Only moments from becoming BBQ for Mr. Fox in Uncle Remus' fable, Brer Rabbit used reverse psychology and convinced his tormentor to fling him into the brier-patch. From there, Mr. Rabbit easily escaped unscathed, since that's where he was bred and born.

Well, recessions are to discount retailers what brier-patches were to Mr. Rabbit, and TJX Companies (NYSE:TJX), which operates T.J. Maxx, Marshalls, and a variety of other off-price clothing and home fashion retailers, seems tailor-made for difficult economic conditions.

No reverse psychology here
Despite a few material setbacks, TJX's first quarter of fiscal 2010 spawned what management characterized as its strongest results ever. On slightly higher revenues of $4.35 billion, the company reported 17% higher earnings from last year to $0.49 per share, after adjusting for a tax benefit in the prior-year period.

And those results came despite some strong headwinds. Foreign currency translation impacts, mark-to-market adjustments on inventory hedges, and one-time cost reduction initiatives shaved a nickel off its bottom line, so without those expenses, EPS growth would have been even stronger.

Not too shabby
It's clear that investors have been happy with TJX. Its stock has outperformed its peers in a year when practically everyone lost huge amounts of money.


1-Year Return

TJX Companies


Kohl's (NYSE:KSS)


J. C. Penney (NYSE:JCP)


Dillard's (NYSE:DDS)


Sears Holdings (NASDAQ:SHLD)


Macy's (NYSE:M)




Source: Yahoo! Finance.

Moreover, TJX shares have risen up over 42% so far this year. Along with a recent jump in its dividend, investors have had a lot of good news lately.

Where's the rent?
Yet, I do have one concern. One of the most important aspects of a retailer's ability to thrive -- rent -- isn't broken out separately in TJX's earnings release. Without a separate line-item for rent expense, you have to wait for the company's 10-Q filing -- which typically follows the press release by a week or two -- to try to get a handle on where TJX stands.

In retail, rent can be a key measure, especially during tough times. If sales decline too far, then rental expenses -- which may also fall somewhat but typically have minimums built in -- can become a greater percentage of total costs and adversely affect operating margins.

What I really think
Even with that concern, if I had to invest in one department store, it would probably be TJX. At almost 43%, it has the highest return on equity of any of the companies above. And looking at its implied cost of equity and how it compares with its competitors, I think it has the best prospects for future profits.

But at the end of the day, it's really TJX's recession-resistant characteristics and ability to generate residual income that make me feel all warm and fuzzy on the inside. It's the exact same way the soft cotton Hickey Freeman Oxford I picked up at Marshall's for $13 this week makes me feel on the outside.

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Fool contributor Chris Jones has no positions in any of the companies mentioned in this article. The Motley Fool's disclosure policy never tells a lie.