By Kit Norton
TJX Cos. management isn't concerned with rising fuel and freight costs brought on by the Iran war, with the discount retailer officially raising its quarterly dividend by 13% to 48 cents a share.
Slightly more than a month after TJX, on Feb. 25, said it expected to raise its quarterly dividend by 13% for fiscal 2027 and institute a new share repurchase program of about $2.50 billion to $2.75 billion, the company announced Monday its board approved the dividend increase and continues to plan on the stock buyback.
"These actions underscore our confidence in our ability to continue to increase sales, drive profitability, and deliver strong cash flow, allowing us to reinvest in the growth of TJX while simultaneously returning significant value to our shareholders," TJX CEO Ernie Herrman said in the press release.
The quarterly dividend increase, which raises the payout from 42.5 cents and takes effect on June 4 to shareholders of record as of May 14, is in line with TJX's dividend hikes in recent years. The company also signaled on Feb. 25 the increase would come when it announced fiscal fourth-quarter earnings. However, that was before the start of the U.S. and Israel-led war with Iran, which blanketed the market with uncertainty.
Bank of America analysts on Friday wrote that as the war in Iran drives up fuel and freight costs, TJX, the parent of TJ Maxx and Marshalls, could actually benefit. With TJX's focus on selling clearance items, the company could get a potential boost as vendors trim excess inventory amid elevated shipping costs and delays.
"If supply chain congestion or higher airfreight costs lead to delayed or abandoned products, this would likely create increased closeout availability," Bank of American analysts, led by Lorraine Hutchinson, wrote.
The analysts also noted that TJX, and other bargain retailers, are using higher Average Unit Retail, or AUR, gains to offset margin pressure. The price adjustments allow retailers to ship and distribute fewer units for every dollar of sales, creating a structural hedge against rising transport overheads.
More broadly, while some investors may be worried that higher oil prices will curtail consumer-discretionary spending, that's likely only if consumers face sustained high prices at the pump.
TJX stock rose 0.9% to $156.50 on Monday, rebounding off its 50-day moving average after closing just below that level on Friday. The 50-day moving average is currently right around $155.40. The S&P 500 fell 0.24% and the Dow Jones Industrial Average gained 0.2% Monday.
As of Friday's close, TJX shares have declined 4% since the Iran war began. The stock is also down 4.6% from its record high from Feb. 25 of $162.68.
The company has been one of retail's strongest performers in recent years, benefiting from bargain-hunting shoppers.
Write to Kit Norton at kit.norton@barrons.com
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(END) Dow Jones Newswires
March 30, 2026 13:57 ET (17:57 GMT)
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