When The TJX Companies (TJX) reports its third-quarter results next week, the numbers might come in just a hair below what Wall Street was hoping for. That's the preview from Telsey Advisory Group, which nonetheless thinks the off-price retail giant is doing just fine.
Analyst Dana Telsey, who keeps an Outperform rating and a $115 price target on the stock, expects TJX to post revenue of $14.804 billion and earnings of $1.20 per share. The consensus on the Street is looking for $14.844 billion and $1.22 per share, respectively. So, it's a miss, but not by much—more of a gentle stumble than a fall.
The more interesting story might be in the same-store sales. Telsey thinks that growth will come in flat versus last year, at 3%. That would actually hit the top end of the company's own guidance range, which the analyst says "reflects continued momentum in the business." In other words, even if the bottom line is a bit light, the core engine of customer traffic and spending appears to be humming along.
This is happening against a backdrop that hasn't been particularly friendly to retailers. "Despite ongoing tariff and macroeconomic pressures, TJX remains confident in its ability to navigate near-term challenges while sustaining long-term growth and profitability," Telsey wrote. It's the classic retail tightrope walk: costs are up, consumers are wary, but you still have to move merchandise.
TJX's playbook, according to the analyst, involves "flexible sourcing, disciplined buying closer to market, selective pricing adjustments that preserve its value proposition, and a steadfast focus on cost efficiencies." In plain English, they're getting creative with where they buy stuff, trying not to get stuck with too much inventory, tweaking prices just enough without scaring off bargain hunters, and watching every penny. It's the off-price model on defense, and so far, it seems to be working.
Ahead of the report, the market wasn't showing much panic. Shares of TJX were up about 0.6% to $147 when this analysis was published. Investors might be betting that a slight earnings miss is already priced in, and that TJX's long-term story—finding deals and passing them on—is still intact.
