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Will TJX Be Retail's Winner This Earnings Season?

"I get the sense that retailers are a little spooked, but they're just being cautious. We could end up having a better back half than they are expecting," Driscoll says. "All that just really helps T. J. Maxx because it gives them inventory flow. If all of a sudden Macy's and Nordstrom says we can't take this, T.J. Maxx will buy it and put it on the floor at a great deal."

Patricia McKeever, managing director at MKM Partners, adds to the argument that the company continues to increase its market share, even in the sluggish consumer environment.

"We note that while TJX's same-store sales have risen between 4% and 7% in each of the past four years, company research suggests three quarters of the U.S. population hasn't shopped a T.J. Maxx or Marshall's store over the past year or so. We view this as a big opportunity," McKEevere wrote in a note on Thursday. Sh rates TJX a "buy."

Additionally, the company has been successful at attracting a younger customer, likely in the 25 to 39 age range.

"Overall, we believe TJX is still in a sweet spot with the consumer, as the company's somewhat better-off customer (vs. the typical discount store shopper) has greater capacity to spend vs. last year (stock market, housing recovery helping), yet remains intensely focused on value. We think solid trends have continued into 3Q13," the MKM Partners note said.

Not to be discounted, the home furnishings category has been one of the best performing sales categories all year. And when you have customers taking to social media with Tweets like the two examples below, TJX's strong hold on the off-price home décor and furnishings market gives it an additional leg up.

TJX's stock is up 20% for the year versus the S&P Retail Select Industry Index, up 27% for the year, of which it is a constituent of the index. The stock was trading up 0.6% to $50.81 on Monday.

"The general slowdown in specialty and department store sales has resulted in abundant buying opportunities in the marketplace and we believe off-pricers like TJX are well positioned to capitalize on those opportunities.," Jennifer Davis of Lazard Capital Markets wrote in a note on Friday. Davis has a "buy" rating on TJX.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

>To submit a news tip, email: tips@thestreet.com.



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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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