Company Overview - TJX's stock closed at $123.42, reflecting a -0.33% change from the previous trading day, underperforming the S&P 500 which gained 0.24% [1] - Over the past month, TJX's stock has increased by 0.43%, lagging behind the Retail-Wholesale sector's gain of 5.98% and the S&P 500's gain of 2.37% [1] Upcoming Financial Results - TJX is set to announce its earnings on February 26, 2025, with an expected EPS of $1.15, indicating a 2.68% growth compared to the same quarter last year [2] - The consensus estimate for quarterly revenue is $16.19 billion, which represents a decline of 1.34% from the previous year [2] Analyst Estimates and Confidence - Recent changes to analyst estimates for TJX reflect short-term business trends, with positive revisions indicating analysts' confidence in the company's performance [3] - The Zacks Rank system, which incorporates these estimate changes, currently ranks TJX as 2 (Buy), suggesting a favorable outlook [5] Valuation Metrics - TJX has a Forward P/E ratio of 27.04, which is a premium compared to the industry's average Forward P/E of 19.02 [6] - The company has a PEG ratio of 2.76, higher than the Retail - Discount Stores industry's average PEG ratio of 2.08 [7] Industry Context - The Retail - Discount Stores industry is part of the Retail-Wholesale sector and holds a Zacks Industry Rank of 31, placing it in the top 13% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Explore the exciting world of The TJX Companies (TJX 1.46%) with our expert analysts in this Motley Fool Scoreboard episode. Check out the video below to gain valuable insights into market trends and potential investment opportunities!*Stock prices used were the prices of Dec. 18, 2024. The video was published on Feb. 13, 2025. ...

Company Performance - TJX closed at $124.97, reflecting a +0.22% change from the previous day, which is lower than the S&P 500's gain of 0.67% [1] - Over the past month, TJX shares have increased by 3.86%, while the Retail-Wholesale sector and S&P 500 have gained 7.15% and 2.07%, respectively [1] Earnings Expectations - Analysts anticipate TJX to report earnings of $1.15 per share, indicating a year-over-year growth of 2.68% [2] - The consensus estimate for revenue is $16.19 billion, which represents a decline of 1.34% compared to the same quarter last year [2] Analyst Sentiment - Recent changes in analyst estimates for TJX suggest a positive outlook, reflecting optimism about the company's business and profitability [3] Valuation Metrics - TJX has a Forward P/E ratio of 27.23, which is higher than the industry average of 19.36 [6] - The company also has a PEG ratio of 2.78, compared to the Retail - Discount Stores industry's average PEG ratio of 2.08 [6] Industry Context - The Retail - Discount Stores industry is part of the Retail-Wholesale sector and holds a Zacks Industry Rank of 66, placing it in the top 27% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - Brokerage recommendations, particularly for TJX, suggest a strong buy sentiment, but reliance solely on these recommendations may not be prudent due to potential biases and misalignment with retail investors' interests [2][4][9]. Brokerage Recommendations for TJX - TJX has an average brokerage recommendation (ABR) of 1.26, indicating a consensus between Strong Buy and Buy, with 20 out of 23 recommendations classified as Strong Buy, representing 87% [2]. - Despite the favorable ABR, studies indicate that brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation potential [4][5]. Comparison with Zacks Rank - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, showing a strong correlation with near-term stock price movements [7][10]. - The ABR is calculated solely from brokerage recommendations and may not be up-to-date, while Zacks Rank reflects timely earnings estimate revisions, making it a more reliable indicator for future price movements [8][11]. Current Earnings Estimates for TJX - The Zacks Consensus Estimate for TJX remains unchanged at $4.18 for the current year, indicating steady analyst views on the company's earnings prospects [12]. - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for TJX, suggesting caution despite the Buy-equivalent ABR [13].

