Business Strategy and Outlook
| Zain Akbari, CFA |Despite store closures, inflation, freight and labor challenges, and an uncertain path to normalcy, we believe TJX and the rest of the off-price sector are better suited than most retailers to endure disruption from the pandemic and an unsettled economy, with potential for improved merchandise availability as supply chain dislocations and shifting spending patterns upset full-price stores’ merchandise orders. Store closures affected TJX’s operations outside the United States in fiscal 2022, and the emergence of new strains of the coronavirus could elongate the crisis. However, we still believe TJX and its peers benefit from durable advantages over full-price apparel and home décor sellers, with strong brands, store experiences, and scale working to keep returns on invested capital high (roughly 30% average over the next decade).