TJX Companies (TJX) Up 32.9% in the Past Year: What's Driving it?
The TJX Companies, Inc.’s TJX performance has been impressive over the past year, evident from the 32.9% increase in its share price. The company’s strength across its businesses, solid store and e-commerce growth efforts, effective marketing strategy and shareholder-friendly policies seem to have boosted sentiments for the stock.
The Framingham, MA-based company belongs to the Zacks Retail - Discount Stores industry, which comes under the ambit of the Zacks Retail-Wholesale sector.
TJX has a $102.8 billion market capitalization and currently carries a Zacks Rank #2 (Buy).
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Over the past year, the company’s shares have outperformed the industry’s growth of 5.3%. The S&P 500 has risen by 15.5%, while the sector increased by 7.7% during the same period.
Catalysts Behind the Share Price Increase
The TJX Companies has been benefiting from strength in its Marmaxx operating segment. In the second quarter of fiscal 2024, Marmaxx’s net sales grew 9% year-over-year to $7,903 million. Its U.S. comparable store sales increased by 8% in Marmaxx, driven by solid apparel and accessories categories’ sales. An increase in customer traffic was the key driver behind the growth in comparable store sales.
The recovery in the company’s HomeGoods (U.S.) division due to growth in customer traffic also acts as a tailwind. In the HomeGoods (U.S.) division, its fiscal second-quarter net sales amounted to $2,011 million, reflecting an increase of 8.3% year over year. In the quarter, its U.S. comparable store sales rose 4% in the HomeGoods category.
Based on solid business momentum, TJX provided a strong outlook for fiscal 2024. For the fiscal year, comparable store sales are expected to grow by 3-4%, excluding sales from the 53rd week. The consolidated sales are envisioned in the band of $53.5-$53.8 billion, suggesting 7-8% year-over-year growth. For the fiscal third quarter, comparable store sales are likely to rise by 3-4%, while consolidated sales are expected to increase by 6-7% to $12.9-$13.1 billion.
The company has been rapidly expanding its footprint in the United States, Europe, Canada and Australia. It plans to add nearly 125 net new stores in fiscal 2024, taking its year-end total to roughly 5,000. TJX has been witnessing solid demand for an in-person shopping experience in the last few years.
TJX remains committed to rewarding shareholders through dividend payouts and share repurchases. For instance, in the fiscal second quarter, it paid out dividends of $382 million to its shareholders and repurchased shares worth $550 million. For fiscal 2024, the company plans to repurchase shares worth $2-$2.5 billion. Also, in the first quarter of fiscal 2024, management raised its quarterly dividend by 13% to 33.25 cents per share.
Other Key Picks
Some other top-ranked stocks from the Zacks Retail-Wholesale sector are:
Abercrombie & Fitch Co. ANF flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANF’s 2024 sales and earnings per share (EPS) implies increases of 10% and 1,644%, respectively, from a year ago. It has a trailing four-quarter earnings surprise of 724.8%, on average.
Arcos Dorados Holdings Inc. ARCO currently has a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 35%, on average.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19.2% and 13%, respectively, from the prior-year levels.
Ross Stores Inc. ROST currently has a Zacks Rank #2. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
The Zacks Consensus Estimate for Ross Stores’ current fiscal-year sales and EPS suggests growth of 7.1% and 19.4%, respectively, from the year-ago reported figures.
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The TJX Companies, Inc. (TJX) : Free Stock Analysis Report
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Ross Stores, Inc. (ROST) : Free Stock Analysis Report
Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report
