TJX Stock Pops After Earnings Show Consumers Crave Value

The outside of a TJX-owned TJ Maxx — (Image credit: Eva Marie Uzcategui/Bloomberg via Getty Images)

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."

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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:

Swipe to scroll horizontally

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.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.