We're boosting our price target on retail stock TJX after another knockout quarter

CNBC Finance

4 min read

Shares of TJX Companies were flat on Wednesday despite the off-price retailer delivering another fantastic quarterly report. Conservative guidance, while unsurprising, is likely to blame. Revenue in the three months ended Jan. 31 increased 8.5% year over year to $17.7 billion, exceeding the consensus estimate of $17.4 billion, according to LSEG. Earnings per share (EPS) hit $1.58, exceeding expectations of $1.23, LSEG data showed. Same-store sales increased 5%, beating the Street's 3.7% estimate, according to FactSet. TJX 1Y mountain TJX 1-year return Bottom line TJX proved once again that its business model â acquiring excess inventory from high-quality brands and retailers to sell at a discount â is working, as increasingly cost-conscious shoppers put a premium on value. The company posted better-than-expected results in each of its four operating segments â Marmaxx, HomeGoods, TJX Canada, and TJX International (Europe & Australia)â for the fourth straight quarter. The company's annual sales topped $60 billion for the first time. Same-store sales, which TJX defines as sales at locations or e-commerce sites that have been in operation for at least 2 consecutive fiscal years, held steady at 5%, well above the 3.7% consenus analyst estimate. Same-store sales accelerated sequentially at HomeGoods (5% to 6%) and TJX International (3% to 4%). They decelerated at Marmaxx (6% to 5%) and TJX Canada (8% to 7%), but were still impressive. On the earnings call with investors, CFO John Klinger said the first (current) quarter results were trending higher before the winter storms that hit much of North America, but picked back up after the storms passed. The company also noted that the availability of quality merchandise remains "outstanding." The company's guidance for the quarter and full year was below analysts' estimates, but management is well known for underpromising and overdelivering on projections at the beginning of the year. Why we own it The owner of T.J. Maxx, Marshalls, and HomeGoods is well-suited to the current economic environment, offering inflation-weary customers a wide range of merchandise at compelling prices and an in-person "treasure hunt" shopping experience. It is also better suited to respond to tariffs than retailers that import most of their merchandise directly. Competitors : Ross Stores and Burlington Stores Last buy : July 21, 2025 Initiation : Aug. 24, 2022 We were also pleased with the EPS results, even after stripping out the one-time 15-cent-per-share benefit from litigation settlement and related expenses; excluding that addition, EPS was $1.43, well above the $1.23 estimate. That was driven by healthy gross margin expansion and lower-than-expected SG & A expense, which helped deliver a 26.5% year-over-year increase in pre-tax income. As a result of another excellent quarter, we are reiterating our 1 rating and increasing our price target to $180 from $160. Guidance * Management's expectation for the fiscal first quarter of 2027: Sales for the third quarter are expected to be between $13.8 and $13.9 billion, below the $14.93 billion expected. Same-store sales in the range of 2% to 3% growth, below the 3.8% consensus. Pretax profit margin in the range of 10.3% to 10.4%, below the 11% estimate. Earnings per share (EPS) in the range of 97 cents to 99 cents, below the consensus EPS estimate of $1.02 per share. For fiscal 2027: Sales of $62.7 to $63.3 billion, below the $63.59 billion expected. Same-store sales are expected to rise 2% to 3%, below the 3.6% estimate. Pretax profit margin of 11.7% to 11.8%, below the estimate of 12.1%. EPS of $4.93 to $5.02, below the $5.18 per share expected. * Estimates are provided by FactSet, except sales and earnings, which are provided by LSEG. (Jim Cramer's Charitable Trust is long TJX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has discussed a stock on CNBC, he waits 72 hours after issuing a trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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We're boosting our price target on retail stock TJX after another knockout quarter

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