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Do any of you remember the routine?
“Come on kids, get in the car!”
“Where are we going?”
“McDonalds!”
“Yay!”
“But first we have to make one stop…….”
Then we would spend 3 hours at Marshalls and young $$$MR. MARKET$$$ would lie down on the linoleum floor. Now there’s no doubt that there were bargains to be found at Marshalls. I mean what better way to spend a splendid summer Saturday afternoon than looking for stuff that was 50% off at Marshalls?? Can you imagine what 50% off at Marshalls must cost? It must be zero or less than zero.
Look at these beautiful stores:
Anyway, we weren’t the only ones going to Marshalls. Marshalls’ is part of the TJX Companies and I love the stock. While you were thinking about the holiday weekend, on Friday I bought TJX at 40.99. I will sell it in 4 – 6 weeks at 47.33. Here’s why I like TJX:
First of all, you have to love the chart:
The stock is up 54% in the last 12 months with a PE of only 19. To me, it’s the steady climb that’s attractive. The climb is directly attributable to earnings and as long as TJX continues to open new stores, there’s going to be new earnings.
There is a widely held belief on Wall Street that investing in growth stocks entails a little more risk than "value" stocks since investors looking for growth are willing to pay more while value investors do not. Inherent in this belief is the distinction between value and growth investing. On the contrary, value and growth investing are joined at the hip; growth creates value. Also incorrect, is the belief that investing in growing companies constitutes taking on greater risk.
The TJX Companies, Inc. operates as an off-price apparel and home fashions retailer in the United States and internationally. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and impressive record of earnings per share growth. The company pays a 1.12% dividend yield and is currently priced at 15.1 times its forward earnings. TJX's earnings rose 18.58% over the past 5 years. Going forward ANAL-ysts expect the company to earn 13.28% a year on average over the next five years.
Recent earnings results support these projections: Net income for TJX Companies Inc. rose to $419.2 million (55 cents per share) vs. $266 million (34 cents per share) in the same quarter a year earlier. This marks a rise of 57.6% from the year-earlier quarter.
Revenue: Rose 11.1% to $5.8 billion from the year-earlier quarter.
Actual vs. Wall St. ANAL-yst Expectations: TJX Companies Inc. beat the mean analyst estimate of 54 cents per share. Analysts were expecting revenue of $5.75 billion.
The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 42.1% and in the third quarter of the last fiscal year, the figure rose 9.2%.
Revenue has risen for the last four quarters. Revenue increased 6% to $6.71 billion in the fourth quarter of the last fiscal year. The figure rose 4.8% in the third quarter of the last fiscal year from the year earlier and climbed 7.9% in the second quarter of the last fiscal year from the year-ago quarter.
What is Off-price Retailing?
• Brand-name name merchandise at great values
• Opportunistic buying
• Substantially lower prices than department and specialty store regular prices
• Rapidly changing assortments
• Aggressive inventory management
• Low cost structure
Who are their Core Target Customers?
• Female
• Between 25-54 years old
• Middle to upper-middle income
• Fashion and value conscious
• Shops high-end department and specialty stores (that means the women buy the good stuff for themselves and make their husbands and kids wear the cheap stuff).
• Entertainment/Treasure hunt experience
Powerful Global Buying
• 14,000+ vendors
• 60+ countries
• 700+ people in merchant organization
Key TJX Success Factors
• Flexible, value-oriented business model
• Rapidly turning inventories/visibility into market trends
• Growth in strong/weak retail environments
• Strong, mutually beneficial vendor relationships
• Broad international base operating in 6 countries
• One of widest demographic reaches in retail
• Financial strength, excellent returns
Thanks to a value seeking consumer, TJX will likely do well for many years to come. At its flagship TJ Maxx store, consumers can find their favorite brands include Polo, Nike and other quality fashions and apparel merchandise for a fraction of the retailing cost. Even as the economy improves, consumers will not abandon their value seeking habits.
