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:
| 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.
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