TJX CompaniesTJX

Morningstar Rating

Stock Research and Analysis

by Kimberly Picciola

TJX is a dominant force in off-price retailing and has been holding its own in the economic downturn given its value proposition. Having regained its footing after a turnaround effort in 2006, the company is benefiting from a challenging retail environment Read more

Bulls Say

TJX is benefiting from a weak economy as consumers trade down from department stores in search of brand-name merchandise at value prices.

With the recent consolidation in the department store sector, apparel manufacturers may look for other channels to distribute their merchandise, which could be an advantage for TJX.

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

TJX's customers enjoy the treasure-hunt atmosphere of its stores, with rapidly changing merchandise and compelling values. This environment encourages frequent customer visits.

TJX continues to expand internationally, with 10 store openings in Germany planned for 2009. Read more

Bears Say

T.J. Maxx and Marshalls have topped out in terms of domestic store growth. TJX will have to increasingly rely on its newer chains and international expansion for future growth.

A number of retailers use their own outlet stores as a way to clear excess inventory. This could limit the availability of quality, brand-name merchandise that TJX is able to sell in its stores.

The strategy of buying goods close to selling seasons gives TJX a smaller window of opportunity to sell its inventory at attractive prices.

Apparel manufacturers are becoming more adept at managing inventory levels, which could result in fewer goods to sell through the off-price channel. Read more

Strategy

TJX will continue its new store growth domestically and internationally, increasing its store base by roughly 60 stores in 2009. The company plans to improve its merchandise mix by sticking with the Read more

Management

Carol Meyrowitz stepped into the CEO role in January 2007, taking over from interim CEO Bernard Cammarata. She and Cammarata are both TJX veterans who returned to management positions in October 2005 to lead the company in a turnaround effort. We think Read more

Profile

TJX Companies is the nation's largest off-price retailer of brand-name apparel and home fashions. TJX offers family apparel through its T.J. Maxx, Marshalls, A.J. Wright, Read more

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