The TJX Companies (TJX) is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide, notes Ingrid Hendershot, a value-oriented money manager and editor of Hendershot Investments.

The company operates a total of 4,684 stores including 1,285 T.J. Maxx, 1148 Marshalls, 850 HomeGoods, 55 Sierra and 39 Homesense stores in the United States.

It delivers a rapidly changing assortment of quality brand name merchandise at prices 20%-60% less than department and specialty store regular prices. TJX can offer these savings because of its opportunistic buying strategies.

As the largest off-price retailer, TJX has tremendous buying power and solid relationships with more than 21,000 merchandise vendors in 100 countries. This retail recipe engenders strong brand loyalty from consumers of all ages.

The company reported third quarter revenues rang up a 24% gain to $12.5 billion as overall open-only comparable store sales increased 14%, driven by a 34% comparable store sales gain at HomeGoods. This is the third consecutive quarter that comp store sales increased mid-teens or better. Operating profit jumped 37% to $1.4 billion with net income and EPS each up 18% to $1.0 billion and $.84, respectively.

These results were well above management’s plan thanks to robust sales trends throughout the quarter. The home businesses across all divisions continued their “phenomenal” performance while the apparel business rebounded from the pandemic with comp store sales increasing by mid-single digits.

Fiscal year-to-date, the company generated $1.9 billion of operating cash flow and ended the quarter with $6.8 billion of cash. During the first nine months of the fiscal year, TJX paid $942 million in dividends and repurchased 16.3 million of its shares for $1.1 billion at an average price of about $67.48 per share.

Despite global supply challenges, TJX is well-positioned for the important holiday selling season with sales very strong with comp store sales up mid-teens as the company starts its fourth quarter.

The company is in an excellent inventory position with most of the product needed for the holiday season either on hand or scheduled to arrive at its stores and online in time for the holidays. TJX’s great values resonate well with its consumers around the world especially during inflationary times.

Management is very confident in continuing to gain market share, improving its profitability and reaching its strategic vision of becoming a $60 billion sales firm. Long-term investors shopping for a bargain should consider The TJX Companies, a well-managed high-quality business which is gaining market share with strong brand loyalty, outstanding cash flows and substantial share repurchases. Buy.

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