TJX Companies (NYSE:TJX) has a retailing approach that works across a wide range of economic environments. Lately, its value-based selling model has helped deliver healthy sales gains and steady profitability at a time when many of its full-price peers are struggling.

Investors are expecting the good news to continue when the owner of the Marshalls, T.J. Maxx, and HomeGoods chains reports its fiscal 2019 second-quarter earnings results on Tuesday. Below, we'll preview that highly-anticipated report.

Two women shop for shirts.

Image source: Getty Images.

Sales are headed higher

There are a few competitive assets that set TJX Companies apart from rivals, including its deep experience in acquiring off-price merchandise, its flexible selling format, and its huge store footprint. These characteristics have helped the company grow comp sales for 22 consecutive years, which is a much longer streak than peers like Target can claim. The retailer has also delivered healthy customer traffic growth, with shopper volume rising in each of the last 15 quarters.

Investors will be looking for extensions of both of those trends on Tuesday. In its fiscal first quarter, TJX Companies posted a 3% comparable-store sales increase, powered by a 4% comp sales spike from its core Marshalls and T.J. Maxx brands. The company also experienced customer traffic growth across each of its four divisions. More gains on these metrics in the second quarter would show that the retailer is still finding ways to soak up market share in a highly competitive industry. Management is targeting more modest comp sales gains of between 1% and 2% this quarter.

Pricing power

TJX Companies entered last quarter in what management described as an "excellent inventory position." For this off-price seller, that means its stores were stocked with just the right levels of fresh, high-quality merchandise that it believed would appeal to its core shopper demographics.

We'll find out on Tuesday whether that strong positioning translated into healthy profit margins. For context, in the first quarter, gross profit margin held steady at 29% of sales, and operating margin ticked up slightly to 11% of sales.

TJX Operating Margin (TTM) Chart

TJX Operating Margin (TTM), data by YCharts. TTM = trailing 12 months.

Just like many of its peers, TJX Companies is spending more on wages and on building out its e-commerce infrastructure these days. However, its pricing power -- and the corporate tax cuts that were instituted in December -- have cushioned its earnings so far.

The updated outlook

CEO Ernie Herrman and his team left their fiscal 2019 sales targets in place last quarter, saying they still expect comparable store sales to rise by between 1% and 2%. That would give the company its 23rd straight year of positive comps, which is a testament to its ability to adapt to a wide range of retail environments.

Yet if that forecast holds up, it will also mean that sales growth would have decelerated for the second year in a row. Comps jumped 5% in fiscal 2017, after all, before slipping to a 2% increase last year.

Strengthening sales trends over the last few months might convince management to lift that outlook, though, so I wouldn't be surprised to see TJX Companies update its forecast with more aggressive revenue and earnings targets on Tuesday.