Walmart vs. The TJX Companies: Which Retailer Has the Edge in 2025?

Globe and Mail

4 hours ago

As consumers prioritize value in today's cost-conscious retail environment, two retail leaders — Walmart Inc. WMT and The TJX Companies, Inc. TJX — have emerged as top contenders for investor attention. WMT leverages its massive scale and low-price strategy to dominate everyday essentials, while TJX excels in the off-price retail segment, offering well-known brands at significant discounts through stores like T.J. Maxx and Marshalls. The key question for investors is: which stock delivers stronger value right now?
Both companies are performing well in a cautious consumer environment, but they operate with very different playbooks. Walmart is investing heavily in technology, logistics, and high-margin initiatives like advertising and memberships to drive growth. The TJX Companies, meanwhile, thrives on agility and treasure-hunt shopping experiences, supported by a global footprint and lean operations.
Let's break down how WMT and TJX stack up across key areas like business fundamentals, growth outlook, valuation and earnings potential — and what it means for investors in 2025.
The Case for WMT
Walmart is delivering steady growth in 2025, driven by its massive retail footprint and ongoing investments in digital innovation. Its successful omnichannel strategy — combining physical stores with a fast-growing e-commerce platform — is helping the company attract consistent traffic across channels. With diversified revenue streams that include brick-and-mortar sales, online shopping, advertising, and memberships, Walmart has built a resilient and scalable business model that is well-positioned for long-term success.
Walmart is gaining momentum from high-margin growth drivers like Walmart Connect, its retail media advertising platform, and Walmart+, its paid membership program. In the first quarter of fiscal 2026, advertising revenues surged 50%, while membership income rose 14.8%. These results highlight Walmart's effective shift toward tech-driven, higher-margin services that boost both profitability and customer retention.
A key driver of Walmart's ongoing success is its advanced omnichannel strategy. The company continues to invest heavily in data analytics, digital infrastructure, and in-store enhancements to create a seamless shopping experience across both physical and online platforms. In the fiscal first quarter, global e-commerce sales grew 22%, fueled by strong demand for store-fulfilled pickup and delivery options. Backing this growth is Walmart's enhanced last-mile delivery network, which is on track to offer same-day delivery to 95% of U.S. households — a major advantage in today's speed-focused retail landscape.
Walmart has entered 2025 on strong footing, but management has cautioned about potential headwinds ahead, particularly from tariffs and broader economic uncertainty. In addition, currency fluctuations may impact performance across international markets. Still, WMT's expanding e-commerce presence, compelling value proposition and rising contributions from high-margin areas offer a solid buffer against short-term volatility and help support long-term growth.
The Case for TJX
The TJX Companies has consistently proven its ability to execute in challenging environments. The company's strength lies in its flexible sourcing, quick inventory turns and international diversification. It is not just about offering low prices — it is about offering premium brands at a discount, a model that continues to resonate with shoppers seeking value and variety.
The company's off-price retail model continues to resonate with a broad customer base, as seen in the steady rise in customer transactions and comparable store sales. In the first quarter of fiscal 2026, TJX's comparable store sales rose 3%, led by higher customer traffic across both apparel and home categories. Growth was consistent across all divisions, including Marmaxx and HomeGoods in the United States, as well as TJX Canada and TJX International, reinforcing the company's strong value proposition.
The TJX Companies continues to build on this momentum through global expansion and digital growth initiatives. It ended the quarter with 5,121 stores, adding 36 new locations during the period. The company is also enhancing its e-commerce presence to capture additional market share as more consumers shop online. Internationally, TJX is growing its TK Maxx banner in Europe and Australia and plans to enter Spain in fiscal 2027. Strategic investments in Grupo Axo in Mexico and Brands For Less in the Middle East are opening new growth avenues in promising global markets.
A key advantage for TJX is its flexible supply chain and healthy inventory position, with total inventory up 15% year over year. This ensures a steady flow of fresh merchandise and supports its treasure-hunt shopping appeal. While near-term challenges like higher payroll costs, tariff pressures, and currency fluctuations may weigh on margins, The TJX Companies is taking proactive steps to mitigate these risks.
How Does the Zacks Consensus Estimate Compare for WMT & TJX?
The Zacks Consensus Estimate for Walmart's fiscal 2026 earnings per share (EPS) has been steady at $2.59 over the last 30 days, suggesting year-over-year growth of 3.2%. In contrast, the EPS estimate for The TJX Companies' fiscal 2026 has moved down by a penny to $4.46, indicating year-over-year growth of 4.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Price Performance & Valuation of WMT & TJX
Over the past 12 months, Walmart stock has delivered an impressive 39.8% return, significantly outpacing the broader S&P 500 Index, which rose 9.5% during the same period. Meanwhile, The TJX Companies has recorded 11% growth in its stock price.
One-Year Price Performance
From a valuation standpoint, Walmart currently trades at a forward price-to-earnings (P/E) ratio of 35.10x. Meanwhile, The TJX Companies trades at a more modest forward P/E of 26.42x.
Bottom Line
Both Walmart and The TJX Companies are well-positioned to benefit from today's value-driven retail environment. While TJX continues to perform well with its off-price model, global store expansion, and solid customer traffic, Walmart's broader revenue streams — including advertising, memberships, and e-commerce — provide stronger earnings visibility and higher-margin growth. With a more consistent EPS outlook, superior stock performance and ongoing investments in digital transformation, Walmart emerges as the more attractive retail stock heading into the second half of 2025.
TJX and Walmart currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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