The back-to-school shopping season has just ended. In a blink, we'll be shopping for the holidays. That's should add up to a lot of shopping - but we'll see how secure consumers are feeling about their finances. Shopping patterns offer great insight into the state of consumers, who are the backbone of the U.S. economy (accounting for two-thirds of GDP). It's still a little early for some of the bigger industry groups to put out their holiday estimates, but we do have some data points to consider. Overall, the National Retail Federation expects retail sales to increase 2.5%-3.5% for the entire year. Stastista expects a 4% increase in holiday sales for 2024 compared to 2023. eMarketer forecasts a healthy 4.8% rise in holiday sales compared to last year. Salesforce predicts a 2% increase in 2024 holiday sales, which is still growing but at a slower pace than the 3% logged last year. In sum, consumer spending growth could be between 2%-5% this holiday period. Meanwhile, Forbes notes the following particulars about this upcoming holiday season: 1) it is shortened, with only 27 days between Thanksgiving and Christmas; 2) past presidential election years have shown a dip in spending leading up to and following the election; and 3) Walmart and Amazon account for roughly 38% of total retail growth, presenting a challenge for other retailers. The following is a list of BUY-rated stocks in Argus' Universe of Coverage. These represent companies that are leaders in the retail industry. Some of these stocks are also in various Argus portfolios.

TJX Companies is the leading off-price retailer of apparel, accessories, and home merchandise in the United States. The firm leverages its more than 21,000 global vendor relationships to procure and sell brand-name merchandise at prices 20%-60% cheaper than conventional retail channels. TJX opportunistically purchases excess inventory that stems from manufacturing overruns and retail closeout sales. The off-price retailer disperses its vast and disparate merchandise across its 5,000 global stores, creating a treasure-hunt shopping experience for consumers. Over three quarters of TJX’s sales are derived from the United States, primarily via the T.J. Maxx, Marshalls, and HomeGoods banners. About 10% of sales are from Canada and 12% from Europe and Australia.

The Bureau of Economic Analysis (BEA) will update its forecast for GDP this morning. Last month, in its initial estimate, the BEA indicated that 2Q GDP grew at an annualized 2.8% pace. We expect that to hold -- though we note that from 1996 through 2022, the average revision from the advance estimate to the second estimate was plus or minus 0.5%. Key drivers behind the 2Q GDP increase included consumer spending (personal consumption expenditures), which continued at a respectable 2.3% annualized growth rate and contributed 1.57 percentage points to overall GDP expansion. Consumption of goods rose 2.5% and added 55 basis points (bps) to growth. The durable goods component rebounded from a weak 1Q, growing 4.7% in 2Q and adding 35 basis points to output. The big services category was solid, rising 2.2% and contributing 1.02 points to GDP growth. A surprising contributor to 2Q growth was gross private domestic investment, which grew 8.4% amid restrictive monetary policy and added 1.46 percentage points to GDP. Residential investment slumped after a strong 1Q, but nonresidential investment grew 5.2%; the equipment category was up 11.6% with contributions from transportation equipment and information processing equipment. Intellectual property products grew 4.5%. Inventory investments added 82 bps to GDP. Net exports subtracted 72 bps. The trade deficit doesn't worry us because it suggests the U.S. economy is strong. The Atlanta Fed's GDPNow report is calling for 3Q24 growth of 2.0% based on the August 26 update. The New York Fed Staff 3Q Nowcast was 1.94% on August 23. The Weekly Economic Index tracked by the Federal Reserve Bank of Dallas is based on 10 daily and weekly indicators that track consumer behavior, the labor market, and production. If an index value of 2% persisted for an entire quarter, the index would suggest that quarter's GDP would be 2% higher than a year ago. For the week ended August 17, the index was 2.32%, with a 13-week moving average of 2.01%. Our 3Q estimate is 1.5%.

TJX Companies Inc. sells name-brand merchandise at discounted prices. The company operates 5,000 stores, with 3,585 T.J. Maxx, Marshalls, HomeGoods, Homesense, and Sierra stores in the U.S., 566 stores in Canada, and 803 stores in Europe and Australia. In FY20, the company posted sales of $42 billion, which dropped to $32 billion in FY21 and rebounded to $48.5 billion in FY22, FY 23 sales were $49.9 billion and FY24 sales were $54 billion. Clothing and footwear is the major product category, at 48% of sales. Jewelry and accessories represent 17% and home products represent 35%. The company, based in Framingham, Massachusetts, has approximately 329,000 associates worldwide and more than 21,000 vendors sourcing products from over 100 countries. E-commerce represents less than 3% of sales. The HomeGoods division in the U.S. represents approximately 17% of company sales. 'Home fashions' represent approximately 35% of enterprise revenue (clothing represents 47% and jewelry and accessories 18%). Much of the 'home' merchandise consists of accessories, gift items, products for kids, and even packaged food. The HomeGoods and Homesense businesses have more 'big' items like lamps, furniture, and rugs than T.J. Maxx and Marshalls. Based on the company's reported segments, the U.S. represents almost 80% of sales and Canada about 10%. The International segment accounts for 13% of sales (12% Europe, 1% Australia). We don't have a revenue breakdown in Europe, but approximately 60% of the segment's stores are in the U.K, 23% are in Germany, and 7% are in Poland. The rest are in Ireland, Austria, and The Netherlands. The company's fiscal year ends on the Saturday nearest to the last day of January. FY24 was a 53-week year. FY25 will end on February 1.