HomeGoods' Comp Decline? No Sweat For TJX, Says Analyst - Here's Why - TJX Companies (NYSE:TJX)

Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on the shares of TJX Companies Inc TJX with a price target of $95.
TJX reported 1Q23 EPS of $0.76 versus $0.68 last year, ahead of the consensus and total sales rose 3.3% to $11.783 billion near the high-end of guidance of $11.7 billion - $11.8 billion.
The pre-tax profit margin expanded 90 bps to 10.3%, beating the consensus of 9.5% (up 10 bps) and guidance of 9.2%-9.5%.
During the quarter, MarMaxx saw continued strength in apparel and accessories, as well as positive Traffic, said the analyst.
On the flip side, HomeGoods' comp declined 7%, on top of a 7% decline last year, as the banner and home space continue to be pressured following extraordinary growth during the pandemic.
Overall, the analyst continues to be impressed by the company's execution amid a challenging macro environment.
TJX's gross margin benefited from lower freight costs, which the analyst thinks should continue to act as a tailwind.
The analyst noted that TJX is one of the few retail companies raising its outlook for FY23 following stronger-than-expected results in the first quarter.
Price Action: TJX shares are trading lower by 0.24% at $78.03 on the last check Wednesday.