2 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

TJX boosted its dividend 13% and announced a multibillion-dollar buyback after reporting Q4 comparable sales +5% YoY and mid-single-digit YoY growth across segments in fiscal 2026, signaling strong cash flow and financial flexibility. Deckers, while down 17% over the last 12 months, delivered record Q3 FY26 revenue with HOKA now >33% of revenue and HOKA sales +18.5% YoY; the stock trades at a trailing P/E of 14.2 versus a five-year average of 23.4, suggesting a potential undervaluation and rebound opportunity.

Analysis

Off-price retail (TJX) is benefiting from a structural arbitrage: when full-price channels overorder or slow, off-price buyers capture scarce supply at favorable markups and turn inventory faster with lower working capital. That dynamic pressures middle-market department stores’ gross margins and forces more aggressive promotions, amplifying TJX’s bargaining leverage with suppliers and liquidators.

For Deckers, the optionality is two-fold: durable brand leverage in premium athleisure plus international HOKA expansion that should compound unit economics if channel mix shifts toward direct and owned retail. The clearest risks are a fashion-cycle pullback and margin compression if the company over-discounts to defend share; both would show up quickly in inventories and wholesale sell-through over a 2-3 quarter window.

Second-order beneficiaries include contract manufacturers and logistics providers who can flex capacity for off-price restocking cadence; losers are inventory-heavy legacy apparel retailers that lack rapid markdown discipline. Near-term catalysts to watch are wholesale order cadence (weekly sell-throughs), inventory turn trends, and any incremental changes to capital allocation that accelerate EPS via buybacks — these will drive 3–12 month repricings, while brand health and international rollout determine outcomes over 12–36 months.

Key Decisions for Investors

• Long DECK via Jan-2028 LEAP calls (1.0x notional) + buy 40% notional puts to hedge: thesis is mean-reversion in multiple as HOKA internationalization sustains; target 30–50% upside over 12–24 months vs downside capped by protective puts. Timeframe: 12–24 months. Risk/reward: asymmetric — limited known downside via hedge, sizeable upside if re-rating and unit growth continue.
• Long TJX shares with a 6–9 month covered-call overlay (sell 1–2 month OTM calls on 25–50% of position): captures income while retaining upside from continued share gains and capital returns. Timeframe: 3–12 months. Risk/reward: modest upside plus premium income; downside protection only from premium received — add puts if volatility spikes.
• Pair trade: Long TJX / Short M (Macy’s) sized 1:1 by dollar exposure to isolate off-price vs department-store gap; hold 3–12 months and monitor weekly sell-throughs and inventory turns. Timeframe: 3–12 months. Risk/reward: Expresses structural share shift — if macro weakens sharply both may fall, so use stop-loss or option collars.
• Event-trade: If Deckers reports sequential inventory improvement or better-than-expected international comps, buy near-term calls (3–6 months) to capture a fast re-rating; conversely, if wholesale order cuts appear, initiate a tactical short against DECK for a 1–3 month horizon. Timeframe: trade around quarterly prints. Risk/reward: high gamma — requires close monitoring of sell-through and guidance changes.