisee of McDonald's restaurants. The Zacks Consensus Estimate for ARCO’s current financial-year sales and earnings per share suggests growth of 13.4% and 4.4%, respectively, from the corresponding year-ago reported figures. The company has a trailing four-quarter earnings surprise of 23.5%, on average.
BARK is engaged in providing products, services and content for dogs. The Zacks Consensus Estimate for BARK’s current financial year sales suggests a decline of 2.4%, while earnings are likely to grow 80.7% from the prior-year reported numbers. It has a trailing four-quarter earnings surprise of 10.4%, on average.
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Reasons Why TJX Companies (TJX) Should be in Your Portfolio
The TJX Companies (TJX - Free Report) currently boasts robust prospects based on a strong demand environment, strengthening e-commerce capabilities, growth investments and shareholder-friendly policies. Its focus on effective marketing strategies and loyalty programs also bodes well.
This Zacks Rank #2 (Buy) company has a market capitalization of $93.4 billion. In the past three months, it has gained 6.4% against the industry’s decline of 1.3%.
Image Source: Zacks Investment Research
Let’s delve into the factors that have been benefiting this apparel and home fashion retailer for a while now.
Business Strength: The TJX Companies has been benefiting from strength across apparel and accessories categories and an increase in U.S. customer traffic. In first-quarter fiscal 2024, the company’s net sales came in at $11,783 million, reflecting an increase of 3% year over year. The company continues to witness strength across its Marmaxx, Canada and International businesses, driven by robust demand across all markets. For fiscal 2024, it expects to generate consolidated sales of $52.7-$53.2 billion, suggesting 6-7% year-over-year growth.
The company has also been recording solid pretax profit margin, which came in at 10.3% in the fiscal first quarter. The metric reflects an increase from the 7.5% reported in the year-ago quarter. For fiscal 2024, management expects an adjusted pretax profit margin of 10.2-10.4%, higher than the previous projection of 10-10.2%.
Focus on Core Priorities: The TJX Companies remains focused on expanding its footprint in the United States, Europe, Canada and Australia. It plans to add nearly 150 net new stores in fiscal 2024, taking its year-end total to roughly 5,000 stores. It also plans to remodel a significant number of stores and relocate some in the same fiscal year. Recently, the company stated that, in the long run, it anticipates opening more than 1,400 stores in its current locations. TJX’s off-price model, along with its strategic store locations, impressive brands and fashion products and efficient supply-chain management, are likely to boost its performance.
Marketing Strategy: The company remains focused on accelerating growth through effective marketing initiatives and loyalty programs. The company’s aggressive marketing and advertising campaigns through multiple mediums (TV, radio and social media) have been enabling it to gain new customers and expand its presence.
Shareholder-Friendly Policies: TJX believes in rewarding shareholders handsomely through dividend payouts and share repurchases. In the fiscal first quarter, it paid out dividends worth $341 million and repurchased shares worth $500 million. Exiting the fiscal first quarter, it had $3 billion remaining under its existing share repurchase authorization.
Also, in the fiscal first quarter, management raised its quarterly dividend by 13% to 33.25 cents per share. Healthy cash flow is likely to support returning more value to shareholders in the quarters ahead.
Other Key Picks
Some other top-ranked stocks are Tecnoglass (TGLS - Free Report) , Arcos Dorados Holdings, Inc. (ARCO - Free Report) and BARK, Inc. (BARK - Free Report) . While TGLS sports a Zacks Rank #1 (Strong Buy), ARCO and BARK carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tecnoglass manufactures and sells architectural glass and aluminum products for the residential and commercial construction industries. The Zacks Consensus Estimate for TGLS’ current financial-year sales and earnings per share suggests growth of 18.2% and 25%, respectively, from the corresponding year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 22.7%, on average.
Arcos Dorados operates as a franchisee of McDonald's restaurants. The Zacks Consensus Estimate for ARCO’s current financial-year sales and earnings per share suggests growth of 13.4% and 4.4%, respectively, from the corresponding year-ago reported figures. The company has a trailing four-quarter earnings surprise of 23.5%, on average.
BARK is engaged in providing products, services and content for dogs. The Zacks Consensus Estimate for BARK’s current financial year sales suggests a decline of 2.4%, while earnings are likely to grow 80.7% from the prior-year reported numbers. It has a trailing four-quarter earnings surprise of 10.4%, on average.