Tjx Companies


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Tjx Companies

  1. 1. TJX Companies Analyst: Ryan Shontz 10/12/04
  2. 2. Company Profile <ul><li>The leading off-price retailer of apparel and home fashions in the United States and worldwide </li></ul><ul><li>7 segments, 8 stores, and 2062 points of sale </li></ul><ul><ul><li>Marmaxx-T.J. Maxx & Marshals </li></ul></ul><ul><ul><li>A.J. Wright </li></ul></ul><ul><ul><li>Homegoods </li></ul></ul><ul><ul><li>Bob’s Stores </li></ul></ul><ul><ul><li>T.K. Maxx </li></ul></ul><ul><ul><li>Winners </li></ul></ul><ul><ul><li>HomeSense </li></ul></ul>
  3. 3. Products <ul><li>TJX Companies' major products include womenswear, menswear, childrenswear, homewear, gifts, lingerie </li></ul><ul><li>Also offer shoes, fine jewelry, and accessories at select Marmaxx and Winners locations </li></ul><ul><li>The Homegoods and Homesense segments offer giftware, accent furniture, lamps, rugs, accessories, and seasonal merchandise for the home </li></ul><ul><li>Bob’s Stores offers family apparel and footwear with emphasis on men's clothing, footwear, workwear, activewear, and licensed team apparel. </li></ul>
  4. 4. Key Facts <ul><li>TJX opened its first store in 1977 in Worcester and Auburn, Massachusetts. </li></ul><ul><li>In 1995, TJX acquired its biggest competitor, Marshalls </li></ul><ul><li>Recent developments </li></ul><ul><ul><li>In 1999 TJX Companies launched AJ Wright in the US, and TK Maxx, the European version of T.J. Maxx. </li></ul></ul><ul><li>T.J. Maxx opened an official company website in November 1999. </li></ul><ul><li>The company purchased the assets of Bob’s stores, worth $100 million, in October 2003. </li></ul>
  5. 5. Top Competitors <ul><li>Kohl’s Corp. (KSS) J.C. Penny Companies Inc. (JCP), Sears Roebuck (S), Limited Brands (LTD), Target Corp. (TGT), Federated Department Stores (FD), May Department Stores (MAY), Saks Inc. (SKS), Wal-Mart Stores, Inc. (WMT), Burlington Coat Factory (BCF), Ross Stores, Inc. (ROST), Dillard’s Inc. (DDS) </li></ul><ul><li>Competitive Advantages </li></ul><ul><ul><li>Cost Advantages- Buy left over products at huge discounts. Also buy products overseas. The company’s stores focus more on functionality rather than appeal, which in turn has enabled the company to keep its costs down. </li></ul></ul><ul><ul><li>Barriers to entry- TJX Companies core business model for off-price retailing of apparel simply is the best. Over the past several years no other company has been able to mimick the success TJX Companies in the market for off-price retailing of apparel. </li></ul></ul>
  6. 6. Swot Analysis   E-commerce Lack of geographical expansion strategy Homegoods format- tremedous growth opportunities Competition from other off-price chains and online stores Exploring European market Tough economic conditions Off-price channel- TJX's forte Threats Opportunities   Efficient inventory management the key to success   Group synergy Marmaxx Segment only major contributor Strong and consistent revenue growth Over dependence on the U.S. market Dominating position in the market with strong network Weaknesses Strengths
  7. 7. Pros and Cons <ul><li>Pros </li></ul><ul><ul><li>Unique inventory management </li></ul></ul><ul><ul><ul><li>TJX has in place information systems </li></ul></ul></ul><ul><ul><li>Core business model </li></ul></ul><ul><ul><li>Recent trends indicate that consumers have been unwilling to pay full prices at mallbased department stores that are located in inconvenient locations </li></ul></ul><ul><ul><li>Low operating cost structure </li></ul></ul>
  8. 8. Pros and Cons <ul><li>Cons </li></ul><ul><ul><li>85% of revenues derived from U.S markets </li></ul></ul><ul><ul><li>Marmaxx segment accounted for nearly 75% of company’s total revenue FY Ended 2004 </li></ul></ul><ul><ul><li>Consumer Cyclical Sector reaching all time high in EPS </li></ul></ul>
  9. 9. Recent News <ul><li>9/9/04 The TJX Companies, Inc. today announced the declaration of a regular quarterly dividend on its common stock at the quarterly rate of $.045 per share payable December 2, 2004, to shareholders of record on November 11, 2004. </li></ul><ul><li>9/15/04 T.J. Maxx Announces Sponsorship for T.J. Maxx 2004 Tour of Gymnastics Champions. The 2004 tour will continue T.J. Maxx's and USA Gymnastics' long-standing relationship with Special Olympics of America by featuring Team T.J. Maxx Special Olympic athletes in all but one of the performances nationwide. </li></ul><ul><li>9/23/04 TJX Cos. launched Web sites for its T.J. Maxx and HomeGoods stores Thursday that allow customers to buy merchandise online. </li></ul><ul><li>10/7/04 For the 35 weeks ended October 2, 2004, sales reached $9.3 billion, a 14% increase over last year's $8.2 billion. </li></ul><ul><li>10/7/04 Same-store sales (stores open at least a year) rose just 1 percent in September as hurricanes hit the U.S. Southeast. </li></ul>
  10. 10. Analyst Recommendation <ul><li>Hold </li></ul>