TJX Companies Q1 Preview: Report Could Reflect Durable Earnings Growth

TJX Companies Inc (NYSE:TJX) is gearing up to report its first-quarter results on Wednesday, May 21.

The reduction in tariff rates on China has come as a "huge relief," given the company's significant vendor exposure to the country, according to TD Cowen.

The TJX Companies Analyst: Analyst John Kernan reiterated a Buy rating, while raising the price target from $140 to $142.

The TJX Companies Thesis: The company could report same-store sales growth of 4%, accelerating from last year's 3% and above the guidance range of 2% to 3%, Kernan said in the note.

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TJX Companies could deliver gross margin expansion of 5 basis points (bps) year-on-year, much better than the guidance of a contraction of 10 bps-20 bps, the analyst stated. He expects the company to report earnings of 93 cents per share, above consensus of 91 cents per share.

The company has some insulation from macro uncertainties due to its "wide demographics, spread of merchandise offered, and strong U.S. gross margin,” Kernan said. "Our field work suggests the buying environment post Liberation Day is improving, and management’s confidence in inventory availability is rising," he further wrote.

TJX Price Action: Shares of TJX Companies had declined by 0.38% to $134.60 at the time of publication on Tuesday.

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