With remarkable earnings, these stores couldn’t be much plainer, one giant room stuffed to the gills with goods. That pretty much matches the corporate strategy: sell a lot of clothing and household goods rapidly and at a cheap price. And keep getting just a little bit better at doing those things. By keeping costs low, keeping inventories tight and turning the merchandise rapidly TJX has been generating impressive sales growth. The company says it buys inventory closer to the time it’s needed to stock its stores, picking up some bargains in the process. The average value of a retail transaction was actually lower last year than the prior year, but TJX managed to bring lots more customers through the doors.
Competition? What competition? There are currently 35 companies in the Department Stores Industry; of these, TJX Companies ranks eighth in terms of market cap. This company also stands out in terms of return on equity, which is the second highest in the industry, as well as its 1.1% annual dividend yield, which is fifth highest.
As of May 1, TJX had $1.96 billion in cash and under $800 million in long-term debt. The flagship chains’ same store sales were up 10%. Not bad in a crummy economy. TJX has been able to declare regular dividends and has been a growing company. It opened 32 stores in the second quarter.
Don’t take it from me..take it from the loyal customers:
“Most of the time, these discount stores are disorganized and dirty. Not this one. It's very clean and they do carry things that I love for quarter the price.”
“Although I haven't bought clothing from here, I have bought things for the home and my favorite Yankee Candles. Paying less for the same stuff I can buying at the high end stores is smart so I rather save than be stupid.”
“There are some useless things here too. But if you know what you like and know what things are worth, this definitely is a great store.”
“I love Marshalls anywhere, but I frequent this store most often.. It's pretty clean, has a frequently-updated selection of clothing and home goods. I only wish their children's section were larger.”
“I looooove Marshalls. I cannot begin to list all the great deals I found here. Let me recap the highlights, though. I bought my first pair of Chip & Pepper jeans here. I have officially found the brand that makes jeans for my body... At 100 bucks off the retail price, who can complain? I bought 2 items of Da-Nang here. Love them. European cosmetics at up to $75 off. Italian handbags.”
“It's tough to get lucky at Marshalls, I will not deny it. So much tasteless crap. So much (still) overpriced basics. So much time wasted under those fluorescent lights. But in the end, I think it's worth it. I cannot set foot in a regular department store again.”
“I love all Marshall's stores in general, but each one is hit or miss. The great part is that the inventory tends to turn quickly, so you can visit twice in one week and find completely new items in a matter of a few days. If you don't mind digging through racks, shelves and searching for matching items (such as in housewares), then you will almost always find a super name-brand bargain here. If you have the time to spare, this is the place to shop!”
And of course..here’s what the bosses have to say:
Carol M. Meyrowitz:
“Well, as I said, we're really strong across the board. Both apparel and home has been really terrific. I think there's tremendous color changes this year. I think we're feeling pretty good about the fashion. But Ernie will tell you, men's, kid's, it's really strong across the board. We are extremely pleased that our strong momentum continued in the first quarter. Consolidated comparable store sales increased 8% and earnings per share were up 41% over last year’s adjusted EPS. We are particularly pleased that our performance was so strong across the board, with our U.S., Canadian and European businesses all delivering outstanding results.”
You got to like a company with a guy named Ernie at the helm:
Ernie L. Herrman
“It has been. And I think one of the -- I think you're asking about how does it tie in to the model and the way we operate. The advantage to this model, and we talked about it before, is the flexibility and the close-ins tying it, it allows our buyers to capitalize on fashion trends or even weather trends. So if the weather is working one way or another, it can create opportunities in the marketplace for us to get goods at a different or a better value. In terms of the fashion, we're able to read products. We're north, south, everywhere in the states, so we can read products and buy close-in purchases and still take advantage of those fashion trends in all the different fashion areas of the company. And interestingly enough, that happens to be a place that Carol and I have talked about as an opportunity for the back half here and just to do a little bit better job in our fashion areas. But the model plays well in allowing us to do that.”
So $$$MR. MARKET$$$ is going to make a truckload of money on this stock so I can send my kids back to college with a new wardrobe. With all this extra money, will I take them shopping at Ralph Lauren? Ha ha ha ha ha ha! Marshalls here we come!
