Why TJX (TJX) Stock Is Trading Up Today

Kayode Omotosho /
2023/08/16 1:48 pm EDT

What Happened:

Shares of off-price retail company TJX (NYSE:TJX) jumped 5.18% in the morning session after the company reported second quarter earnings results that beat analysts' expectations for revenue and earnings per share, driven by strong outperformance in same-store sales due to "customer traffic, which increased at every division." Free cash flows also came in strong, up significantly compared to the same period last year and exceeding forecasts by a wide margin. 

Additionally, the company demonstrated its commitment to shareholders by returning $932 million. This was accomplished through the repurchase of $550 million worth of TJX stock and the distribution of $382 million in shareholder dividends during the quarter. 

Looking ahead, guidance was impressive, with the company lifting its full-year guidance for comparable store sales, pretax profit margin, and earnings per share. Management also offered some bullish updates on the current quarter, adding, "The third quarter is off to a very strong start, and we are seeing tremendous off-price buying opportunities in the marketplace." Overall, it was a positive quarter for the company. 

After the initial pop the shares cooled down to $89.24, up 4.08% from previous close.

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What is the market telling us:

TJX's shares are not very volatile than the market average and over the last year have had only two moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

TJX is up 12.9% since the beginning of the year. Investors who bought $1,000 worth of TJX's shares five years ago would now be looking at an investment worth $1,790.

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