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The TJX Companies (TJX) Up 20% in 3 Months, Will Momentum Stay?
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The TJX Companies, Inc. (TJX - Free Report) is gaining on its robust expansion in brick-and-mortar and online retail channels. As a leading off-price retailer, TJX is actively focused on accelerating its growth through effective marketing strategies. The company is committed to delivering attractive deals on popular brands and trendy fashion items to its customers.
Courtesy of these upsides, The TJX Companies began the fiscal 2025 on a strong note, with the first-quarter top and the bottom line increasing year over year and earnings surpassing the Zacks Consensus Estimate. The company witnessed comp sales growth across all segments, completely due to customer transactions, highlighting its solid value proposition. This performance bolsters management’s confidence in the ability to capture market share across all regions.
Shares of the Zacks Rank #3 (Hold) company have increased 20.1% in the past three months compared with the industry’s 12.6% growth. Let’s delve deeper.
Image Source: Zacks Investment Research
What’s Working in TJX’s Favor?
The TJX Companies is benefiting from its solid store and e-commerce growth efforts. The company has been rapidly expanding its footprint in the United States, Europe, Canada and Australia. During first-quarter fiscal 2025, the company added 18 new stores, ending the quarter with 4,972 stores. Looking ahead, management envisions the potential to expand its current retail banners by adding at least 1,300 more stores across these regions in the foreseeable future.
With an increasing number of consumers resorting to online shopping, TJX has undertaken several initiatives to boost online sales and strengthen its e-commerce business. The company intends to keep introducing new assortments in stores and online throughout the spring, summer and beyond.
The company is committed to boosting growth through effective marketing initiatives and loyalty programs. Incidentally, its aggressive marketing and advertising campaigns through multiple mediums have been adding growth. In the United States and Canada, it is leveraging the strengths of retail brand portfolios and multi-banner campaigns to drive efficiency and build awareness. The TJX Companies has been on track to attract new shoppers of every age to fuel growth. Also, its treasure hunt shopping experience is gaining traction among shoppers. Apart from this, its gift-giving initiatives, unique among off-price retailers and its loyalty card program have improved customer engagement.
Cost Hurdles
Over time, The TJX Companies has been dealing with the adverse impacts of the high cost of sales and operating expenses. In first-quarter fiscal 2025, its SG&A costs, as a percentage of sales, were 19.2%, up 0.2 percentage points. The increase was caused by incremental store wages and payroll costs. Cost of sales increased 4.4% to $8,739 million in the quarter. Management expects to see incremental store wage and payroll costs during the fiscal 2025.
Wrapping Up
Despite facing cost challenges, The TJX Companies, Inc. remains optimistic about its growth trajectory fueled by strong store and e-commerce expansions, effective marketing strategies, and enhanced customer engagement initiatives. Impressively, it expects a consolidated comparable store sales increase of 2-3% in second-quarter fiscal 2025. Management envisions fiscal second-quarter earnings per share in the range of 88-90 cents, reflecting year-over-year growth.
Top-Rated Retail Picks
Burlington Stores (BURL - Free Report) is a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories and merchandise for the home at everyday low prices. BURL has a trailing four-quarter earnings surprise of 21.7%, on average. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and earnings suggests growth of 9.5% and 25.4%, respectively, from year-ago reported numbers.
Costco Wholesale Corporation (COST - Free Report) holds a Zacks Rank #2 (Buy) at present. COST, which operates membership warehouse clubs, has a trailing four-quarter earnings surprise of 2.3%, on average.
The Zacks Consensus Estimate for Costco’s current fiscal-year sales and EPS suggests growth of 5.2% and 10.3%, respectively, from the year-ago reported figure.
Ross Stores (ROST - Free Report) , one of the largest off-price apparel and home fashion chains, currently carries a Zacks Rank #2. ROST has a trailing four-quarter earnings surprise of 10.6%, on average.
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings calls for growth of around 4.1% and 7.4%, respectively, from the year-ago reported numbers.
