The news: TJX is confident its value proposition will resonate with shoppers this holiday season, as it has for the last several years.

• Q4 is already “off to a strong start,” CEO Ernie Herrman said, following a better-than-expected Q3, in which sales rose 7%.
• The retailer raised its full-year forecast as a result: It now expects comparable sales growth of 4%, outpacing estimates for a 3.4% increase. Expected earnings per share of $4.63 to $4.66 also exceeds the consensus estimate for $4.61.

The big picture: As TJX and other retailers have repeatedly pointed out this year, off-price is one of the few retail sectors that thrives in times of uncertainty.

• Few retailers can compete with TJX’s value proposition—particularly its range of good-better-best merchandise, which appeals to shoppers of all budgets—and its treasure hunt experience.
• Weak demand for full-price apparel and accessories creates plenty of buying opportunities for TJX and its competitors. Herrman noted that the “availability of quality branded merchandise has been exceptional,” ensuring a steady flow of fresh inventory into stores—and a steady flow of shoppers looking to unearth deals.
• Off-price retailers like TJ Maxx and Marshalls also attract an extremely wide audience that spans income levels and age groups, insulating them somewhat from the current pressures facing low-income and younger consumers.

Our take: TJX’s continued momentum shows that retailers that can offer a compelling combination of value and fun stand to outperform this holiday season.

At the same time, off-price’s growing share of the apparel market could force brands to consider it as more than a liquidation channel for unsold goods.