TJX CompaniesTJX

TJX continues to benefit from weaker consumer spending and a value-conscious mind-set.

TJX is the established leading retailer of off-price apparel and home fashions, with almost 3 times the sales of its closest competitor.

TJX stands to benefit even if commodity prices remain high; as long as full-price retailers increase prices, so can TJX, thereby protecting its margins.

ROICs should remain higher than the cost of capital for the foreseeable future, indicating that the company generates excess economic profits.

TJX changes it merchandise frequently and offers new fashion at compelling values, which encourages frequent customer visits. Read more 

TJX will have to increasingly rely on its newer chains and international expansion for future growth, which could be tricky if economic instability remains in Europe.

Many retailers now use their own outlet stores as a way to clear excess inventory, which could limit the availability of quality merchandise that TJX has access to. Additionally, apparel manufacturers are getting better at managing inventory levels, which could result in fewer units to sell through the off-price channel.

If consumer confidence stabilizes and spending improves, consumers may trade back up to full-price retailers.

With discount retailers like DSW already online, TJX might experience share loss in certain categories where other well-known competitors are already participating in the e-commerce space. Read more