TJX Companies (NYSE:TJX) is better known for store brands that include TJ Maxx, Marshall's and HomeGoods. Due to solid, consistent growth performance, investors have gotten to know the stock well and have bid it up to its all-time highs. This could imperil future shareholder returns, but the firm's operations still have plenty of growth potential. For more, see Earning Forecasts: A Primer.

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Full Year Recap
Net sales improved 5.7% to $23.2 billion. Comparable store sales advanced 4%, consistent with the prior year's comp growth. This consisted of 5% same store sales growth in the flagship TJ Maxx and Marshall's domestic store base (76% of total sales), 6% comps at the HomeGoods chain that competes in the affordable home furnishings category with rivals including Pier 1 Imports (NYSE:PIR) and Big Lots (NYSE:BIG). International comps were more mixed, falling 1% in Canada (11.5% of total sales) and growing a modest 2% in Europe (12.5%).

Pre-tax income increased 11.4% to $2.4 billion, or just over 10% of total sales. This continues a trend whereby TJX has been able to leverage single digit top line growth into double-digit profit growth. Net income advanced at the same rate, rising to $1.5 billion. Share buybacks boosted the bottom line even further, with earnings per diluted share rising 17% to $1.93. Free cash flow condenses a bit, but was still strong at $1.1 billion, or approximately $1.44 per diluted share.

For the coming year, TJX said to expect earnings between $2.21 and $2.31 per diluted share, which it estimates will represent growth in a range of 11 to 16% from the core earnings for 2011. Analysts project sales growth just north of 7% and total sales of nearly $25 billion.

The Bottom Line
TJX has been a model of consistency. Over the past three, five and 10-year periods, sales have grown in the mid- to high-single digits and management has been able to leverage this into mid-teens annual average profit growth. Profit growth has been even more impressive over the past three years, rising more than 25% annually.

This is an impressive feat given management has done so during a decade that has seen two major recessions. Key rivals, including Nordstrom (NYSE:JWN) and Macy's (NYSE:M) have taken note and are fast rolling out outlet versions of its full line stores via Nordstrom Rack and Bloomingdales outlet locations. This could eventually eat into TJX's dominance, but likely won't hinder its growth prospects for several years.

The only thing not to like about TJX is its valuation. At a forward P/E of 14, the earnings multiple is at its highest level over the past five years. In contrast, Macy's is at a much more reasonable 10 times forward earnings. However, TJX can be relied on for growing profits at a steady rate. Macy's revival is more recent and calls into question its ability to grow at a brisk pace for the next decade. (For additional reading, check out 5 Must-Have Metrics For Value Investors.)

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At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.