Can TJX International Momentum Drive the Next Phase of Growth?

Core Insights - TJX Companies' international business is a significant growth driver, with a 5% year-over-year increase in comparable store sales in Q2 of fiscal 2026, particularly strong in Europe and Australia [1][10] - The company's profit margin for the international segment improved to 5.2%, an increase of 80 basis points from the previous year [1][10] - Management highlighted the company's established presence and leadership in international markets, which enhances its value proposition to consumers [2] Expansion Opportunities - TJX plans to open over 1,800 new stores in existing markets, including Spain, which is expected to contribute to future sales and earnings growth [3][10] - The company is also exploring growth through a joint venture in Mexico and investments in the Middle East, aiming to introduce its off-price retail model to new regions [4] Sourcing and Product Strategy - TJX's global sourcing network includes over 21,000 vendors across more than 100 countries, allowing the company to offer fresh, branded assortments in its international stores [5] Competitive Landscape - Walmart Inc. reported a 10.5% increase in international sales in Q2 of fiscal 2026, driven by growth in China, Walmex, and Flipkart, with e-commerce penetration reaching nearly 27% [6] - Best Buy Co., Inc. saw a year-over-year increase of 11.3% in international sales, although its gross margin decreased by 210 basis points [7] Financial Performance - TJX stock has increased by 6.6% over the past three months, contrasting with a 4.4% decline in the industry [8] - The forward 12-month price-to-earnings ratio for TJX is 28.29X, lower than the industry's average of 31.72X, indicating a favorable valuation [11] - Earnings estimates for fiscal 2026 and 2027 imply year-over-year growth of 7% and 10.3%, respectively, with recent upward revisions in earnings estimates [12]