tjx company analysi

TJX is the largest international apparel and home fashions off-price department store chain in the United States with 26 million in revenues in 2012. It was founded in 1956 as Zayre and is headquartered in Framingham, Massachusetts. Globally it is one of the top 50 retailers in the world, specializing in cheap apparel and footwear. With over 3,000 stores today, we see the potential to expand our store base by over 50%, up to almost 4,800 stores, with our current chains in our current markets alone. Their target customers are female, middle to upper-middle income, between the ages of 25-54 years that are fashion and value conscious. Beyond our successful brick-and-mortar business, we see expanding our e-commerce presence over time as a great opportunity for TJX and another platform to reach more customers with our great values. According to Forbes it is also #95 on the S&P 500. TJX comprises T.J. Maxx, Marshalls, HomeGoods, Winners, and T.K. Maxx. TJX’s stock price is currently selling at $63.52 significantly hire than the prices we calculated using the Price Earnings Model, Dividend Discount Model, and Discount Cash Flow Model which average out to about $33.39.
What makes TJX different from most retailers is that they operate with leaner, faster turning inventories. This allows them to be more nimble in the marketplace and be smarter in our purchasing, which, in turn, gives us the ability to drive higher merchandise margins. These high returns are due to the company's low-cost structure and solid revenue growth. As a result, TJX has generated significant free cash, which management has used to reinvest in new store growth and to provide value to shareholders through share repurchases (11% 10-year CAGR) and dividends (21% 10-year CAGR on a per share basis). TJX also has one of the strongest balance sheets in the industry positioning it to gain share and generate strong profitability in challenging economic environments, such as the current one.
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