TJX continues its amazing winning streak

It’s a record that most retailers are envious of, particularly in today’s competitive and disrupted marketplace.



TJX Cos. on Wednesday posted its 21st consecutive year of same-store sales increases, as well as better-than-expected income and revenue results for its fourth quarter. The off-price retailer also raised its quarterly dividend and announced a share repurchase program.(On its quarterly conference call, the company disclosed its plans to launch a new store banner.)



For the fourth quarter, TJX’s net income rose to $678 million, or $1.03 per share, from $666.5 million, or 99 cents per share, a year earlier.



Net sales for the quarter increased 6% to $9.5 billion. Same-store sales rose 3% amid strong customer traffic.



For the full year (ending January 28, 2017), TJX’s net sales rose 7% to $33.2 billion. Same-store sales rose 5%.



Net income for the fiscal year was $2.3 billion and diluted earnings per share were $3.46, a 4% increase over last year’s $3.33.

TJX increased its store count by 198 stores in 2016.



“The year 2016 was another terrific year for TJX,” stated CEO Ernie Herrman. "We were particularly pleased that customer traffic was the primary driver of our comp increases at every major division, which tells us that our eclectic merchandise mix and amazing values continue to resonate with consumers across our geographies. Once again, comp sales were driven by customer traffic and our merchandise margin was up.”



Neil Saunders, managing director of GlobalData Retail, noted that TJX’s size and scale, and its “highly impressive” buying and merchandising operation, give it a major advantage in acquiring the best product selections and also in ensuring merchandise is distributed efficiently and effectively to its stores.



“In our view, this operational excellence is extremely difficult to emulate and is, in essence, the ’secret sauce’ of TJX’s success,” Saunders said. “It is also one of the reasons why TJX has been able to steadily improve its product margins and profitability over a long period of time.”



The chain said it would raise its dividend by 20% and repurchase $1.3 billion to $1.8 billion worth of shares during the fiscal year ending Feb. 3, 2018.



“Our business continues to generate tremendous amounts of cash and deliver strong financial returns,” Herrman said. “In fiscal 2018, we plan to continue investing to support our growth while distributing cash to our shareholders. Our capital spending plans include investing in new stores, store remodels, and our supply chain and infrastructure.”



As of January 28, 2017, TJX operated a total of 3,812 stores in nine countries (United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia) and three e-commerce sites.