The TJX Companies Inc "UBS Evidence Lab Inside: Survey Supports Durable..."

Research evidence excerpt

The TJX Companies Inc "UBS Evidence Lab Inside: Survey Supports Durable..."

customers expect a +14% net increase in shopping frequency over the next 12 Q3E 1.40 1.35

months versus -1% for the overall retail survey average (Fig. 2), implying a ~15- Q4E 1.57 1.50

point relative demand advantage. This forward-looking indicator is critical. Traffic 01/27E 5.40 5.23

is the primary driver of off-price comps and this spread signals TJX’s share gains are 01/28E 6.00 5.76

not only ongoing but also likely to accelerate. This directly supports a multi-year 01/29E 6.65 6.33

growth outlook consistent with a double-digit EPS CAGR, in our view.

Jay Sole

Assortment advantage is widening materially and reinforcing the moat: Analyst

“Large variety of merchandise and selection” as a reason to shop TJ Maxx surged jay.sole@ubs.com

to 78% in the latest survey wave (Fig. 10), up sharply from 44% in Wave 8 and just +1-212-713 3559

37% in Wave 6 (Fig. 10). This step-change is key. Assortment breadth is one of the Mauricio Serna, CFA

top decision drivers (62% importance, Fig. 13). The magnitude and acceleration of Analyst

this increase indicate TJX is improving its core competitive advantage in real time, mauricio.serna@ubs.com

not just maintaining it. This directly supports sustained traffic growth and share +1-212-713 9028

gains, as it strengthens the “treasure hunt” proposition Department Stores Natalie Koltermann

structurally cannot replicate. Please find more detail inside. Associate Analyst

natalie.koltermann@ubs.com

Valuation: Our $197 price target is based on 30x our $6.65 FY29 EPS estimate: +1-212-713 4229

Our DCF analysis also points to a $197 PT. Please see more detail here (link).

Highlights (US$m) 01/24 01/25 01/26 01/27E 01/28E 01/29E 01/30E 01/31E