TJX Companies Q2 2023 Earnings Soar: Sales Up 67%, Stock Hits $88.07B Market Cap

The TJX Companies, Inc. (TJX) delivered an outstanding second quarter in 2023, reporting a 67% surge in net sales that exceeded Wall Street projections and boosted off-price apparel and home fashion stocks.

TJX, the parent company of popular brands like HomeGoods, TJ Maxx, and Marshalls, posted earnings of 64 cents per share in Q2, a significant turnaround from a loss of 18 cents per share in the same quarter last year. Analysts had anticipated earnings of 58 cents per share. The company reported net sales of $12.08 billion, surpassing the expected $11.2 billion and reflecting strong consumer demand.

Highlights to Note

• Off-price retail stocks climbed following TJX's impressive earnings that beat both revenue and profit forecasts.
• TJX shares broke out from a symmetrical triangle pattern on high volume, signaling strong institutional buying interest.
• Ross Stores, Inc. (ROST) also experienced a rally, bouncing off a 10-month trendline and the 200-day moving average on heavy trading volume.

TJX's open-only comparable-store sales metric, which compares sales at stores open during Q2 2023 to the same days in fiscal 2020, rose 20%. The HomeGoods segment led growth with a 36% year-over-year increase, reflecting continued consumer focus on home-related spending amid evolving work-from-home trends.

Management noted that temporary COVID-19 related store closures in Europe, Canada, and Australia negatively impacted revenue by approximately $300 million to $350 million and reduced earnings by 5 to 7 cents per share. However, stores in the U.S., Canada, and Europe are now fully operational in the current quarter. As of June 2023, TJX's market capitalization stands at $88.07 billion with shares up 6.9% year-to-date and offering a 1.5% dividend yield.

Following the earnings release, TJX shares surged after retesting the upper trendline of a symmetrical triangle, supported by above-average trading volumes that indicate strong investor confidence. Traders aiming to capitalize on this momentum should consider setting initial stop-loss orders at the midpoint of the previous day's range and trailing stops below each successive higher low to protect gains.

Trading Insight

A wide-ranging trading day features a stock price fluctuating significantly between its high and low points, often signaling increased volatility and trading opportunities.

Similarly, competitor Ross Stores, Inc. (ROST), operator of Ross Dress for Less and dd's DISCOUNTS, posted strong gains following TJX’s report. Let’s examine Ross’s upcoming earnings outlook.

Ross Stores, Inc. (ROST) Q2 2023 Preview

Ross Stores is expected to report Q2 earnings of 94 cents per share on $4.43 billion in revenue, a marked improvement from a 18-cent loss on $2.7 billion sales in June 2020. The company anticipates sustained sales momentum fueled by pent-up consumer demand throughout the year. As of mid-2023, ROST trades at $124.05 with a market cap of $44.3 billion and a modest 0.92% dividend yield, marking a 1% gain year-to-date.

On heavy volume, Ross shares recently bounced off a 10-month trendline and the 200-day simple moving average, indicating strong buyer conviction. Active traders should consider setting profit targets near the key resistance level of $132 and protect capital by placing stop-loss orders just below the ascending trendline.

Trading Tip

Setting a profit target helps investors lock in gains by predefining an exit price, a crucial strategy for managing risk in volatile markets.

Note: The author held no positions in TJX or ROST at the time of publication.

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