Shares of TJX Companies are under pressure following a rare miss in the off-price retailer’s largest business. The sell-off could create a buying opportunity. TJX stock is now down roughly 6% since the company reported after-hours results Wednesday. The main culprit: Comparable sales at its Marmaxx segment, which includes TJMaxx, Marshalls and Sierra retail chains, rose only 1% for the company’s fiscal second quarter of 2027, well short of the 3% growth expected by analysts. Shares are now down 16% since their record high hit on June 13. CEO Ernie Herrman called the quarter’s misstep “self-inflicted and within our control” during the post-earnings webcast Thursday. The issue, he said, came down to not having the “right goods at the right stores at the right time.” We appreciate the accountability and trust that TJX “has the fix in place,” said Club portfolio director Jeff Marks during Thursday’s Morning Meeting. Herrman and team said they are already seeing improvement in August. “If that continues through the quarter, it should be TJX getting back to its old ways,” he said. Despite the softer performance in Marmaxx, there was a lot to like in TJX’s report and what management had to say. Overall revenue increased 5.4% year over year to $15.18 billion, edging out the $15.17 billion consensus estimate, according to LSEG. Earnings per share (EPS) increased 10.9% to $1.22, exceeding expectations of $1.19. We’re restricted from purchasing the stock on Thursday, but Jeff Marks said we will look to add to our position on Friday or early next week. We maintain our $180 price target and buy-equivalent 1 rating on the stock. TJX YTD mountain TJX stock performance YTD. Some Wall Street analysts are less willing to look past the miss. Citi downgraded TJX from buy to neutral and lowered its price target from $182 to $154, calling Marmaxx’s performance “weak and disappointing” in a note to clients Thursday. Analysts said they couldn’t ignore the fact that TJX’s largest business segment “is being outcomped by off-price peers.” Ross Stores , for example, posted 17% comparable sales in the first quarter compared to 6% for Marmaxx. Ross reports earnings after the close Thursday, and analysts expect it to outperform TJX and Burlington . Gordon Haskett also downgraded TJX to hold from buy Thursday with a $155 price target. The firm cited a “concerning slowdown” at Marmaxx as the culprit of the lower re-rating, noting the quarter represented the weakest comparable sales performance for the segment in four years. Analysts added the performance raises concerns that Ross Stores and Target have “seeped their way into TJX’s market share.” Other analysts, however, came to TJX’s defense and share our general thinking on the company. “We don’t view this as a prolonged issue,” UBS analysts wrote on Marmaxx’s miss in a post-earnings note Thursday. Instead, they point to the company’s reliable merchandising expertise, which has “successfully corrected similar execution missteps in the past” and already identified impacted categories to remediate the issue swiftly. UBS added that TJX is “capable of taking major market share from Department Store peers over the next few years.” Their confidence comes from the “significant potential” from the company’s new businesses, including HomeSense and Sierra Trading Post, as well as TJX’s international operations. TJX continues to expand into new markets, including its most recent entrance in Spain in the first quarter. UBS sees a “favorable set-up for the stock from here” and is confident it can move toward its $198 price target. That vibes with our investment thesis. TJX has been a reliable off-price retailer that consumers depend on for lower-than-average prices on apparel, home goods, and everyday items at a time when consumers are pressured by stubbornly high inflation. We see Marmaxx’s miss as a one-off and have faith that the company’s team of inventory management experts can right this wrong, given the issue is already under their control and is a matter of having the right mix of inventory to meet existing demand. (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.
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