CNBC’s Jim Cramer said Wednesday that TJX, the owner of TJ Maxx, is “the best guy right now” in a disadvantaged retail industry. He didn’t have much praise for Target. Mr. Cramer’s comments came after the companies reported vastly different earnings stories before the opening bell rang on Wall Street. TJX, which also owns the Marshalls and HomeGoods chains, delivered better-than-expected profits and sales in the third quarter. CEO Ernie Herman said the holiday season was off to a “strong start”. TJX stock hit an intraday high before the rally lost momentum. S&P 500 stocks are up about 22% since the beginning of the year; Kramer praised TJX’s ability to offer “very good value” at a time when consumers are still very price sensitive. “Everyone who goes into these stores says, ‘I can’t believe the prices,'” he added, adding that TJX’s current operating structure has a “2019 feel,” referring to the pre-COVID-19 retail environment when foot traffic and demand were stronger and more predictable. “I go there on my days off, and everyone expects me to go to a very expensive store,” Kramer said. Its operational strength has led to TJX emerging as a market leader. The company, which is a holding in the CNBC Investing Club portfolio, currently has a market capitalization of approximately $160 billion, four times Target’s $40 billion valuation. TJX TGT YTD Mountain TJX and Target’s year-to-date results On Wednesday morning, Target posted a decline in third-quarter sales and lowered the high end of its full-year profit outlook. The company has reported declining same-store sales for five consecutive quarters. The stock is down 32% since the beginning of the year. Incoming CEO Michael Fidelke hasn’t had a chance to impress Target yet. Fidelke, Target’s chief operating officer and former chief financial officer, will become CEO on February 1. The company announced in August that he would replace longtime CEO Brian Cornell. Fidelke declined to say on the earnings call when the company’s sales would become positive again, but said Target is making progress. Mr. Kramer said Mr. Target’s comments were not what he wanted to hear, noting that the company is still grappling with operational challenges and has not yet reflected Mr. Fidelke’s vision. Kramer added that Target’s stores are “under-invested” and management needs to put more money into the stores to restore the strength that once drove the brand. For now, Kramer said, “TJX is operating at a level that other companies in the retail industry need to catch up to.”
