We’re Picking Up More Shares of This Discount Retailer
| Symbol | Transaction Type (Sell/Buy) | # Shares Traded |
|---|---|---|
| TJX | Buy | 100 |
After you receive this alert, the Portfolio will buy 100 shares of TJX Corp ($TJX) at or near $147. Following the trade, the Portfolio will own 1,422 TJX shares, roughly 3.25% of it assets.
We are using the market’s post earnings reaction to TJX’s July 2026 quarterly results and guidance to pick up some additional shares for the Portfolio. With inflation pressures poised to remain in place for longer, potentially through the year-end holiday shopping season, we continue to see TJX and its compliment of store brands benefitting as consumers become increasingly selective with their shopping dollars.
TJX delivered 4% comp sales for its July 2026 quarter, which was on top of the 4% comp sales figure in the year-ago quarter. While the comp sales figure for the Marmaxx brand, which includes TJ Maxx, Marshalls and Sierra stores, rose 1% in the reported quarter, comp sales at Home Goods, TJX Canada and TJX International climbed 6% to 7% in the quarter.
We can’t ignore the slower comp sales at what accounts for 60% of TJX’s business, but there are two factors that we should also focus on. First, consolidated margins rose to 11.9% compared to 11.4% in the year-ago quarter and management upped its outlook for this year to 12% to 12.1% excluding the impact of tariff refunds. That implies a better margin profile in the second half of the year, which is also seasonally stronger for the company given holiday shopping.
Second, TJX shared it is already seeing a rebound in the Marmaxx business. As we think about that, it makes sense given the rebound in oil and gas prices as well as the current back-to-school shopping season. We also think the strength of Amazon’s ($AMZN) 2026 Prime Day was a headwind for the Marmaxx business during the reported quarter. As consumer become more selective in their spending, we are likely to that bring competition, but we also recognize TJX excels at picking up branded merchandize on the cheap.
We are also encouraged by TJX stepping up its planned footprint expansion to a total of 7,500 locations compared to 5,262 at the end of the July quarter. In our view, the company is tapping into the cash-strapped consumer investment theme that we have, recognizing the number of consumers that struggle financially. PNC Bank ($PNC) finds that 67% of American struggle while Lending Club ($LC) puts the figure closer to 60%.
As we wrap up this trade alert, we’ll mention two other items.
One, TJX lifted its 2027 EPS guidance to $5.31 to $5.36 and $5.15 to $5.20 after excluding an expected net benefit of $0.16 from tariff refunds. That’s up from the $4.93 to $5.02 TJX guided back in late February. To those who may be miffed the company’s updated 2027 EPS missed the $5.22 consensus, how much of that figure included tariff refunds? Let’s also remember that TJX tends to skew its guidance on the conservative side.
Second, TJX repurchased 8.9 million shares of stock during the quarter for about $1.4 billion, which suggests an average price of about $157. With TJX shares below that level and management reiterated its plans to buy $2.75 to $3.0 billion back in stock this year, we’ll look to get a jump on that before TJX’s repurchase window re-opens.
As we make this trade, we reiterate our One rating and our $185 target. Because of the trade, we will adjust our checkpoint to $128 from $135.
More Pro Portfolio
- Locking in Gains, Setting New Price Target for This Data Center Play
- We’re Tracking 27 Portfolio Signals Across Our Investing Themes
- Weekly Roundup: An Electric Week for the Market Was Also a Great One for the Portfolio
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade’s executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro was long AMZN and TJX.
| Symbol | Panic Price |
|---|---|
| TJX | 128 |
