By most measures, the just-finished 2007 fiscal year was going very well for TJX Companies (NYSE: TJX). Comparable-store sales were up at every concept, spending on expansion was more measured, and the share price had finally started to move up.
This momentum has fallen off since TJX suffered a security breach, leaving investors wondering if there will be an impact on sales, and retailers in general have slowed as concerns about a softening economy mount.
The full-year results the company released last week show little signs of the business itself weakening, which in the long term is going to be the measure of success for TJX and its shareholders. The comparison of this year's results with last year's can be found here. Some may want to ding the company for its sales growth being slightly below the published estimates, but overall, it's hard to find a lot of fault. The company's balance sheet remained strong, and it materially increased sales, earnings, and cash flows. As an investor, you can't ask for much more than that.
The security breach, though wider than initially assumed, doesn't look like it has made a dent in sales yet. For both the fourth quarter and the full year, same-store sales were positive at every single concept TJX operates. In some cases there are signs of the business strengthening, as T.K. Maxx, TJX's UK version of TJ Maxx, reported a 10% same-store sales increase in the fourth quarter on top of last year's 7% increase in the fourth quarter. Even the Marshall's and TJ Maxx combination in the U.S., by far the largest part of the business, had a positive quarter on top of last year's positive quarter.
Competitors Stein Mart (Nasdaq: SMRT) and Ross Stores (Nasdaq: ROST) are smaller, but still haven't been able to match the overall performance by TJX recently. In fact, Stein Mart saw its same-store sales decline last month.
Next week, we'll have another month of same-store sales from TJX to look at and see if sales trends continue to remain healthy. In the meantime, $27 a share is about 10% below where I value TJX. With the market's recent volatility, there might be a chance to pick up shares for less than $25, which I think is a good price for a good company.
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At the time of publication, Nathan Parmelee had no financial interest in any of the companies mentioned -- but that's nothing personal. He was ranked 73rd out of 23,508 CAPS investors. The Motley Fool has an ironclad disclosure policy.
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