The TJX Companies, Inc.

TJX is off to a strong start to fiscal 2023 and delivered a better-than-anticipated top-line performance in the last quarter. The company’s better-than-expected US comp store sales increased, driven by an excellent performance at its Marmaxx division. Also, it saw positive U.S. customer traffic driven by Marmaxx. Adjusted earnings per share grew, and profitability improved over the last year. Strong mark-on within merchandise margin was offset by higher markdowns. Further, customer traffic was the key driver of the comp increase. Also, the average basket increased. Internationally, its TJX International and TJX Canada divisions’ performance was good. Full-year comp sales decreased at HomeGoods. In Europe, TJX significantly outperformed several other key brick-and-mortar retailers. Sales were robust in Australia, and it continued expanding its store footprint nationwide. We give TJX Companies a ‘Hold’ rating with a revised target price.