The TJX Companies, Inc.

This is our first report on TJX Companies is pleased with its third-quarter performance. The company once more produced solid profitability and a fantastic merchandise margin. On the top line, Marmaxx performed exceptionally well, especially in its apparel division, where sales were high. This contributed to its better-than-expected US comp sales. Besides, their third-quarter results demonstrate how well their highly skilled associates have implemented their adaptable business strategy. Although their industry is not immune to macroeconomic influences, the team thinks that their off-price retail model’s flexibility and the breadth of their knowledge and experience, particularly within their merchant organization, will continue to be a significant advantage for them. The US average basket increased for the third quarter. The US customer traffic was also lower than in the second quarter. However, it improved and grew as the quarter went on. Overall, the management believes they are in a good position to gain more market share. Given that they draw a diverse consumer base from various income categories, the team sees many chances to increase sales and traffic. We initiate coverage on the stock of The TJX Companies with a ‘Hold’ rating.