TJX Is a Reliable Off-Price Retailer, But for Investors, Is the Premium Too High?
The off-price leader continues to deliver strong results, but with a mature U.S. store base, a premium valuation puts pressure on management to find new sources of growth.
TJX Is a Reliable Off-Price Retailer, But for Investors, Is the Premium Too High?
Overview
The TJX Companies (NYSE: TJX) has earned its reputation for providing value to both its customers and its long-term shareholders. Yet with shares up 34% over the past year and the stock now trading at roughly 32 times this year's earnings estimates, the value proposition for investors may be fading.
Operationally, the business remains strong. In the first quarter, same-store (comp) sales rose 6%, driven by higher customer traffic and spending per visit. The balanced growth across TJ Maxx, Marshalls, and HomeGoods, which posted an impressive 9% comp, shows the company continues to attract a broad range of customers.
Details
The company's "treasure hunt" shopping experience has proven a durable advantage that resonates with younger shoppers. These Gen Z and millennial shoppers now account for a disproportionate number of its new customers, according to management.
Source
Originally published at www.fool.com.
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