TJX (TJX 1.35%) has silently outperformed the S&P 500 (^GSPC 1.52%) with a 28% gain this year and a 129% return over the past five years. The discount clothing retailer owns T.J. Maxx, Marshalls, HomeGoods, Sierra, and other stores.
Everyone needs clothing and home goods, and many of those people look for discounts. That formula has worked for the company ever since T.J. Maxx was founded in 1976.
However, past success isn't a guarantee of future outcomes. These are some of the details investors should monitor heading into 2026.
T.J. Maxx and Marshalls dictate the stock's success
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While the parent company has a few brands under its name, T.J. Maxx and Marshalls do the heavy lifting. These two brands, grouped together under the term "Marmaxx" in financial results, make up most of its total sales. The U.S. Marmaxx division brought in roughly 60% of total Q3 FY26 sales. That doesn't include TJX Canada or TJX International, which made up a combined 23% of total sales.
NYSE: TJX
Key Data Points
Luckily, Marmaxx continues to do well. The U.S. segment grew by 7% year over year, while its Canadian and international segments were up by 8% and 9% year over year, respectively. The company retains U.S. market share while accelerating growth in other markets. That's a good sign for long-term success, especially with HomeGoods sales also up by 8% year over year.
Comparable sales are another key metric for Marmaxx. The parent company saw a 5% increase in comparable sales, which means customers are regularly returning and increasing their order sizes.
Economic conditions may prompt consumers to save more money
TJX offers essential products at low prices, and that combination attracts more shoppers during economic slowdowns or periods of high living costs. Fewer jobs were added than expected in November, and the unemployment rate crept up from 4.4% to 4.6%. However, core inflation dropped to 2.6% year over year, which was far better than the expected 3% year-over-year increase.
TJX can also perform well in a strong economy, as investors have seen over the past five years. Pricing becomes more significant when consumers have tight wallets, and TJX's prices can continue to edge out competitors.
TJX can also benefit from the growing clothing reselling trend, where people buy clothing at discount stores and hope to flip them on sites like eBay. Gen Z has also embraced this side hustle, not just as sellers, but also as buyers. Younger generations piling into the trend indicate that it can last for a while and benefit companies with exposure, including TJX.
You don't have to pick an AI stock to beat the market. TJX has been a reliable pick for many years because it offers products that people will always need. That makes it a compelling option heading into 2026, especially if its comparable sales and revenue continue to grow.
