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TJX Companies Is Ready to Restart Its Dividend

TJX Companies (NYSE: TJX) is on the mend. The off-price retailer announced third-quarter results on Wednesday that were highlighted by strong sales and earnings metrics. The business isn't yet fully recovered from the pandemic, but management is optimistic that a complete financial rebound and a resumed dividend payment are imminent.

Third-quarter sales fell 5%, which was better than executives' forecast. Its core T.J. Maxx and Marshalls brands shrank, but the HomeGoods franchise notched surging growth thanks to high demand for home furnishings.

Image source: Getty Images.

The trends have management feeling confident in their broader rebound, with the next test coming in the key holiday shopping period.

Looking further out, TJX says it plans to restart its dividend at a higher payout by the end of the fourth quarter. The retailer had been on track to join the Dividend Aristocrat club after boosting its dividend for 23 consecutive years. But that streak was threatened after pandemic-related closures forced a payout pause in early 2020.

The good news is the company achieved positive cash flow and earnings in the third quarter. But TJX Companies still has lots of lost ground to cover as it has posted $235 million in net losses so far this year compared with $2.3 billion in gains in the prior-year period.

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Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends The TJX Companies. The Motley Fool has a disclosure policy.


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