The TJX Companies, Inc. TJX has delivered strong stock performance, with shares up 26.2% over the past year, surpassing the industry’s growth of 21.6%. This success is driven by the company’s commitment to providing an exceptional shopping experience and unmatched value to customers daily. TJX's effective cost control measures have further boosted profitability, while the company continues to benefit from robust growth in both its physical stores and e-commerce channels.

Let’s discuss in detail.

TJX’s Key Drivers in Place

The TJX Companies continues to thrive by prioritizing an exceptional shopping experience and offering unmatched value to its customers. A clear indicator of its business strength is the consistent growth in customer transactions, which drove a solid comp store sales increase of 3% in the third quarter of fiscal 2025, reaching the upper end of its forecast. Comparable store sales rose 2% at Marmaxx (the United States), 3% at HomeGoods (the United States), 2% at TJX Canada and 7% at TJX International (Europe & Australia). This steady growth underscores the success of its strategy and positions the company for long-term sustainability.

Effective Cost-Saving Efforts Fuel TJX Stock

The TJX Companies remains focused on maintaining effective cost control, key to enhancing its profitability. The company achieved a pre-tax profit margin of 12.3%, marking a 30-basis-point (bps) increase in the fiscal third quarter. The upside was driven by the timing of specific expenses, cost-saving measures and an increase in net interest income. This, coupled with a 50-bps expansion in the gross margin due to higher merchandise margins, demonstrates TJX's operational efficiency and strong control.

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TJX’s Expansion Efforts Solid

The TJX Companies is rapidly expanding its footprint in the United States, Europe, Canada and Australia. Management sees potential for continued store openings to add 1,200 stores across its current markets, which would expand its existing retail footprint of more than 5,000 stores. The company is also making a strategic push into Spain, with plans to open its first stores under the T.K. Maxx banner by early 2026. The company is also strengthening its presence in high-growth regions through investments in Mexico, the UAE and Saudi Arabia. With increasing consumers resorting to online shopping, The TJX Companies has undertaken several initiatives to boost online sales and strengthen its e-commerce business.

Final Words for TJX Stock

We believe the off-price retail model continues to drive TJX’s success, providing the company with a competitive edge in the global market. With its expertise in offering high-quality branded merchandise at attractive prices, the company is well positioned to capture a larger share of the growing off-price retail sector. This focus on consumer demand and its flexible business model ensures that The TJX Companies can thrive in a competitive retail landscape. At present, the company carries a Zacks Rank #2 (Buy).

Top Three Picks

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You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Deckers’ current financial-year sales and earnings indicates growth of 13.6% and 13.8%, respectively, from the year-ago reported figures.

The Gap, Inc. GAP is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently flaunts a Zacks Rank #1.

The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales indicates growth of 41.3% and 0.8%, respectively, from the fiscal 2024 reported figures. GAP delivered a trailing four-quarter average earnings surprise of 101.2%.

Dillard's, Inc. DDS, a department store retailer, currently sports a Zacks Rank #1. DDS has a trailing four-quarter earnings surprise of 8.8%, on average.

The Zacks Consensus Estimate for Dillard's current financial-year sales and earnings suggests a decline of 5.2% and 21.9%, respectively, from the year-ago levels.

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