TJX Pursue (TJX) shares are trading higher on Wednesday after the off-brand retailer beat sales and earnings expectations for its fiscal second quarter and raised its full-year forecast.
For the 13 weeks ended August 3, TJX’s revenue rose 5.6% year over year to $13.5 billion, driven by growth in comparable sales across all brands and regions, including combined domestic growth of 5% at TJ Maxx, Marshalls and Sierra. Earnings per share (EPS) rose 12.9% year over year to 96 cents.
“I am extremely pleased with our performance in the second quarter. Our comparable sales increase of 4%, our pretax profit margin and our earnings per share exceeded our plans,” TJX CEO Ernie Herrman said in a statement. “Our overall comparable sales growth was driven solely by customer transactions, which increased across all business segments.”
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The results exceeded analysts’ expectations. According to Yahoo Finance, Wall Street had expected revenue of $13.3 billion and earnings of 92 cents per share.
“Based on our strong second quarter results, we are increasing our full-year guidance for both pretax profit margin and earnings per share,” Herrman said, adding, “The third quarter is off to a strong start.”
Compared to previous forecasts, TJX now expects:
| Metric | New perspective | Outlook so far |
|---|---|---|
| Comparable store sales | About 3% | 2% to 3% |
| Profit margin before taxes | About 11.2% | 11% to 11.1% |
| EPS | $4.09 to $4.13 | $4.03 to $4.09 |
For the third quarter, TJX expects comparable sales growth in the range of 2 to 3 percent and earnings per share in the range of $1.06 to $1.08, just below the $1.10 per share that analysts expect.
Should I buy, sell or hold TJX stock?
TJX has had a stellar year on the charts, rising 28% on a total return basis (price change plus dividends). Not surprisingly, Wall Street is bullish on the consumer discretionary stock.
Of the 25 analysts covering TJX and tracked by S&P Global Market Intelligence, 16 recommend the stock as a Strong Buy, five call it a Buy, three say a Hold, and one recommends it as a Sell. This is a consensus Buy rating and a strong conviction.
Jefferies analyst Corey Tarlowe speaks for the bulls, giving the retail stock a buy rating and a price target of $130. “TJX is likely to benefit from a long-term migration to the off-price sector, which is likely to recover faster and stronger than other retail sectors,” Tarlowe writes in a note to clients. “Expansion at home and abroad offers unique growth opportunities.”
However, not all analysts are bullish on TJX. Financial services firm CFRA Research rates TJX stock a “sell” with a $100 price target. The stock trades at 36 times fiscal 2026 earnings estimates, which is expensive for this top retailer, says CFRA Research analyst Zachary Warring.
CFRA’s price target of $100 represents a 17% discount to current levels.
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