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Will TJX Companies’ Growth Story Continue in the Third Quarter?

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Impressive performance

TJX Companies (TJX) stock has risen by an impressive 40.6% on a YTD basis as of November 13. The off-price retailer has been impressing investors with its consistent performance, while many retailers are struggling to survive due to the growing competition from online retailers. TJX Companies is scheduled to announce its results for the third quarter of fiscal 2019, which ended on November 3, on November 20. The company’s sales grew by 11.6% in the first half of fiscal 2019, which ended on August 4.

In comparison to TJX Companies, the stocks of rivals Ross Stores (ROST) and Burlington Stores (BURL) have risen 24.9% and 42.8%, respectively, since the start of the year.

TJX Companies has a well established off-price business model and sources its products from a vast universe of over 20,000 vendors. The company’s strong supply chain network and inventory management initiatives help it offer fresh merchandise to customers.

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Store growth potential

As of August 4, TJX Companies operated 2,313 Marmaxx stores (including T.J. Maxx and Marshalls stores) in the US, and 724 HomeGoods and Homesense stores. It has 469 stores in Canada, 613 stores in Europe, and 42 stores in Australia. The company sees the opportunity to operate 6,100 stores in the long run including 3,000 Marmaxx stores in the US, 1,400 HomeGoods and Homesense stores in the US, 600 stores in Canada, and 1,100 stores in Europe and Australia.

Series overview

This series on TJX Companies’ upcoming third-quarter results will analyze the expectations for the company’s sales, margins, and earnings. The series will also discuss TJX Companies’ valuation and analysts’ ratings for the off-price retailer.

Let’s take a closer look at sales estimates for TJX Companies in the next part of this series.

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