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Key Takeaways
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The parent companies of TJ Maxx and Ross Dress for Less are slated to share first-quarter results this week, offering investors clues about how tariffs are impacting discount retailers.
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Import taxes may increase this sector's costs, but they may also spur demand if consumers grow more budget-conscious, analysts said.
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Investors will also be watching what Burlington Stores, Dollar General and Dollar Tree have to say about tariffs.
How are discount retailers doing in the Trump tariff era? We'll learn more this week, when the parent companies of TJ Maxx, Marshalls and Ross Dress for Less report their latest earnings.
Investors have been considering whether import taxes will be a net negative or positive for the off-price sector. Retailers may have to spend more to stock their shelves, analysts have said, but if tariffs broadly push up prices, consumers may rely more on discount stores.
TJX Cos. (TJX) parent company of TJ Maxx, Marshalls and Home Goods, is slated to release its first-quarter results Wednesday morning. UBS analysts expect TJX to trim its earnings per share outlook for 2025, but said the retailer can likely mitigate the impact of tariffs through price increases and other strategies.
“We anticipate consumers increasing shopping dollars towards TJX’s businesses for its favorable value proposition as tariffs drive price increases across the broad retail landscape,” UBS wrote last week.
Foot traffic rose 3.8% year-over-year at T.J. Maxx and 3.3% at Marshalls in the most recent quarter, according to Placer.ai, a firm that tracks store visits. Traffic grew more modestly—0.5%—at Ross Dress for Less, but still outpaced the full-price apparel industry, where visits fell 3.2% year-over-year in the first quarter, Placer.ai said. Ross' parent company, Ross Dress (ROST), is scheduled to publish its first-quarter figures Thursday afternoon.
Burlington Stores (BURL) saw a more significant uptick in traffic—6.5%—per Placer.ai. It's slated to release its first-quarter results before the bell on May 29th.
Analysts are also eyeing trends at dollar stores. Tariffs may improve sales at Dollar General (DG), which sells a lot of food and consumables, Morgan Stanley said Monday. Over the past six months, Dollar General has seen an uptick in business from consumers across the income spectrum, analysts said.
The import taxes may have a similar impact at Dollar Tree (DLTR), Morgan Stanley said. But they could be more of a headwind if Dollar Tree's incorporation of higher-priced goods winds up deterring cost-conscious consumers, the analysts added.
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