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TheStreet Open House

Will TJX Be Retail's Winner This Earnings Season?

NEW YORK ( TheStreet) -- Will TJX's (TJX) so-called Maxinnistas be the answer to the latest quarter's retail earnings woes?

Retailers from Wal-Mart (WMT) to Nordstrom (JWN) last week reported lower-than-expected sales for the second quarter and tempered Wall Street expectations for the remainder of the year.

This week we'll hear from J.C. Penney (JCP) and TJX on Tuesday, among others, with Target (TGT) reporting Wednesday. More than one analyst believes that TJX could be the retail winner this earnings season.

For the July-ending quarter, the Framingham, Mass.-based company is expected to report quarterly earnings growth of 13% to 63 cents a share. Revenue is expected by analysts to climb 7% to $6.37 billion, according to Thomson Reuters.

Also see: Wal-Mart Disappoints On Earnings, Kohl's Profit Slips

Also see: Nordstrom: Earnings Beat, Revenue Misses

Given the current tough environment for apparel buying, as evidenced by softer sales from retailers that cater to both high and low-end consumers, TJX could possibly be the exception, as the parent company of the T.J. Maxx, Marshalls and HomeGoods chains, with its 2012 e-commerce acquisition of Sierra Trading Post, is one the best positioned retailers right now, according to more than one analyst.

"They're sitting pretty because the focus on fashion is real value. And they have HomeGoods as well as a home section in the Marshalls and T.J. Maxx and that has been an area that has been strong and will continue to be strong," says retail analyst Marie Driscoll of Driscoll Advisors.

Wal-Mart targets the "low-income customer where things really have hit them," Driscoll says. "T.J. Maxx has consumers all over the spectrum, so they're consumer profile I would say is middle America, maybe even a consumer with a little higher income, who's looking for a bargain."

Driscoll says the same consumer is also into outlet shopping and can also be found at places like Nordstrom Rack, which fared somewhat better than Nordstrom full-line stores, the company said last week.

TJX saw a 7% increase in comparable store sales for the second quarter of 2012. Driscoll is expecting comp sales for this year's second quarter to be slightly lower for the quarter, however unlike other retailers that have reported so far, Driscoll doesn't expect the company to lower guidance for the remainder of the year. She does caution that whatever TJX says about its e-commerce initiatives could throw a wrench in that forecast.

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