TJX Is Down but Not Out Following Its Results

TJX's latest results came up short, but is there hope for the rest of the year?

May 30, 2014 at 12:00PM

After it reported its results on May 20, 2014, shares of clothing and housewares retailer The TJX Companies (NYSE:TJX) plummeted by as much as 7.6%. Despite the drop, the company actually performed extremely well. While Wall Street analysts may not have liked what they saw, TJX put forth a solid performance. This fall in stock price might just be the opportunity that long term investors have awaited.

TJX continues to deliver
TJX's latest quarter ended May 3, 2014 showed a company in its prime. These results represent the company's first-quarter performance for the current fiscal year, which will conclude in January 2015. One of the quarter's highlights is the fact that total net sales increased by 5% over the same period last year to $6.5 billion, while same-store sales increased a respectable 1%.

Net income also grew by a decent amount for a company of its size to $454 million compared to $453 million in last year's first quarter. According to the company's press release, earnings-per-share growth would have been higher had it not been for foreign currency losses. While all divisions performed reasonably well, the company showed a particularly strong performance in its TJX Europe division, as its comparable-store sales jumped 8% over the same quarter last year.

TJX Companies appears unbeatable
Given the recent performance of TJX's main competitors, shareholders in TJX should be quite pleased with the company's growth. Kohl's (NYSE:KSS), for instance, which reported its latest quarterly results on May 15, 2014, not only saw its revenue fall to $4.07 billion from $4.199 billion in the year-ago period, but experienced a same-store sales decline of 3.4% as well. While the retailer is not going anywhere anytime soon, it also saw its net profit drop 15% to $125 million. This difference between the two companies is made even more obvious when looking at their sales results over the last several years.

Company Name

FY 2011

FY 2012

FY 2013


$18.8 billion

$19.28 billion

$19.03 billion

TJX Companies

$23.19 billion

25.88 billion

$27.42 billion

As you can see from the chart above, TJX is increasing its revenue much faster year-over-year than Kohl's despite the fact that it is a much larger company. Kohl's would be wise to develop a new business strategy to ramp up its sales with the hope of pulling consumers away from competitors like TJX.

Offering more favorable promotions may just be the thing to drive sales growth higher from what it's been over the last few years. There's no question that consumers love the price to quality deal that they receive at TJX's stores. Sales are likely to continue to increase for TJX throughout the current fiscal year as consumers search out the best stores to get the most bang for their bucks.

Foolish takeaway
While shares of TJX reacted negatively to the company's results, this likely resulted from too much of a short-term focus. The company has been one of the great retail success stories in recent years, and has managed to thrive where companies like Sears Holdings and J.C. Penney have seen their customers leave in droves.

As investors can see from the results of competitors like Kohl's, shareholders in TJX have nothing to complain about. They own a strong company that is delivering growth while its competitors are suffering. If you don't already own shares of TJX, it is definitely worth a closer look by Foolish investors. 

Leaked: Apple's next smart device (warning, it may shock you)
Apple recent recruited a secret-development "dream team" to guarantee their newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And their stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Natalie O'Reilly has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information