Core Insights - The TJX Companies, Inc. has shown strong stock performance with a 26.2% increase over the past year, outperforming the industry growth of 21.6% [1] - The company's success is attributed to its commitment to exceptional shopping experiences and unmatched value for customers [1][3] - Effective cost control measures have enhanced profitability, with a pre-tax profit margin of 12.3%, reflecting a 30-basis-point increase [4] Sales Performance - TJX reported a solid comparable store sales increase of 3% in the third quarter of fiscal 2025, reaching the upper end of its forecast [3] - Comparable store sales growth was 2% at Marmaxx, 3% at HomeGoods, 2% at TJX Canada, and 7% at TJX International [3] Cost Management - The company achieved a 50-basis-point expansion in gross margin due to higher merchandise margins, showcasing operational efficiency [4] - Cost-saving measures and an increase in net interest income contributed to the improved profit margins [4] Expansion Strategy - TJX plans to open 1,200 new stores across its current markets, expanding its retail footprint of over 5,000 stores [6] - The company is entering the Spanish market with plans to open T.K. Maxx stores by early 2026 and is investing in high-growth regions like Mexico, the UAE, and Saudi Arabia [6] E-commerce Growth - With the rise in online shopping, TJX is implementing initiatives to enhance online sales and strengthen its e-commerce business [6] Competitive Position - The off-price retail model continues to provide TJX with a competitive edge, positioning the company to capture a larger share of the growing off-price retail sector [8] - The company's focus on consumer demand and a flexible business model ensures its ability to thrive in a competitive retail landscape [8]

Company Performance - TJX's stock closed at $121.65, reflecting a +1.26% increase compared to the previous day, outperforming the S&P 500's gain of 0.16% [1] - Over the past month, TJX shares have decreased by 5.55%, which is worse than the Retail-Wholesale sector's decline of 4.84% and the S&P 500's drop of 2.8% [1] Upcoming Financial Results - TJX is expected to report an EPS of $1.15, representing a 2.68% increase year-over-year, with quarterly revenue anticipated at $16.19 billion, down 1.34% from the previous year [2] - Full-year estimates project earnings of $4.18 per share and revenue of $56.2 billion, indicating year-over-year growth of +11.17% and +3.65%, respectively [3] Analyst Estimates and Valuation - Recent changes in analyst estimates for TJX suggest positive sentiment regarding the company's business operations and profit generation capabilities [4] - The Zacks Rank for TJX is currently 2 (Buy), with a Forward P/E ratio of 28.75, which is higher than the industry average of 21.01 [6] - TJX has a PEG ratio of 2.94, compared to the industry average of 2.39, indicating a higher expected earnings growth trajectory [7] Industry Context - The Retail - Discount Stores industry, to which TJX belongs, ranks in the bottom 38% of all industries according to the Zacks Industry Rank [7] - The Zacks Industry Rank is based on the average Zacks Rank of individual stocks, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Core Insights - The TJX Companies, Inc. has demonstrated strong growth through its off-price retail model and commitment to customer value, despite facing challenges from rising costs [1][8] Group 1: Growth Strategy - TJX has achieved a comparable store sales increase of 3% in Q3 of fiscal 2025, with notable growth across various segments: 2% at Marmaxx, 3% at HomeGoods, 2% at TJX Canada, and 7% at TJX International [2] - The company added 56 stores in Q3 of fiscal 2025, bringing the total to 5,057 stores, with plans to open an additional 1,200 stores across its markets [5] Group 2: Profitability and Cost Control - TJX reported a pre-tax profit margin of 12.3%, reflecting a 30-basis-point increase, driven by cost-saving measures and an increase in net interest income [3] - Selling, general and administrative expenses as a percentage of sales increased by 10 basis points to 19.5% in Q3 of fiscal 2025, indicating rising operational costs [7] Group 3: E-commerce and Market Expansion - The company is enhancing its e-commerce capabilities to capture a larger share of the growing off-price retail sector, leveraging its expertise in offering high-quality branded merchandise [6] - TJX is strategically expanding into Spain and investing in high-growth regions such as Mexico, the UAE, and Saudi Arabia [5] Group 4: Challenges Ahead - Rising operational costs, particularly in store wages and payroll, pose a risk to profitability, with expectations of continued margin pressure in upcoming quarters [7][8]

