There’s A New King in Retail

We’re in the tail end of earnings season.

Many companies have already reported their 3rd quarter earnings.

Retailers are the exception.

Most companies have their fiscal year line up with the calendar year.

It makes it easier for taxes.

However, retailers want to make sure the busy holiday shopping season falls into a single fiscal year.

It’s why retailers use January as their year end.

It also means retailers report their earnings at the end of earnings season.

And last week was very busy with earnings.

Walmart (ticker: WMT), Target (ticker: TGT), and Home Depot (ticker: HD) all reported in the last few days.

Some results were better than others, but a smaller retailer really stood out.

TJX Companies (ticker: TJX) reported earnings on Wednesday and blew everyone away.

TJX owns many discount retail stores including TJ Maxx (clothing), Marshalls (department store), and Home Goods (furnishings).

TJX’s revenue grew 7% compared to the 3rd quarter in 2024.

And earnings per share grew over 12%.

But it’s not the best part.

Same-store sales is a critical metric for retailers.

It measures sales growth in existing stores and shows how well a retailer can grow without opening new locations.

TJX same-store sales growth was 5%, which was higher than the 3% growth last year.

TJX also raised its guidance.

Guidance is company management’s expectations for the future.

And TJX’s management raised its projections for the rest of the year.

They now expect same-store sales to be 4% for the year (previously forecasted 3%).

And they expect EPS to be around $4.65 (previously forecasted $4.55).

It was a remarkable quarter for TJX.

TJX probably sounds familiar.

I recommended it a few months ago with a group of other companies.

But TJX deserves its own article.

Its stock price has been on a tear, especially compared to the overall Retail sector.

Retail has been flat over the last year, but TJX is up over 20%!

TJX’s stock performance makes sense.

TJX has grown earnings and revenue by around 8-9% consistently each year over the past decade.

And TJX’s Return on Equity (ROE) is an amazing 60%.

The future for TJX is outstanding.

TJX operates over 5,000 locations across the world.

And discount retailers like the brands TJX owns are in a great position.

People are really worried about the economy and the cost of living.

And recently, an index measuring consumer confidence hit a 3-year low.

Low consumer confidence is usually a death sentence for retailers.

Worried consumers don’t want to shop!

But TJX’s brands are in the perfect spot to serve more price-conscious consumers.

Have you ever shopped at one of TJX’s brands?

There’s a TJ Maxx near where I live, and it’s constantly packed full of shoppers.