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3 Factors That Makes TJX Companies (TJX) a Promising Pick

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The TJX Companies, Inc. (TJX - Free Report) appears well positioned on the back of robust growth-oriented efforts. Notably, shares of this Zacks Rank #2 (Buy) company have increased 29.4% in the past six months compared with the industry’s growth of 27.6%. Moreover, shares have comfortably outperformed the Zacks Retail-Wholesale sector’s rise of 11.7% during the same period.

HomeGoods Segment: A Key Driver

TJX Companies HomeGoods segment is seeing robust demand of late. During fiscal third quarter, open-only comp store sales were up 15% year over year in the HomeGoods (U.S.) segment. The company’s aggressive expansion of HomeGoods in the last five years has positioned it to capture outsized home market share. Incidentally, management plans to rollout e-commerce services on HomeGoods.com during the end of 2021 to leverage its strength in the home category and capitalize on market share growth.

 

Efforts to Drive Store & E-commerce Business

TJX Companies is benefiting from its solid store and e-commerce growth efforts. With increasing number of consumers resorting to online shopping, management has undertaken several initiatives to boost online sales and strengthen its e-commerce business. Notably, the company is on track to add new categories and brands to its U.S. and U.K. online businesses.

Apart from this, TJX Companies regularly opens stores and is expanding rapidly across the United States, Europe, Canada and Australia. The company opened 17 new stores in the third quarter of fiscal 2021, taking the total count to 4,574. Well, the company’s off-price model along with its strategic store locations, impressive brands and fashion products are likely to drive its stores and online performance.

Effective Strategies to Boost Growth

TJX Companies is committed toward boosting growth, through effective marketing initiatives and loyalty programs. Incidentally, the company’s aggressive marketing and advertising campaigns through multiple mediums (TV, radio and social media) have been adding growth. In fact, the company’s marketing campaigns drove the top line in the third quarter of fiscal 2021. Apart from these, TJX Companies’ gift-giving initiatives, unique among off-price retailers and loyalty card program (which offers consumers a non-credit card choice and soft benefits such as early shopping hours) have been helpful in improving customer engagement.

All said, we believe that strength in HomeGoods segment coupled with the aforementioned upsides are likely to help TJX Companies stay in investors’ good books.

More Solid Retail Picks

Dollar Tree (DLTR - Free Report) , which sports a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 10.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General (DG - Free Report) ,which carries a Zacks Rank #2, has a long-term earnings growth rate of 13.7%.

Target (TGT - Free Report) , which carries a Zacks Rank #2, has a long-term earnings growth rate of 8.5%.

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