Brokerage Recommendations and Zacks Rank - Brokerage firms tend to have a strong positive bias in their stock recommendations, with five "Strong Buy" recommendations for every "Strong Sell" recommendation [3] - The Average Brokerage Recommendation (ABR) for TJX is 1.26, which approximates between Strong Buy and Buy, based on 23 brokerage firms' recommendations [10] - 87% of the 23 recommendations for TJX are Strong Buy, representing the majority of the ABR [18] Earnings Estimate Revisions and Zacks Rank - Earnings estimate revisions are at the core of the Zacks Rank, showing a strong correlation with near-term stock price movements [2] - The Zacks Consensus Estimate for TJX's current year earnings has remained unchanged at $4.18 over the past month [8] - TJX currently holds a Zacks Rank 3 (Hold), influenced by the unchanged consensus estimate and other earnings-related factors [9] Differences Between ABR and Zacks Rank - The ABR is based solely on brokerage recommendations and is displayed in decimals, while the Zacks Rank is a quantitative model based on earnings estimate revisions and displayed in whole numbers [12] - The Zacks Rank is always timely due to continuous revisions by brokerage analysts, whereas the ABR may not be up-to-date [7] - The Zacks Rank maintains a balanced distribution across its five ranks, applied proportionately to all stocks with current-year earnings estimates [13] Investment Considerations for TJX - Analysts' steady views on TJX's earnings prospects, indicated by an unchanged consensus estimate, suggest the stock may perform in line with the broader market in the near term [14] - While the ABR suggests buying TJX, relying solely on brokerage recommendations may not be advisable due to their limited success in guiding investors toward stocks with price appreciation potential [11] - Validating the Zacks Rank with the ABR could be a more reliable approach for making profitable investment decisions [16]

Valuation and Market Position - The TJX Companies, Inc. (TJX) stock is trading at a forward P/E ratio of 27.34, which is a 13.8% discount compared to the Zacks Retail - Discount Stores' average of 31.71, indicating that TJX stock appears undervalued [1] - TJX's stock closed at $123.06, 3.9% below its 52-week high of $128, and has shown strong performance with a 34.8% increase over the past year, outperforming the industry growth of 27.7% [5] Growth Strategy and Performance - TJX is focused on delivering exceptional shopping experiences and unmatched value, evidenced by a 3% increase in comparable store sales in Q3 of fiscal 2025, driven by strong customer transactions [8] - The company aims to expand its retail footprint by adding 1,200 stores and is making strategic moves into new markets, including Spain, Mexico, the UAE, and Saudi Arabia [11] Financial Metrics and Profitability - TJX achieved a pre-tax profit margin of 12.3%, a 30-basis point increase, and a 50 basis point expansion in gross margin due to higher merchandise margins, showcasing operational efficiency [9] - For fiscal 2025, TJX forecasts a 3% increase in consolidated comparable store sales and has raised its pretax profit margin outlook to 11.3%, with EPS guidance increased to a range of $4.15-$4.17 [14] Analyst Sentiment and Future Expectations - Analysts have shown optimism with rising annual earnings estimates for TJX, with the Zacks Consensus Estimate for fiscal 2025 earnings at $4.18 per share, indicating an 11.2% year-over-year growth [15] - The company reported a strong start to Q4 fiscal 2025 and is optimistic about the holiday season, expecting comparable store sales to increase by 2% to 3% [13] Challenges and Competitive Landscape - TJX faces challenges such as rising store wage and payroll costs, which have increased SG&A expenses to 19.5% of sales, potentially impacting margins [17] - The company is also contending with a negative impact on gross margin from shrink accruals and increasing competition from major retailers like Target Corporation [18]

