In today’s market, it is a tough time to be in the retail business. Many well-known retail stores are closing more and more of their stores, as they fight to keep up with the competition of online shopping. While the traditional department stores are struggling, off-price retailers are managing to keep afloat in this unpredictable market.
Off-price retailers, or discount retailers, are stores that sell high quality products for relatively low or discounted prices. They are stores like TJ Maxx, Marshalls, and Burlington. The market isn’t just bad for businesses, but for consumers as well. Consumers want name-brand, high-end products at affordable prices. Unlike department stores, who are selling those products at full marked up prices, off-price retailers are selling things that consumers want, at prices they are willing to pay.
Over the past few years, department stores like JCPenny, Macys, and Sears have been facing a lot of downward trends in sales. The off-price retailers have been dealing with the opposite, with their sales increasing rather rapidly. Sales for the discount retailers have even been projected to continue growing. Even Amazon is fighting to compete, with a clothing pricing model that more closely resembles that of your traditional department store.
TJX specifically is considered possible the safest retail stock right now. Their revenues came in at $25 billion, which was also up by 5%, with a total net income of $1.7 billion. Their EPS was $2.67, at a 6% increase compared to last year’s number at $2.51. TJX stock is a global company with over 3,800 stores in 9 countries. It is made up of TJ Maxx, Marmaxx, HomeGoods stores. Throughout their different stores, the company sells apparel, footwear, accessories (including name-brand purses), home decor, accent furniture, and jewelry. They are the type of stores you walk into with the intention of buying one thing, but walking out with things you didn’t even think you needed, which is exactly why they’re so successful right now. While purchasing retail stock is quite risky overall, TJX might be a stock option to look into.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.