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TJX Rises to 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 $51.59 on Tuesday, May 14, following the reports of strong sales for Apr 2013. They surpassed the previous 52-week high of $48.97 on Monday, Apr 29.

The closing price of the textile retailer on May 14 was $51.45, representing a solid 1-year return of about 21.2% and year-to-date return of about 19.2%. Average volume of shares traded over the last three months stands at approximately 4323K.

Growth Drivers

Consolidated same-store sales at The TJX Company climbed 8% year over year in the four-week ended May 4, 2013. Comparable-store sales in the period were at the higher end of the guidance provided by management.

Total sales climbed 9% to $2.0 billion in the aforementioned period. The growth is attributable to the strong customer traffic at all the divisions of TJX driven by fresh spring collections. Both apparel and home categories delivered strong results during the month.

Following solid pick up in sales, the company refined its guidance and expects earnings per share between 61 cents and 62 cents for the first quarter of 2014 instead of 60 cents and 62 cents as announced previously.

From May 2, 2013, TJX issued 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.

On Apr 2013, TJX announced that its board of directors has approved a 26% hike in its regular quarterly dividend. This is the 17th consecutive year in which the company has hiked its quarterly dividend.

TJX will now pay 14.5 cents dividend per share to its shareholders compared to 11.5 cents paid earlier. The increased dividend will be paid on Jun 6, 2013, to shareholders of record as of May 16, 2013. The increased dividend reflects the company’s sound financial position.

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 #2 (Buy).

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