We're raising our price target on retail stock TJX after a beat-and-raise quarter

TJX posted a beat-and-raise quarter as consumers favor value: Q3 revenue rose 7.5% to $15.12 billion (consensus $14.85B), EPS $1.28 topped $1.22 estimates and consolidated same-store sales were up 5% (vs. 4% expected), with every operating segment beating and gross margin expanding ~101 bps. Management raised full-year guidance (sales $59.7–59.9B, same-store sales +4%, EPS $4.63–4.66, pretax margin 11.6%), while Q4 guidance was modestly below some Street estimates ($17.1–17.3B sales; EPS $1.33–1.36). The results underscore TJX’s resilient off-price model—winning market share amid consumer price sensitivity (contrasting with Target’s weaker print)—and the firm reiterated a buy-equivalent stance and lifted its price target to $160.

Analysis

TJX reported a beat-and-raise quarter with revenue of $15.12 billion (+7.5% year-over-year) versus the LSEG consensus of $14.85 billion and EPS of $1.28 versus $1.22 expected; consolidated same-store sales rose 5% (FactSet est. 4%) and every operating segment—Marmaxx, HomeGoods, TJX Canada and TJX International—outperformed for the third straight quarter. Marmaxx sequentially accelerated to 6% from 3% and HomeGoods held at 5%, supporting management's comment that the fourth quarter is "off to a strong start," while the stock briefly hit an all-time high before early-session profit-taking.

Gross margin expanded ~101 basis points year-over-year, driven by higher merchandise margin, lower freight costs, expense efficiencies and leverage on sales, even as cost of sales increased with higher volume; HomeGoods margin widened to 13.5% (+120 bps) while SG&A was modestly higher by six basis points due to wages, a foundation contribution and incentive accruals. Management said it absorbed tariff costs through these efficiencies.

TJX raised full-year guidance (sales $59.7–59.9B, same-store sales +4%, EPS $4.63–4.66, pretax margin 11.6%), but provided Q4 targets that slightly trail Street expectations (sales $17.1–17.3B vs. $17.31B, same-store sales 2–3% vs. consensus 3.1%, EPS $1.33–1.36 vs. $1.37). The print reinforces TJX's resilient off-price model relative to full-price peers (Target cited as contrasting), supports the reiterated buy-equivalent rating and new $160 price target, but near-term guidance and valuation following the rally are watch points.

Key Decisions for Investors

• Consider adding or increasing exposure to TJX given the beat-and-raise, broad-based segment strength, and gross-margin expansion that underpin upgraded full-year guidance, while sizing positions mindful of the recent run to an all-time high
• Monitor Q4 guidance vs. Street closely—if same-store sales midpoint (2.5%) or EPS midpoint (~$1.345) materially underperform consensus, be prepared to trim or hedge positions and watch freight and merchandise-margin trends as key drivers
• Use tactical risk management (partial profit-taking or options hedges) into the holiday season given potential for profit-taking after the rally and compare positioning against off-price peers Ross and Burlington and the wider retail backdrop exemplified by Target's weaker print