TJX Companies (TJX) stock is trading higher Wednesday after the off-brand retailer beat top- and bottom-line expectations for its fiscal second quarter and raised its full-year outlook.
In the 13 weeks ended August 3, TJX's revenue increased 5.6% year-over-year to $13.5 billion, driven by comparable-store sales growth across all its brands and geographies. This included 5% combined domestic growth at TJ Maxx, Marshalls and Sierra. Its earnings per share (EPS) increased 12.9% from the year-ago period to 96 cents.
"I am extremely pleased with our second-quarter performance. Our comparable store sales increase of 4%, pretax profit margin, and earnings per share all exceeded our plans," said TJX CEO Ernie Herrman in a statement. "Our overall comparable-sales growth was entirely driven by customer transactions, which increased at every division."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results topped analysts' expectations. Wall Street was anticipating revenue of $13.3 billion and earnings of 92 cents per share, according to Yahoo Finance.
"With our strong second-quarter results, we are raising our full-year guidance for both pretax profit margin and earnings per share," Herrman said, adding that "the third quarter is off to a strong start."
Here's what TJX now expects to accomplish versus its previous forecasts:
| Metric | New outlook | Previous outlook |
|---|---|---|
| Comparable-store sales | Approximately 3% | 2% to 3% |
| Pre-tax profit margin | Approximately 11.2% | 11% to 11.1% |
| EPS | $4.09 to $4.13 | $4.03 to $4.09 |
For the third quarter, TJX said it anticipates comparable-store sales growth in the range of 2% to 3% and earnings per share in the range of $1.06 to $1.08, which comes up just shy of the $1.10 per share analysts are expecting.
Is TJX stock a buy, sell or hold?
TJX has had a standout year on the charts, up 28% on a total return basis (price change plus dividends). Unsurprisingly, Wall Street is bullish on the consumer discretionary stock.
Of the 25 analysts covering TJX tracked by S&P Global Market Intelligence, 16 have it at Strong, Buy, five call it a Buy, three say it's a Hold and one has it at Sell. This works out to a consensus Buy recommendation and with strong conviction.
Speaking for the bulls is Jefferies analyst Corey Tarlowe, who has a Buy rating and $130 price target on the retail stock. "TJX should benefit from secular migration towards the off-price sector, which should bounce back more quickly and strongly than other retail sectors," Tarlowe writes in a note to clients. "Home and international expansion are unique growth opportunities."
However, not all analysts are bullish on TJX. Financial services firm CFRA Research rates TJX stock a Sell with a $100 price target. The stock is trading at 36 times fiscal 2026 earnings estimates, which is expensive for this top retailer, says CFRA Research analyst Zachary Warring.
CFRA's $100 price target represents a discount of 17% to current levels.
Related Content
-
Being an Executor is a Thankless Job: Do It Well AnywayYou can be a "good" executor of an estate, even though carrying out someone's final wishes can be challenging.
-
Question: Are You Planning for a 20- or 30-Year Retirement?You probably should be planning for a much longer retirement than you are. To avoid running out of retirement savings, you really need to make a plan.
-
How to Steer Clear of the Medicare Tax TorpedoBetter beware, because if you go even $1 over an important income threshold, your Medicare premiums could rise exponentially due to IRMAA surcharges.
-
Quick Question: Are You Planning for a 20-Year Retirement or a 30-Year Retirement?
You probably should be planning for a much longer retirement than you are. To avoid running out of retirement savings, you really need to make a plan.
-
Don't Get Caught by the Medicare Tax Torpedo: A Retirement Expert's Tips to Steer Clear
Better beware, because if you go even $1 over an important income threshold, your Medicare premiums could rise exponentially due to IRMAA surcharges.
-
I'm an Insurance Pro: Going Without Life Insurance Is Like Driving Without a Seat Belt Because You Don't Plan to CrashLife insurance is that boring-but-crucial thing you really need to get now so that your family doesn't have to launch a GoFundMe when you're gone.
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
I'm a Tax Attorney: These Are the Year-End Tax Moves You Can't Afford to MissDon't miss out on this prime time to maximize contributions to your retirement accounts, do Roth conversions and capture investment gains.
-
I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement IncomeSpreading savings across three "tax buckets" — pretax, Roth and taxable — can help give retirees the flexibility to control when and how much taxes they pay.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
Could an Annuity Be Your Retirement Safety Net? 4 Key ConsiderationsMore people are considering annuities to achieve tax-deferred growth and guaranteed income, but deciding if they are right for you depends on these key factors.
