TJX vs. BURL: Which Off-Price Retailer is the Better Buy Now?

Core Insights - Off-price retail is gaining momentum as consumers remain price-conscious amid economic uncertainty, benefiting companies like TJX and Burlington [1][2] Group 1: Company Performance - TJX Companies benefits from a flexible off-price model, allowing rapid sourcing of quality branded merchandise, enhancing customer loyalty through a treasure-hunt shopping experience [3] - In Q3 of fiscal 2026, TJX reported a 5% increase in comparable sales, with positive performance across all divisions, indicating strong demand [4] - Burlington's total sales rose 7% to $2,706 million in Q3 of fiscal 2025, driven by solid demand and improved merchandising execution [7] Group 2: Expansion Plans - TJX aims to expand its store footprint to 7,000 locations globally, currently operating 5,191 stores, with plans to enter the Spanish market [5] - Burlington operated 1,211 stores at the end of Q3 and plans to open 104 net new stores in fiscal 2025 and at least 110 in 2026, supported by strong new-store performance [9] Group 3: Profitability and Margins - TJX faces margin pressures due to rising operating costs, with SG&A expenses increasing in Q3 of fiscal 2026 [6] - Burlington expanded its adjusted EBIT margin by 60 basis points in Q3, with adjusted EPS climbing 16% to $1.80, reflecting effective expense management [8] Group 4: Market Position and Valuation - TJX is viewed as a steadier off-price option, with stronger comparable sales and a global footprint, while Burlington's results show risks tied to weather sensitivity affecting sales [10][11] - TJX trades at a forward P/E ratio of 30.95x, above the industry average of 29.39x, while Burlington trades at a lower multiple of 26.46x [17] - Over the past year, TJX has gained 27.9%, outperforming the industry's 2.5% growth, while Burlington experienced a slight decline of 1.7% [18] Group 5: Overall Outlook - Both companies are well-positioned to benefit from sustained demand for value-oriented retail, but TJX currently offers greater visibility and a more balanced risk-reward profile [21]