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TJX Companies at a 52-Week High on Q2 Results & Solid Comps

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Shares of The TJX Companies, Inc. (TJX - Free Report) touched a 52-week high of $111.88, before closing the session a tad lower at $111.13 on Sep 5. It goes without saying that the company’s upbeat second-quarter fiscal 2019 performance and an encouraging view acted as propellants, placing the stock firmly for a solid start to the third quarter.

The stock has gained 4.3% in just over two weeks since the announcement of results. Looking at the broader perspective, shares of this Framingham, MA-based company have rallied roughly 35% in the past six months, outpacing the industry and the S&P 500’s respective growth of 25% and 6%.



Definitely, the credit for the stock’s stellar run on the bourses goes to impressive second-quarter results apart from strategic endeavors and sound fundamentals. (Read: Robust Traffic Aids TJX Companies Q2 Earnings, View Up)  

Comps: Primary Driver

TJX Companies has been reporting positive comparable store sales (comps) for a while now, buoyed by robust initiatives to attract traffic. During the second quarter, consolidated comps grew 6% year over year, fueled by increased customer traffic across all segments, especially the Marmaxx division. Notably, the quarter marked the 16th straight period of higher customer traffic. That said, management now expects comps growth of 3-4% for fiscal 2019.

Store Front: Quite Rational

TJX Companies has an aggressive store-opening strategy and it regularly opens stores and expands across the United States, Europe and Canada. While many retailers are resorting to store closures, TJX Companies added around 53 stores in the second quarter.

Estimates: Robust Outlook a Driver

For fiscal 2019, management projects adjusted earnings in the range of $4.10-$4.14 per share, representing 6-8% increase from the year-ago period. Earlier, the company expected the bottom line in the band of $4.04-$4.10.

Moreover, splendid estimate revision trend for the current and next fiscal instills optimism. Over the past 30 days, the Zacks Consensus Estimate for fiscal 2019 and 2020 moved up by 5 cents and 14 cents to $4.89 and $5.48, respectively.

Bottom Line

TJX Companies’ off-price model along with its strategic store locations, impressive brands and fashion products has been driving its performance both in stores and online. Also, the company’s effective marketing initiatives and loyalty programs help it boost comps.

Currently, TJX Companies carries a Zacks Rank #2 (Buy) and has a Growth Score of A. We expect these factors to continue to act in favor of the stock.

Let Your Portfolio See Growth: 3 Stocks to Buy

Boot Barn Holdings, Inc. (BOOT - Free Report) pulled off an average positive earnings surprise of 31.8% in the trailing four quarters and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores, Inc. (BURL - Free Report) pulled off an average positive earnings surprise of 11.4% in the trailing four quarters. It has a long-term earnings growth rate of 20.2% and a Zacks Rank #2.

Target Corp. (TGT - Free Report) has a long-term earnings growth rate of 12% and carries a Zacks Rank of 2.

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