New Price Target for TJ Maxx Parent After Latest Retail Sales Update

Let’s walk through the July Retail Sales report, the one that showed headline spending on retail and restaurants rose 3.9% year over year, as well as 3.9% for the three months ending in July on the same basis.

Focusing on retail-only sales, those figures were 3.7% and 3.5%, respectively, with the latter explained by the revised 4.0% year-over-year jump in May retail-only sales.

While the July headline figure matched the market forecast, we admit that, even though the innards of the report are rather supportive for our positions in Amazon AMZN, Costco COST, TJX TJX and American Express AXP, we’ll be interested in seeing the degree of pull-forward spending due to Prime Day 2025 and competing events when we review the August Retail Sales report.

Our thinking is that averaging the two reports will give us a clearer indication of how consumer spending is tracking in the current quarter. We’ll do the same with the July and August Personal Spending reports, which will bring insight into consumer service spending.

In our view, that will prove much more insightful for our shares of Dutch Bros BROS and American Express. With BROS shares coming up on support near the 200-day moving average ($61.34), we are watching the shares closely with an eye to adding more.

By the numbers:

Non-store retail sales, the Census Bureau’s wink-wink line item for digital shopping, rose 8.0% year over year in July, accelerating from 5.2% in June. Again, no surprise, given the July digital shopping events we’ve discussed multiple times in the last few weeks.

Clothing retail sales rose 5.0% in July, up from 4.7% in June and even more so compared to May. We see this benefiting Costco to some degree, but TJX more so. The 4.5% year-over-year print for clothing sales in the July quarter, and 11.1% print for miscellaneous stores, sets up TJX’s earnings report next week. Measured against consensus estimates looking for TJX to grow its July quarter revenue 5.1% compared to year-ago levels, we see room to nudge our TJX price target to $140 from $137. We’ll review that new target again as we contemplate TJX’s outlook for 2H 2025.

Circling back to Costco, let’s recall that its adjusted U.S. comp sales for July came in at 6.5% and its e-commerce sales came in at 14.9% on the same basis. More confirmation that this membership-driven warehouse company continues to win consumer wallet share, and that keeps us bullish on the shares headed into the holiday-filled 2H 2025. That should drive a seasonal pick-up in spending as Costco also recognizes more of an impact from last year’s membership price hike that went into effect on September 1, 2024.

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At the time of publication, TheStreet Pro Portfolio was long AMZN, COST, TJX AXP and BROS.