Financial Performance - Net sales for the third quarter of fiscal 2025 increased by 6% to $14.1 billion compared to $13.3 billion in the same quarter last year[86]. - Consolidated comparable store sales rose by 3% for the third quarter of fiscal 2025, driven by an increase in customer transactions[92]. - Diluted earnings per share for the third quarter of fiscal 2025 were $1.14, up from $1.03 in the same quarter of fiscal 2024[86]. - Net income for Q3 fiscal 2025 was $1.3 billion, or $1.14 per diluted share, compared to $1.2 billion, or $1.03 per diluted share in Q3 fiscal 2024[106]. - For the first nine months of fiscal 2025, net income was $3.5 billion, or $3.03 per diluted share, compared to $3.1 billion, or $2.65 per diluted share in the same period last year[106]. Profit Margins - The pre-tax profit margin for the third quarter of fiscal 2025 was 12.3%, a 0.3 percentage point increase from 12.0% in the prior year[86]. - The cost of sales ratio decreased to 68.4% for the third quarter of fiscal 2025, down from 68.9% in the same quarter last year[100]. - SG&A expenses as a percentage of net sales were 19.5% for the third quarter of fiscal 2025, an increase of 0.1 percentage points compared to the prior year[103]. - Segment profit margin for Marmaxx improved to 14.3% in Q3 fiscal 2025 from 14.0% in Q3 fiscal 2024, driven by higher merchandise margin[113]. - HomeGoods segment profit margin increased to 12.3% in Q3 fiscal 2025 from 10.3% in Q3 fiscal 2024, primarily due to the closure of its e-commerce business[117]. - TJX Canada segment profit margin decreased to 15.1% in Q3 fiscal 2025 from 16.9% in Q3 fiscal 2024, impacted by lower merchandise margin and increased costs[122]. - Segment profit margin increased to 7.3% in Q3 FY2025 from 5.4% in Q3 FY2024, attributed to favorable occupancy costs and expense leverage on higher comp store sales[126]. Sales by Segment - Marmaxx segment net sales increased by 4% to $8.4 billion in Q3 fiscal 2025, driven by a 2% increase in comp store sales[111]. - HomeGoods segment net sales reached $2.4 billion in Q3 fiscal 2025, reflecting a 7% increase compared to $2.2 billion in Q3 fiscal 2024[116]. - TJX Canada net sales were $1.4 billion in Q3 fiscal 2025, a 5% increase from $1.3 billion in Q3 fiscal 2024[120]. - TJX International reported net sales of $1.9 billion for Q3 FY2025, a 16% increase from $1.6 billion in Q3 FY2024, driven by a 7% increase in comp store sales and a 5% positive impact from foreign currency exchange[125]. - For the first nine months of FY2025, net sales reached $5.1 billion, a 9% increase from $4.7 billion in the same period last year, with a 4% increase in comp store sales[125]. Cash Flow and Investments - Operating activities generated net cash inflows of $3.4 billion for the nine months ended November 2, 2024, compared to $3.3 billion for the same period in FY2024[130]. - Investing activities resulted in net cash outflows of $1.6 billion for the first nine months of FY2025, primarily due to capital expenditures and the purchase of an equity method investment[131]. - The company held $4.7 billion in cash as of November 2, 2024, with $1.7 billion held by foreign subsidiaries[129]. Shareholder Returns and Corporate Actions - The company returned $997 million to shareholders through share repurchases and dividends during the third quarter of fiscal 2025[86]. - Quarterly dividends declared were $0.375 per share for the first nine months of FY2025, compared to $0.3325 per share in the same period of FY2024, totaling $1.2 billion in cash payments for dividends[135]. - TJX International plans to repurchase approximately $2.25 billion to $2.5 billion of stock under its stock repurchase programs in FY2025[134]. Strategic Initiatives - The company plans to enter Spain with its TK Maxx banner in fiscal 2027[86]. - A joint venture was established with Grupo Axo for a 49% stake in Multibrand Outlet Stores in Mexico, with an investment of $192 million[87]. - The company acquired a 35% stake in Brands for Less for $344 million, expanding its presence in the UAE and Saudi Arabia[87]. - The company entered into a joint venture with Axo for a 49% ownership stake in MOS, investing $192 million, and also acquired a 35% stake in BFL for $344 million[133]. Tax and Expenses - The effective income tax rate for Q3 fiscal 2025 was 25.3%, up from 25.0% in Q3 fiscal 2024, primarily due to excess tax benefits from share-based compensation[105]. - General corporate expenses increased to $150 million in Q3 FY2025 from $125 million in Q3 FY2024, driven by unfavorable impacts related to mark-to-market adjustments on inventory hedges[128].