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TJX Reaches a New 52-Week High

Zacks Equity Research

Shares of the off-price apparel chain The TJX Company (TJX) reached a new 52-week high of $48.97 on Monday, Apr 29, following the company’s announcement of its guidance for the first quarter of fiscal 2014 and strong sales in Mar 2013. They surpassed the previous 52-week high of $48.2 on Apr 9.

The closing price of the textile retailer on Apr 29 was $48.84, representing a solid 1-year return of about 17.1% and year-to-date return of about 13.1%. Average volume of shares traded over the last three months stands at approximately 4446K

Growth Drivers

Total sales for the five-week period ended Apr 6, 2013, climbed 5% for the aforementioned period to $2.4 billion. The modest growth is attributable to the early Easter coupled with the unusually cold weather across the U.S., Canada and Europe.

Although consolidated same-store sales descended 2% year over year in the five-week period ended Apr 6, 2013 they were within the guidance provided by management. However, comparable store sales climbed in regions where the weather was warmer. Management also noted that sales picked up at the end of March, as weather improved, and the company started April with a good momentum and an excellent inventory.

Following solid pick up in sales during the first quarter, the company upgraded its guidance for the first quarter of fiscal 2014 and now expects earnings per share between 60 cents and 62 cents compared with the earlier guidance range of 59 cents to 62 cents.

Scheduled to start from May 2, 2013, TJX will issue public offering of $500 million aggregate principal amount of notes due 2023 bearing interest of 2.50% per annum. Although it will increase the company’s debt, the company will use the net proceeds from the sale of the notes for working capital and other general corporate purposes.

TJX Companies Inc. is an off-price global retailer of apparel and home fashions. The company operates 2,906 stores in the U.S., Canada and Europe.

TJX currently carries a Zacks Rank #3 (Hold). Other favorable stocks in the retail and wholesale sector that are worth considering include Macy’s Inc (M), Sears Holding Corporation (SHLD), both holding a Zacks Rank #1 (Strong Buy), and Safeway Inc (SWY) holding a Zacks Rank #2 (Buy).

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