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The TJX Companies, Inc.

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The TJX Companies posted second-quarter fiscal 2018 results, wherein both earnings and revenues exceeded expectations, driven by improved traffic and margin improvements, as well as higher market share. The company also raised its fiscal 2018 earnings guidance. We are impressed on the company’s brand enhancing initiative, aggressive store opening strategy and improving e-Commerce business. Though shares have been declining for the last several quarters, the stock has started rallying over the last one month in comparison to the industry’s growth. However, the company is facing disappointing comps growth of late. In the second quarter, though sales grew on the back of increase in comps and improved traffic, comps growth of 3% were lower than the 4% comps growth in the year-ago quarter. The company is also facing margin pressure due to higher payroll and pension related costs. Currency headwinds also remain a concern.

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