It’s Not All Doom And Gloom In Retail 


TJX companies outperform and grow with solid results

TJX companies (NYSE: TJX) shows that not everything is sad in the retail sector. While top retailers like Target and Walmart are struggling with growth and margins, priceless retailers like The TJX Companies are getting closer. Customers are not only looking for deals, but there is a lot of merchandise for TJX companies to sell. The company took advantage of retail closures over the past year and increased inventory by almost 38% while buying shares and paying a good dividend. The bottom line is that The TJX Companies is well positioned for the year, widening margins and increasing the direction where others in the retail sector are doing exactly the opposite.



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TJX companies have a mixed quarter

TJX companies had a mixed quarter, but that’s as bad as the news. $ 11.4 billion in revenue lost Marketbeat.com consensus by 145 basis points, but we chose to focus on 13.1% year-over-year growth and margin. By segments, the Marmaxx segment grew 3% (12% open only) while the Homegoods segment contracted 7%. Home goods sales are still up 17% on an open-ended comparison alone, so the data isn’t as bad as it sounds. Over a three-year period, in relation to the pre-pandemic levels of 2019, revenues have increased by 23%.

As for the margin, the news is a bit mixed, but the contraction of the gross margin of 20 basis points is offset by 220 basis points of expansion of the operating margin, so it is ultimately bullish. The highlight, however, is that the margin was better than expected and resulted in a higher performance on the bottom line despite the weakness of the top line. BPA-adjusted $ 0.68 increases in 1, 2, and 3-year comparisons and $ 0.08 better than expected, including a $ 0.19 Russian-related deterioration. The TJX Companies owns a minority stake in a priceless Russian retailer that it is working to sell.

The trend is equally mixed and skewed upwards, with second-quarter earnings and earnings expected to fall year-on-year and the fiscal year to extend. The fiscal year guide calls for a BPA of $ 3.13 to $ 3.20 compared to the $ 3.16 Marketbeat.com consensus, which has yet to be adjusted for Russia’s impact. As the company is still working to improve the margin, we also see an upside risk in the figures, at least in the end result.

Capital returns help lift TJX companies

TJX Companies pays a healthy dividend and repurchases shares with its cash flow and is on track to offer more than $ 3 billion in capital returns to shareholders. The company bought shares worth $ 600 million in the first quarter and can be expected to buy up to $ 1.9 billion more by the end of the year. This is worth about 2.9% of the market capitalization and this is in addition to the dividend. The dividend is worth about 1.9% with shares listed at $ 61 and comes with a positive expectation of distribution growth. The council approved an increase for the first quarter that has already been declared and the payout ratio is comfortably low and below 40%.

Technical outlook: TJX companies confirm support

The price action in The TJX Companies appeared as a result of the earnings report and has put an end to the downward trend. The caveat is that price action met resistance at the top of the recent range and resistance is limiting the advance. If the market does not exceed $ 62.60, there is a risk that the downward trend will resume regardless of the outlook, but we do not believe that this will happen. Our worst case scenario is the trade of ranks at current levels. The best case scenario is that price action will move above $ 62.60 and start a new uptrend, but we are a little skeptical about it just because the general market conditions are very bad.
TJX companies: not everything is Doom and Gloom retail



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