Despite rising inflation and supply chain constraints, the retail industry has performed well due in-part to increasing consumer discretionary spending. And we believe popular retail companies TJX Companies (NYSE:TJX) and Bed Bath & Beyond (BBBY) should benefit because the demand for retail goods is expected to remain strong ahead of the holiday season. But which of these stocks is a better buy now? Read more to find out.Framingham, Mass.-based TJX Companies, Inc. (TJX) and Bed Bath & Beyond Inc. (BBBY), which is headquartered in Union, N.J., are two prominent players in the retail industry. TJX operates as an off-price apparel and home fashions retailer that sells family apparel, home fashions, fine jewelry and accessories, and other merchandise worldwide. It operates through four segments—Marmaxx; HomeGoods; TJX Canada; and TJX International. BBBY operates a chain of retail stores that sells domestic merchandise, home furnishings, consumables, and various juvenile products internationally. It also operates Decorist, an online interior design platform that provides personalized home design services.
Despite the recent resurgence of COVID-19 cases, rising inflation, and supply chain disruptions, retail sales rose for two straight months—0.9% in August and 0.7% in September. An expected increase in consumer spending ahead of the holiday season, supported by an improving job market, should further drive the industry’s growth. With increasing foot traffic at brick-and-mortar stores ahead of a holiday season, the National Retail Federation (NRF) expects holiday sales to rise between 8.5% -10.5% during November and December. The global retail industry is expected to grow 7.2% in 2021. So, both BBBY and TJX should benefit.
While BBBY has declined 60.3% in price over the past nine months, TJX has surged 2.3%. TJX is a clear winner with 26.6% gains versus BBBY’s negative returns in terms of the past year’s performance. But which of these stocks is a better pick now? Let’s find out.