How TJX's Success Continues to Defy Traditional Brick-and-Mortar Retail -- Ahead of the Tape
2016年8月16日 - 4:43AM
Dow Jones News
By Steven Russolillo
In this difficult retail environment, TJX Cos. keeps passing
competitors while marching to its own beat.
The parent of T.J. Maxx, Marshalls and HomeGoods has thrived by
buying much of its merchandise -- including current season,
name-brand products -- through closeouts and selling it at
discounted prices. This approach stands out for its success,
particularly as shoppers shun traditional brick-and-mortar
retailers in favor of online outlets like Amazon.com.
With consumers spending at a healthy clip and the macroeconomic
backdrop remaining favorable, there is little reason to think TJX
is set for a stumble in its fiscal second-quarter results, out
Tuesday. Analysts polled by FactSet estimate earnings of 81 cents a
share for the period ended in July, up 1% from a year before.
Revenue is expected to have increased by 7% to $7.85 billion.
TJX's expansion strategy stands out the most; as department
stores shutter locations, it plans to aggressively open more
stores. In May, TJX said it would boost its store count to 5,600 in
the coming years, up from nearly 3,700 today. That seems lofty, but
might be justified if it can replicate its revenue growth. TJX's
sales per square foot tops many of its competitors, including J.C.
Penney Co. and Macy's Inc.
Competitors' pain is TJX's gain, too. Macy's disclosed last week
that it plans to close 100 stores, or 15% of its store base, next
year. That alone could add as much as 1 percentage point to TJX's
same-store sales growth, according to analysts at Deutsche
Bank.
And more could be to come. Green Street Advisors estimates
department stores need to close roughly 800 locations just to
regain the sales productivity they enjoyed a decade ago.
Investors have been rewarded handsomely for TJX's success. The
stock has risen at a 25% annual pace over the past five years and
hit a fresh record on Monday.
The risk is that the bar is set pretty high for Tuesday's
earnings. Fetching 22 times projected earnings over the next 12
months, the stock isn't cheap relative to department stores.
But, as one of the few success stories in retail, TJX's shares
don't need a discount to keep flying off the shelves.
(END) Dow Jones Newswires
August 15, 2016 15:28 ET (19:28 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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