Low-price retailer TJX
Despite the near-term share price hiccup, TJX continues to be one of the safer bets in retailing these days, along with big-box competitors like Wal-Mart
As has been customary at TJX, inventory was held tight and rose just 2.5%. And despite high fuel costs on freight, gross margins slipped just 10 basis points while solid cost controls elsewhere kept SG&A expenses flat as a percentage of sales. Cash flow generation was ample enough to maintain existing stores, open new ones, and leave excess capital to repurchase shares and support a modest 1.4% annual dividend yield. And based on management's guidance, the full year should lead to steady overall same-store sales growth of 2% to 3% and a 10% to 13% earning increase from the $1.91 posted last year.
TJX is no steal at nearly 16 times trailing free cash flow, but its strong stock performance over the past couple of years speaks to the fact that it remains one of a small handful of retailers that have been able to ride out a tough domestic retailing environment. Firms such as J.C. Penney
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Fool contributor Ryan Fuhrmann is long shares of Kohl's, but has no financial interest in any other company mentioned. Feel free to email him with feedback or to further discuss any companies mentioned. The Fool has an ironclad disclosure policy.