With earnings coming up on August 20, TJX (TJX) - Get Report investors will be anxious to figure out how much a potential 10% to 25% additional tariff on apparel coming into the U.S. from China would impact future earnings.
The answer? Not much.
That' according to D.A. Davidson & Co. analysts.
"Given the indiscriminate sector sell-off, we would be buyers of the off-pricers (BURL) - Get Report and TJX," the analysts wrote in a note out when TJX and Burlington were down roughly 5% from July 31, the last day of trading before Trump made the tariff threat. Now, TJX is down 2.5% since July 31, so a solid earnings report could lift the stock considerably.
Plus, off-priced players like TJX could buy inventory from full-priced players that see supply chain disruption and higher cost of revenue as a result of the tariffs. "If anything, off-price retailers could benefit from tariff disruption, which can free-up buying opportunity from the full-price channel due to inventory disruptions," Davidson said.
Investors may want to tune into TJX management's commentary on how tariffs would impact the company on the August 20 earnings call.