I've been concerned about the future of my shares of TJX Cos. Where do you think they are headed?
- R.Q., via the Internet
The retailer of discounted clothing and home fashions has more than 2,400 stores that benefit from its strong ties to such popular brands as Polo Ralph Lauren and Liz Claiborne.
Apparel-makers have fewer outlets to distribute merchandise because of rapid consolidation in the department store field, which benefits the company. Its focus on bargain hunting serves it well when the economy sputters. Shares of TJX Cos. (TJX) have been about flat this year, after a gain of 23 percent last year and a drop of 8 percent in 2005. The company has a record of increasing dividends and buying back shares.
It operates T.J. Maxx, Marshalls, HomeGoods, A.J. Wright and Bob's Stores in the United States; Winners and HomeSense stores in Canada; and T.K. Maxx stores in Europe. It closed 34 of its former 162 A.J. Wright stores in January.
Despite positive sales trends, there is some question as to how much further its primary T.J. Maxx and Marshalls concepts can grow, and whether other holdings could pick up any slack.
Consensus rating on its stock from Wall Street analysts is "buy," according to Thomson Financial. That consists of eight "strong buys," three "buys," seven "holds" and one "sell."
The company says it does not yet have enough information to fully assess costs associated with a recent credit security breach. Hackers broke into its system that handles credit and debit card transactions, checks and customer returns.
Customers who shopped at its stores in 2003 and from mid-May through December 2006 could be affected, the company said, including those in Maryland. A lawsuit charging negligence was filed on behalf of consumers, AmeriFirst Bank sued to recover its cost of replacing credit cards, and other suits are expected.
Earnings are expected to increase 15 percent in its just-started fiscal year, compared with 12 percent forecast for the department-store industry. The five-year annualized return is forecast at 12 percent versus the 14 percent predicted industrywide.
TJX has veteran leadership, with President Carol Meyrowitz, who joined the company in 1983, becoming chief executive in January. Veteran executive Bernard Cammarata continues to serve as chairman, as he has since 1999.
Andrew Leckey writes for Tribune Media Services.