Featuring TJX from the Growth & Income Portfolio - Growth & Income

Shares of The TJX Companies, Inc. (TJX) have been strong after the company recently reported better-than-expected same-store sales for December and raised its earnings guidance.

Strong December Sales

On Friday, January 6, the company reported December sales were up 6% over the same month last year. Same-store sales increased 2%. This came as a positive surprise as analysts were looking for a 2.5% drop in comp sales. This also comes on top of a very strong 14% jump in same-store sales last year.

Guidance Raised

Management also raised its full year earnings guidance for 2011 in the same press release. The company now expects to earn between $3.41 and $3.45 per share.

Analysts unanimously raised their estimates higher off the news. The Zacks Consensus Estimate for 2011 is now $3.45, up from $3.40 just 7 days ago. This represents 21% growth over 2010 EPS. The 2012 estimate is currently $3.77, equating to 9% annual EPS growth.

Estimates have been trending higher over the last several months as the company continues to deliver solid results.

Fundamentals

The valuation picture still looks attractive for TJX. Shares trade at 13.3x forward earnings, a discount to the industry average of 16.9x. It has a PEG ratio of just 0.9.

TJX has raised its dividend every year since 1997, and at an impressive 22% annual rate since 2000. It currently yields 1.3%.

Company Description

The TJX Companies, Inc. is an off-price retailer that sells name-brand goods at significant discounts. It does so by taking advantage of overstocking and canceled orders at full-priced retailers. TJX will buy this excess inventory at a steep discount and pass much of the savings on to its customers.

Its major stores include T.J. Maxx, Marshalls, and HomeGoods stores in the U.S.; Winners Apparel in Canada; and T.K. Maxx in Europe.

TJX is down about 2% since it was added to the Growth & Income portfolio on November 4, 2010. It is a Zacks #3 Rank (Hold) stock.

Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.

 
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