I am HUGE!!!
$$$MR. MARKET$$$
“Come on kids, get in the car!”
“Where are we going?”
“McDonalds!”
“Yay!”
“But first we have to make one stop…….”
Then we would spend 3 hours at Marshalls and young $$$MR. MARKET$$$ would lie down on the linoleum floor. Now there’s no doubt that there were bargains to be found at Marshalls. I mean what better way to spend a splendid summer Saturday afternoon than looking for stuff that was 50% off at Marshalls?? Can you imagine what 50% off at Marshalls must cost? It must be zero or less than zero.
Look at these beautiful stores:
Anyway, we weren’t the only ones going to Marshalls. Marshalls’ is part of the TJX Companies and I love the stock. While you were thinking about the holiday weekend, on Friday I bought TJX at 40.99. I will sell it in 4 – 6 weeks at 47.33. Here’s why I like TJX:
First of all, you have to love the chart:
The stock is up 54% in the last 12 months with a PE of only 19. To me, it’s the steady climb that’s attractive. The climb is directly attributable to earnings and as long as TJX continues to open new stores, there’s going to be new earnings.
There is a widely held belief on Wall Street that investing in growth stocks entails a little more risk than "value" stocks since investors looking for growth are willing to pay more while value investors do not. Inherent in this belief is the distinction between value and growth investing. On the contrary, value and growth investing are joined at the hip; growth creates value. Also incorrect, is the belief that investing in growing companies constitutes taking on greater risk.
The TJX Companies, Inc. operates as an off-price apparel and home fashions retailer in the United States and internationally. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and impressive record of earnings per share growth. The company pays a 1.12% dividend yield and is currently priced at 15.1 times its forward earnings. TJX's earnings rose 18.58% over the past 5 years. Going forward ANAL-ysts expect the company to earn 13.28% a year on average over the next five years.
Recent earnings results support these projections: Net income for TJX Companies Inc. rose to $419.2 million (55 cents per share) vs. $266 million (34 cents per share) in the same quarter a year earlier. This marks a rise of 57.6% from the year-earlier quarter.
Revenue: Rose 11.1% to $5.8 billion from the year-earlier quarter.
Actual vs. Wall St. ANAL-yst Expectations: TJX Companies Inc. beat the mean analyst estimate of 54 cents per share. Analysts were expecting revenue of $5.75 billion.
The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 42.1% and in the third quarter of the last fiscal year, the figure rose 9.2%.
Revenue has risen for the last four quarters. Revenue increased 6% to $6.71 billion in the fourth quarter of the last fiscal year. The figure rose 4.8% in the third quarter of the last fiscal year from the year earlier and climbed 7.9% in the second quarter of the last fiscal year from the year-ago quarter.
What is Off-price Retailing?
• Brand-name name merchandise at great values
• Opportunistic buying
• Substantially lower prices than department and specialty store regular prices
• Rapidly changing assortments
• Aggressive inventory management
• Low cost structure
Who are their Core Target Customers?
• Female
• Between 25-54 years old
• Middle to upper-middle income
• Fashion and value conscious
• Shops high-end department and specialty stores (that means the women buy the good stuff for themselves and make their husbands and kids wear the cheap stuff).
• Entertainment/Treasure hunt experience
Powerful Global Buying
• 14,000+ vendors
• 60+ countries
• 700+ people in merchant organization
Key TJX Success Factors
• Flexible, value-oriented business model
• Rapidly turning inventories/visibility into market trends
• Growth in strong/weak retail environments
• Strong, mutually beneficial vendor relationships
• Broad international base operating in 6 countries
• One of widest demographic reaches in retail
• Financial strength, excellent returns
Thanks to a value seeking consumer, TJX will likely do well for many years to come. At its flagship TJ Maxx store, consumers can find their favorite brands include Polo, Nike and other quality fashions and apparel merchandise for a fraction of the retailing cost. Even as the economy improves, consumers will not abandon their value seeking habits.
