TJX Companies (TJX) Prepare for Shareholder Friendly Movements
TJX, Inc. TJX wants to improve shareholder returns through share buybacks and the declaration of dividends. Apart from these, the company benefited from the focus on store and e-commerce growth efforts.
Incidentally, the world leader in low-cost clothing and fashion for the home recently announced that it has reinstated its share buyback program. In this regard, management plans to repurchase shares of the company worth $ 1 to $ 1.25 billion until the end of the fiscal year on January 29, 2022. Notably, the company has nearly $ 3 billion dollars of shares remaining under its existing share repurchase plans.
Apart from this, TJX Companies recently announced a quarterly dividend of 26 cents per share, payable on September 2, 2021 to shareholders of record on August 12, 2021. TJX Companies currently have a free cash flow yield of 8.1% , dividend payment of 70.7% and dividend yield of 1.5%. With a return on investment of annual free cash flow of 36.1%, ahead of the industry’s 30.4%; the dividend is likely to be sustainable. We believe that dividend payments and share buybacks are the biggest draws for investors and The TJX Companies is committed to increasing shareholder wealth.
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In the second quarter of fiscal 2022 (as of May 27, 2021), the TJX companies witnessed the overall open-only store sales trends that prevailed in the first quarter. In the first quarter of the fiscal year, the metric increased 16% from the FY2020 level. The metric increased by 12%, 40%, 9% and 11% for Marmaxx (US), HomeGoods (United States), TJX Canada and TJX International (Europe and Australia), respectively. The company saw encouraging sales at product stores open only in the general apparel category, with consumers starting to resume normal activities during the quarter.
Well, The TJX Companies has benefited from its strong growth efforts in store and ecommerce. It regularly opens stores and is expanding rapidly in the United States, Europe, Canada and Australia. Notably, the TJX Companies opened 67 new stores, bringing the total number to 4,639 in the first quarter of fiscal 2022. In addition, the company increased its square footage by 1% year-over-year. ‘other during the quarter. Previously, the company had pointed out that it planned to incur capital expenditures in the range of $ 1.2 billion to $ 1.4 billion in fiscal year 2022. These expenses will likely be spent on opening new stores. , renovations, relocations as well as investments in its distribution network and infrastructure.
In addition, with an increasing number of consumers resorting to online shopping, The TJX Companies has undertaken several initiatives to boost online sales and strengthen its e-commerce business. We believe the TJX companies’ low-cost model, along with its strategic locations, impressive brands and fashion products, has the potential to boost performance, both in-store and online.
Notably, the shares of this company Zacks Rank # 3 (Hold) rose 4.1% in the last six months compared to industry5.8% growth.
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