Should You Invest in TJX?

PHOTO CREDIT: TJX

OVERVIEW

The TJX Companies Incorporation is a company based in the United States. The company operates over 4500 stores under the Marshalls, TJX, HomeGoods, and many others. In these stores, the company sells clothes, furniture, home goods, and others. The company was founded in 1956.

Why You Should?

1. TJX is a great reopening play in an investor’s portfolio. The company had to shut down or limit operations across all of its stores during this pandemic. However, once this pandemic is over, people will have more money to spend at TJX stores, which will be operating at normal levels. This will benefit the company and its investors.
2. Like other retail companies, e-commerce is a really good growth opportunity for the company as it will be able to capture younger consumers who prefer to shop online for furniture and clothes. This will benefit the company’s future growth and its investors.

Why You Should Not?

1. The company faces tough competition in the retail industry. Some of these competitors include Target, Walmart, Home Depot, Amazon, and many others. This competition has hurt the company in the past and might continue to hurt the company and its investors in the future.
2. TJX has had extremely weak e-commerce growth and still relies on most of its sales coming from a physical store. This slow development has hurt the company as they have had to shut down stores where there is a low demand for products. This has also hurt investors in the company as they have shifted capital to better retail companies.
3. In my opinion, there are other retail companies out there with better retail companies to invest in. Some of these companies include Walmart, Target, and Amazon. These companies all sell a wider range of more essential products than the ones that TJX offers. These companies also have better e-commerce platforms.
4. The COVID-19 pandemic has hurt the company in multiple ways. From having to close or limit operations at all of its stores in order to follow local regulation to having to deal with a weak e-commerce platform has hurt the company’s operations in 2020. This has hurt the company and its investors and will continue to do so until markets are back to normal.
5. The company has reported falling revenues and profits over the past couple of financial years due to the reasons mentioned above. This has caused the company to shut down many stores, lay off employees, and slowly develop its e-commerce platform. This has also hurt investors in the company. In the financial year of 2020, the company reported revenues of around 32.14 billion and profits of around 90 million. Both of these metrics are lower than what the company reported in the financial year of 2019 when they had revenues of around 41.72 billion and profits of around 3.27 billion.

PHOTO CREDIT: Yahoo Finance

MY OPINION

I do not think that TJX is the best investment option due to tough competition, negative impacts from the pandemic, better retailers to invest in at the moment, weak e-commerce growth, as well as falling revenues and profits. However, the company is a good reopening play and also has many e-commerce opportunities in the future.