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The TJX Companies (TJX) Up 20% in 3 Months, Will Momentum Stay?
The TJX Companies, Inc. (TJX - Free Report) is gaining on its robust expansion in brick-and-mortar and online retail channels. As a leading off-price retailer, TJX is actively focused on accelerating its growth through effective marketing strategies. The company is committed to delivering attractive deals on popular brands and trendy fashion items to its customers.
Courtesy of these upsides, The TJX Companies began the fiscal 2025 on a strong note, with the first-quarter top and the bottom line increasing year over year and earnings surpassing the Zacks Consensus Estimate. The company witnessed comp sales growth across all segments, completely due to customer transactions, highlighting its solid value proposition. This performance bolsters management’s confidence in the ability to capture market share across all regions.
Shares of the Zacks Rank #3 (Hold) company have increased 20.1% in the past three months compared with the industry’s 12.6% growth. Let’s delve deeper.
Image Source: Zacks Investment Research
What’s Working in TJX’s Favor?
The TJX Companies is benefiting from its solid store and e-commerce growth efforts. The company has been rapidly expanding its footprint in the United States, Europe, Canada and Australia. During first-quarter fiscal 2025, the company added 18 new stores, ending the quarter with 4,972 stores. Looking ahead, management envisions the potential to expand its current retail banners by adding at least 1,300 more stores across these regions in the foreseeable future.
With an increasing number of consumers resorting to online shopping, TJX has undertaken several initiatives to boost online sales and strengthen its e-commerce business. The company intends to keep introducing new assortments in stores and online throughout the spring, summer and beyond.
The company is committed to boosting growth through effective marketing initiatives and loyalty programs. Incidentally, its aggressive marketing and advertising campaigns through multiple mediums have been adding growth. In the United States and Canada, it is leveraging the strengths of retail brand portfolios and multi-banner campaigns to drive efficiency and build awareness. The TJX Companies has been on track to attract new shoppers of every age to fuel growth. Also, its treasure hunt shopping experience is gaining traction among shoppers. Apart from this, its gift-giving initiatives, unique among off-price retailers and its loyalty card program have improved customer engagement.
Cost Hurdles
Over time, The TJX Companies has been dealing with the adverse impacts of the high cost of sales and operating expenses. In first-quarter fiscal 2025, its SG&A costs, as a percentage of sales, were 19.2%, up 0.2 percentage points. The increase was caused by incremental store wages and payroll costs. Cost of sales increased 4.4% to $8,739 million in the quarter. Management expects to see incremental store wage and payroll costs during the fiscal 2025.
Wrapping Up
Despite facing cost challenges, The TJX Companies, Inc. remains optimistic about its growth trajectory fueled by strong store and e-commerce expansions, effective marketing strategies, and enhanced customer engagement initiatives. Impressively, it expects a consolidated comparable store sales increase of 2-3% in second-quarter fiscal 2025. Management envisions fiscal second-quarter earnings per share in the range of 88-90 cents, reflecting year-over-year growth.
Top-Rated Retail Picks
Burlington Stores (BURL - Free Report) is a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories and merchandise for the home at everyday low prices. BURL has a trailing four-quarter earnings surprise of 21.7%, on average. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and earnings suggests growth of 9.5% and 25.4%, respectively, from year-ago reported numbers.
Costco Wholesale Corporation (COST - Free Report) holds a Zacks Rank #2 (Buy) at present. COST, which operates membership warehouse clubs, has a trailing four-quarter earnings surprise of 2.3%, on average.
The Zacks Consensus Estimate for Costco’s current fiscal-year sales and EPS suggests growth of 5.2% and 10.3%, respectively, from the year-ago reported figure.
Ross Stores (ROST - Free Report) , one of the largest off-price apparel and home fashion chains, currently carries a Zacks Rank #2. ROST has a trailing four-quarter earnings surprise of 10.6%, on average.
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings calls for growth of around 4.1% and 7.4%, respectively, from the year-ago reported numbers.