With remarkable earnings, these stores couldn’t be much plainer, one giant room stuffed to the gills with goods. That pretty much matches the corporate strategy: sell a lot of clothing and household goods rapidly and at a cheap price. And keep getting just a little bit better at doing those things. By keeping costs low, keeping inventories tight and turning the merchandise rapidly TJX has been generating impressive sales growth. The company says it buys inventory closer to the time it’s needed to stock its stores, picking up some bargains in the process. The average value of a retail transaction was actually lower last year than the prior year, but TJX managed to bring lots more customers through the doors.
Competition? What competition? There are currently 35 companies in the Department Stores Industry; of these, TJX Companies ranks eighth in terms of market cap. This company also stands out in terms of return on equity, which is the second highest in the industry, as well as its 1.1% annual dividend yield, which is fifth highest.
As of May 1, TJX had $1.96 billion in cash and under $800 million in long-term debt. The flagship chains’ same store sales were up 10%. Not bad in a crummy economy. TJX has been able to declare regular dividends and has been a growing company. It opened 32 stores in the second quarter.
Don’t take it from me..take it from the loyal customers:
“Most of the time, these discount stores are disorganized and dirty. Not this one. It's very clean and they do carry things that I love for quarter the price.”
“Although I haven't bought clothing from here, I have bought things for the home and my favorite Yankee Candles. Paying less for the same stuff I can buying at the high end stores is smart so I rather save than be stupid.”
“There are some useless things here too. But if you know what you like and know what things are worth, this definitely is a great store.”
“I love Marshalls anywhere, but I frequent this store most often.. It's pretty clean, has a frequently-updated selection of clothing and home goods. I only wish their children's section were larger.”
“I looooove Marshalls. I cannot begin to list all the great deals I found here. Let me recap the highlights, though. I bought my first pair of Chip & Pepper jeans here. I have officially found the brand that makes jeans for my body... At 100 bucks off the retail price, who can complain? I bought 2 items of Da-Nang here. Love them. European cosmetics at up to $75 off. Italian handbags.”
“It's tough to get lucky at Marshalls, I will not deny it. So much tasteless crap. So much (still) overpriced basics. So much time wasted under those fluorescent lights. But in the end, I think it's worth it. I cannot set foot in a regular department store again.”
“I love all Marshall's stores in general, but each one is hit or miss. The great part is that the inventory tends to turn quickly, so you can visit twice in one week and find completely new items in a matter of a few days. If you don't mind digging through racks, shelves and searching for matching items (such as in housewares), then you will almost always find a super name-brand bargain here. If you have the time to spare, this is the place to shop!”
And of course..here’s what the bosses have to say:
Carol M. Meyrowitz:
“Well, as I said, we're really strong across the board. Both apparel and home has been really terrific. I think there's tremendous color changes this year. I think we're feeling pretty good about the fashion. But Ernie will tell you, men's, kid's, it's really strong across the board. We are extremely pleased that our strong momentum continued in the first quarter. Consolidated comparable store sales increased 8% and earnings per share were up 41% over last year’s adjusted EPS. We are particularly pleased that our performance was so strong across the board, with our U.S., Canadian and European businesses all delivering outstanding results.”
You got to like a company with a guy named Ernie at the helm:
Ernie L. Herrman
“It has been. And I think one of the -- I think you're asking about how does it tie in to the model and the way we operate. The advantage to this model, and we talked about it before, is the flexibility and the close-ins tying it, it allows our buyers to capitalize on fashion trends or even weather trends. So if the weather is working one way or another, it can create opportunities in the marketplace for us to get goods at a different or a better value. In terms of the fashion, we're able to read products. We're north, south, everywhere in the states, so we can read products and buy close-in purchases and still take advantage of those fashion trends in all the different fashion areas of the company. And interestingly enough, that happens to be a place that Carol and I have talked about as an opportunity for the back half here and just to do a little bit better job in our fashion areas. But the model plays well in allowing us to do that.”
So $$$MR. MARKET$$$ is going to make a truckload of money on this stock so I can send my kids back to college with a new wardrobe. With all this extra money, will I take them shopping at Ralph Lauren? Ha ha ha ha ha ha! Marshalls here we come!
I am HUGE!!!
$$$MR. MARKET$$$
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