Cowen Remains Bullish on TJX Cos. (TJX) Following 3Q
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Cowen reiterated an Outperform rating and $85.00 price target on The TJX Companies (NYSE: TJX) following the company's 3Q earnings report. TJX noted strong comp momentum of +5% at Marmaxx in 3Q was primarily driven by traffic with unit sales also up, while avg. ticket was down slightly more than planned. However, Cowen interprets the loss in ticket sales as an outcome of TJX’s ability to strategically chase into categories that were more popular than outerwear. TJX delayed higher ticket categories such as outwear and knit sweaters due to warmer weather. Costs did go up given the costs associated with lower average ticket; however, merchandise margins were strong on both mark-on and mark-down rates.
Analyst Oliver Chen commented, "TJX’s off-price principles and execution still shine and include: buying close to need, strong traffic, agile/lean inventories vs. sales, and both buying leverage/strategies that garner consistent customer interest + up merchandise margins. TJX has done a good job managing expectations for wage and F/X pressure."
Shares of The TJX Companies closed at $74.22 yesterday.
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