Shoppers never know exactly what they will find at a T.J. Maxx, Marshalls, or HomeGoods. Investors, on the other hand, are finding earnings from their parent company rather predictable. TJX Companies on Wednesday delivered a better-than-expected quarter but light outlook. The market was hardly concerned, sending shares up 3%, because TJX consistently under-promises and over-delivers. Sales in its fiscal 2025 fourth quarter totaled $16.35 billion, exceeding the consensus estimate of $16.2 billion, according to LSEG. Revenue was down slightly year over year. But direct comparisons were skewed by an extra week in TJX’s prior fiscal year. Adjusted earnings per share (EPS) in the three months ended Feb. 1 came in at $1.23, topping expectations of $1.16, LSEG data showed. Same-store sales rose 5% from the year-ago period, well ahead of the 3.1% growth projected by analysts, according to FactSet. TJX Companies Why we own it : The owner of T.J. Maxx, Marshalls and HomeGoods is well-suited for the current economic environment, offering inflation-weary customers wide-ranging merchandise at compelling prices and a “treasure hunt” in-person shopping experience. Competitors : Ross Stores and Burlington Stores Last buy : May 2, 2024 Initiation : Aug. 24, 2022 Bottom line TJX validated its status as a core holding in the Club’s portfolio with another set of strong numbers — this time for the important holiday shopping period — and likely conservative guidance to ensure executives keep their credibility among investors. Trust is not easily rebuilt. In all four quarters of TJX’s fiscal 2025, EPS came in above the high end of the guidance range. “They always lowball the forecast, and they did it again,” Jim Cramer said Wednesday morning, as he showed off a belt purchased at a T.J. Maxx for roughly $14. “That’s why that stock is up big,” Jim said — and not just on Wednesday. Over the past 12 months, TJX shares have advanced 27%, crushing a basket of retail stocks up less than 2% in that stretch, and outperforming the S & P 500 ‘s gain of nearly 18%. TJX 1Y mountain TJX Companies 1 year Considering everything we heard Wednesday, it’s clear the wind is still at TJX’s back. The company also announced another 13% increase to its annual dividend payout — its 28th increase over the past 29 years. It also plans to buy back up to $2.5 billion in stock in fiscal 2026, which would be equal to what it repurchased in fiscal 2025. We’re bumping up our price target to $140 a share, given the strong quarterly performance, but keeping our 2 rating , meaning we’d wait for a pullback before adding to the position. Commentary Simply put, TJX’s stores have a reputation as great places to shop for quality products — sweaters, mirrors, luggage and, of course, belts — at fair prices, so people keep coming back. Indeed, TJX’s 5% increase in same-store sales, a crucial metric in the retail industry, was driven by an increase in transactions, rather than selling the same…
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