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If you've been following the headlines, you know that share buybacks are way, way, way down over past years. Just last week, Standard & Poor's reported that stock buybacks by companies in the S.& P. 500 fell to $24.2 billion in the second quarter of 2009. That was down 28%from the first quarter and was a mind-blowing 72% below the figure for the same quarter of 2008.Of course the irony is that by backing up the truck to buy back shares in past years, companies depleted the cash they could have used to buy back stock now -- when their share prices are a lot lower.
But of course there are a handful of well-managed companies that have preserved their balance sheet strength. TJX Cos. Inc. (NYSE: TJX), the parent company of brands including TJ Maxx, Marshalls, and HomeGoods, announced today that it plans to spend $625 million repurchasing its own stock in the fiscal year 2010, and the board authorized up to $1 billion in repurchases. That's on top of the $367 million remaining available on a previously authorized buyback plan.
CEO Carol Meyrowitz, President commented in the press release that "This new authorization reflects our confidence in continuing to deliver significant growth in sales, earnings and cash flow, even in this difficult economic environment. TJX remains financially strong, with significant liquidity and a strong credit rating, as well as a business model that generates substantial amounts of excess cash."
The only problem is that this latest buyback doesn't exactly take advantage of a weak stock market: Shares of TJX hit an all-time high today.
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