What happened

TJX Companies(TJX -1.24%) stock underperformed a weak market last month. Shares fell 20% compared to a 12.5% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.

The slump left shareholders down 28% so far in 2020, compared to a 22% drop in broader indexes.

A woman carrying shopping bags on an escalator

Image source: Getty Images.

So what

The off-price retailing giant was caught in the COVID-19 pandemic and related containment measures, which forced the closure of over 4,500 stores beginning on March 19. TJX Companies entered the disruption with solid operating momentum after having posted its 23rd consecutive year of positive sales growth in 2019. 

Yet the abrupt end of in-store selling put the chain into cash preservation mode as management drew down its entire $1 billion credit line, scaled back on capital expenditures, and suspended stock repurchase spending. CEO Ernie Hermann and his team are even considering pausing or reducing the dividend, which has increased in each of the last 23 years.

Now what

Investors won't know the true scope of this disruption until COVID-19 begins receding in Europe and the U.S., just as it has in places such as China and South Korea. When that happens, the retailing industry will rebound but will likely need some time before approaching normal operating conditions.