What happened

Off-price retailer TJX Companies (TJX 0.54%) trailed market last month with its 11% decline compared to a 1.8% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

Long-term shareholders weren't hurt much by the drop, though, considering the stock is still up over 20% so far in 2018 compared to a 1% uptick in the S&P 500.

Two women shopping for clothes.

Image source: Getty Images.

So what

TJX Companies announced solid third-quarter results last month that showed positive momentum heading into the holiday shopping season. Sales growth sped up to 7% from 6% in the prior quarter even though management had predicted a slowdown. Its core TJ Maxx and Marshall's stores logged their 17th consecutive quarter of positive customer traffic, too. Investors were apparently hoping for a bit stronger results, however, and sent the stock lower immediately following the report.

Now what

Like most of its retailing peers, TJX is seeing increased costs in areas like freight and labor pressure profitability. Those trends are being more than offset by strong sales growth, though. Stepping back, the company believes it will end 2018 with sales growth of about 5%, which would mark a significant boost from the 1% to 2% increase executives had targeted at the start of the year. The gain would make 2018 TJX's 23rd consecutive year of sales growth, in a streak that says a lot about its flexible, price-based retailing approach.