TJX Companies seamlessly became the leading retailer in its off-price category through its operational acumen and tenured inventory management expertise. TJX could also benefit in 2025 in the event of trade tariffs from the incoming Trump administration. Year-to-date performance: up roughly 29% Forward price-to-earnings multiple: 27.2 versus a five-year average of 24.1 Our rating: 2 rating Our price target: $135 a share TJX YTD mountain TJX year to date performance. ’24 look back TJX — the company behind T.J. Maxx, Marshalls, and HomeGoods — has been a major standout in off-price retail in 2024. Since the start of the year, TJX has been posting positive customer traffic that remained consistently strong throughout 2024, capping the year with a robust Black Friday and holiday shopping season. That’s why the stock is one of the Club’s 12 core holdings heading into the new year. TJX proved it was a high-quality operator and a great way to play the off-price theme as inflation-pinched consumers maximized budgets by prioritizing value through trading down to less expensive items. The company has also been successful in attracting consumers across income and age demographics while continuing to draw new and younger consumers through its range of assortment of different brands at bargain prices. The company’s merchandising strategy — buying products from its 21,000 constantly evolving vendors based on available merchandise and industry trends — allowed management to effectively provide a fresh flow of assortments in stores and online. This strategy increased customer loyalty and drove repeat customers — allowing TJX to gain market share in the off-price retail channel and ultimately leading to strong comparable sales and a higher operating margin profile. This business model also resonated with consumers globally as TJX increased investments in two international off-price retailers this year, one in the Middle East and another in Mexico. ’25 look ahead TJX should continue to drive comparable sales growth in off-price retail in 2025 as consumers continue to spend on a budget and seek ways to maximize value. As management continues to seek unique buying opportunities from bloated department stores’ inventories, the company’s more than 5,000 stores should remain popular shopping destinations. Home decor vertical HomeGoods remains a big opportunity as TJX expands its vendor base internationally to offer diverse products. If there’s some relief in the housing market, HomeGoods should see additional upside as consumers furnish their new homes. Jim Cramer believes TJX could be a tariff-defensive stock for 2025 since direct imports are a small portion of the business and TJX sources from a variety of vendors across different countries. A defensive stock tends to perform in all kinds of economic climates. In the event of tariffs, supply chain disruptions could develop in the coming year. If that happens, TJX will become a natural buyer of merchandise at cheaper prices. The thinking is that supply chain disruptions will add complexity to managing inventory for traditional retailers that order directly from China. As a result, they may over-order ahead of time to protect against future disruptions and risk being stuck with excess that plays right into TJX’s hands. Another reason for TJX potentially being insulated from tariffs is its diverse category exposure. TJX’s business model provides flexibility since it doesn’t buy inventory too far out in advance. Plus, if some retail categories are impacted by tariffs next year, TJX management said it will make prices proportionally lower, which should keep shoppers engaged. Management’s international ambitions should help accelerate overall sales and margin and position the company to keep its lead as the industry’s top off-price retailer. (Jim Cramer’s Charitable Trust is long TJX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
An exterior view of a T.J. Maxx store in Selinsgrove.
Paul Weaver | SOPA Images | Lightrocket | Getty Images
TJX Companies seamlessly became the leading retailer in its off-price category through its operational acumen and tenured inventory management expertise. TJX could also benefit in 2025 in the event of trade tariffs from the incoming Trump administration.