We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The TJX Companies (TJX) Benefits From Store & Online Strength
Read MoreHide Full Article
The TJX Companies, Inc. (TJX - Free Report) is reaping benefits from its solid store and e-commerce growth efforts. The leading off-price retailer has been seeing strength in its Marmaxx and HomeGoods segments. However, the company is not immune to a rising cost environment.
Let’s delve deeper.
Growth Efforts on Track
The TJX Companies is benefiting from its solid store and e-commerce growth efforts. The company has been rapidly expanding its footprint in the United States, Europe, Canada and Australia. During the fiscal 2024, the company added 119 new stores, ending the quarter with 4,954 stores. Management expects to open nearly 141 net new stores in fiscal 2025 to reach 5,100 stores. The TJX Companies has been witnessing robust demand for an in-person shopping experience in the last few years. Its flexible buying supply chain and store formats aid the company in opening stores across a wide customer demographic.
With an increasing number of consumers resorting to online shopping, The TJX Companies has undertaken several initiatives to boost online sales and strengthen its e-commerce business. For the fiscal 2025, the company expects to incur capital expenditures of $2-$2.1 billion, which includes opening new stores, remodels and relocations and investments in the distribution network and infrastructure.
Image Source: Zacks Investment Research
Strength Across Core Segments
The TJX Companies has been seeing strength in the Marmaxx segment for a while. In the fourth quarter of fiscal 2024, net sales came in at $10,037 million, up 12% in the Marmaxx (U.S.) division. Comparable store sales rose 5% in Marmaxx (U.S.), buoyed by solid apparel and home categories. We believe that strength in Marmaxx is likely to continue aiding overall sales.
Also, the company has been witnessing solid momentum in its HomeGoods (U.S.) division, driven by a rise in customer traffic. In the HomeGoods (U.S.) division, the company’s net sales amounted to $2,805 million, up 16%. In the quarter, U.S. comparable store sales rose 7% in the HomeGoods category.
High Costs Hurt
Over time, The TJX Companies is dealing with the adverse impacts of the high cost of sales and operating expenses. In the fourth quarter of fiscal 2024, the company's cost of sales increased by 7.4% to $11,528 million. SG&A costs, as a percent of sales, were 18.9%, up 1.9 percentage points. The rise was caused by increased incentive compensation accruals, incremental store wages and payroll costs. Management expects first-quarter fiscal 2025 SG&A expenses to be nearly 19.5%, up 50 basis points, thanks to incremental store wage and payroll costs.
Wrapping Up
All being said, TJX is poised for steady growth, supported by improved merchandise margins and expense leverage. We believe that The TJX Companies’ off-price model, along with its strategic store locations, impressive brands and fashion products and efficient supply-chain management, are likely to aid its performance.
Shares of the Zacks Rank #3 (Hold) company have increased 23.9% in the past year compared with the industry’s 21.2% decline.
The Zacks Consensus Estimate for Burlington Stores’ current fiscal-year sales and earnings suggests growth of 10.2% and nearly 22.3%, respectively, from the year-ago reported numbers.
American Eagle (AEO - Free Report) , a leading apparel retailer, currently sports a Zacks Rank of 1. AEO delivered an earnings surprise of 22% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle’s current fiscal-year sales and earnings suggests growth of 3.3% and nearly 12.5%, respectively, from the year-ago reported numbers.
Target Corporation (TGT - Free Report) operates as a general merchandise retailer in the United States. It currently has a Zacks Rank #2 (Buy). TGT has a trailing four-quarter earnings surprise of 27.1%, on average.
The Zacks Consensus Estimate for Target’s current financial-year earnings suggests growth of 5% from the year-ago reported figure.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The TJX Companies (TJX) Benefits From Store & Online Strength
The TJX Companies, Inc. (TJX - Free Report) is reaping benefits from its solid store and e-commerce growth efforts. The leading off-price retailer has been seeing strength in its Marmaxx and HomeGoods segments. However, the company is not immune to a rising cost environment.
Let’s delve deeper.
Growth Efforts on Track
The TJX Companies is benefiting from its solid store and e-commerce growth efforts. The company has been rapidly expanding its footprint in the United States, Europe, Canada and Australia. During the fiscal 2024, the company added 119 new stores, ending the quarter with 4,954 stores. Management expects to open nearly 141 net new stores in fiscal 2025 to reach 5,100 stores. The TJX Companies has been witnessing robust demand for an in-person shopping experience in the last few years. Its flexible buying supply chain and store formats aid the company in opening stores across a wide customer demographic.
With an increasing number of consumers resorting to online shopping, The TJX Companies has undertaken several initiatives to boost online sales and strengthen its e-commerce business. For the fiscal 2025, the company expects to incur capital expenditures of $2-$2.1 billion, which includes opening new stores, remodels and relocations and investments in the distribution network and infrastructure.
Image Source: Zacks Investment Research
Strength Across Core Segments
The TJX Companies has been seeing strength in the Marmaxx segment for a while. In the fourth quarter of fiscal 2024, net sales came in at $10,037 million, up 12% in the Marmaxx (U.S.) division. Comparable store sales rose 5% in Marmaxx (U.S.), buoyed by solid apparel and home categories. We believe that strength in Marmaxx is likely to continue aiding overall sales.
Also, the company has been witnessing solid momentum in its HomeGoods (U.S.) division, driven by a rise in customer traffic. In the HomeGoods (U.S.) division, the company’s net sales amounted to $2,805 million, up 16%. In the quarter, U.S. comparable store sales rose 7% in the HomeGoods category.
High Costs Hurt
Over time, The TJX Companies is dealing with the adverse impacts of the high cost of sales and operating expenses. In the fourth quarter of fiscal 2024, the company's cost of sales increased by 7.4% to $11,528 million. SG&A costs, as a percent of sales, were 18.9%, up 1.9 percentage points. The rise was caused by increased incentive compensation accruals, incremental store wages and payroll costs. Management expects first-quarter fiscal 2025 SG&A expenses to be nearly 19.5%, up 50 basis points, thanks to incremental store wage and payroll costs.
Wrapping Up
All being said, TJX is poised for steady growth, supported by improved merchandise margins and expense leverage. We believe that The TJX Companies’ off-price model, along with its strategic store locations, impressive brands and fashion products and efficient supply-chain management, are likely to aid its performance.
Shares of the Zacks Rank #3 (Hold) company have increased 23.9% in the past year compared with the industry’s 21.2% decline.
Top 3 Retail Bets
Burlington Stores (BURL - Free Report) , a retailer of branded merchandise, currently flaunts a Zacks Rank #1 (Strong Buy). BURL has a trailing four-quarter earnings surprise of 10.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ current fiscal-year sales and earnings suggests growth of 10.2% and nearly 22.3%, respectively, from the year-ago reported numbers.
American Eagle (AEO - Free Report) , a leading apparel retailer, currently sports a Zacks Rank of 1. AEO delivered an earnings surprise of 22% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle’s current fiscal-year sales and earnings suggests growth of 3.3% and nearly 12.5%, respectively, from the year-ago reported numbers.
Target Corporation (TGT - Free Report) operates as a general merchandise retailer in the United States. It currently has a Zacks Rank #2 (Buy). TGT has a trailing four-quarter earnings surprise of 27.1%, on average.
The Zacks Consensus Estimate for Target’s current financial-year earnings suggests growth of 5% from the year-ago reported figure.