Quantify the fuel headwind for the back half, the benefit from fuel hedges in Q1, and the offsets.

The differential between the Q1 EPS beat ($0.20) and the flow-through to full year ($0.13) represents the embedded fuel cost. They assume current diesel prices remain flat for the rest of the year. A benefit from fuel hedges was realized in Q1, and if prices rise, more savings would occur; if they fall, there would be a slight hit. They did not parse out specific gross margin components. “we beat our guidance in the first quarter by $0.20, and we're flowing 13 to the year. That differential is the fuel cost that we've embedded into our plan.”

What drives the strong Q1 and raised outlook (value, product, management)? How durable are the comp drivers, and what about new customer acquisition?

It's a combination of product and value, with merchants doing a "terrific job." The company views economic uneasiness as an opportunity to gain market share. New customer acquisition is strong, with a disproportionate number of Gen Z and millennial shoppers, indicating long-term durability. They are bullish on the year and playing offense. “our first time new customers that we're acquiring have been at a disproportionately younger age group relative to the general population.”

Given the success in Spain, Mexico, and Australia, will TJX revisit its 7,000 total store count potential? Are there opportunities for JVs or minority interests in new regions?

Management is internally reviewing the store count numbers and expects to revisit them, feeling "pretty bullish." They are interested in various expansion strategies, including JVs, investments, or new markets adjacent to existing operations, leveraging their talent without distracting the core business. “we will stand by to stand by, I would say, and we'll be back to you on that.”

TJX

TJX Companies (TJX) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Apr 2026 (Q1 FY27)· Consumer Discretionary· May 20, 2026

Source: earnings call transcript

Executive summary

The TJX Companies Q1 FY27 — Strong Comp Sales Across All Divisions Drive Raised Outlook

The TJX Companies delivered excellent Q1 FY27 results, with consolidated comparable store sales up 6% driven by both average basket and customer transactions across all divisions. This strong performance, coupled with effective marketing attracting younger demographics, led to a raised full-year sales and profitability outlook. The company is playing offense by leveraging strong merchandise availability and investing in store experience and associate training, while actively exploring global expansion opportunities.

Highlights

Consolidated comparable store sales increased an outstanding 6% in Q1 FY27.
Diluted earnings per share reached $1.19, up 29% YoY and well above plan.
Pretax profit margin was 12%, an increase of 170 basis points YoY and well above plan.
Gross margin improved by 180 basis points to 31.3%, driven by merchandise margin and fuel hedges.
HomeGoods delivered a remarkable 9% comparable store sales increase.

Concerns

Full-year guidance does not flow the entire Q1 EPS beat ($0.20) due to planning current fuel prices to remain for the rest of the year, representing a $0.07 differential.
SG&A was 19.5% in Q1 FY27, unfavorable by 10 basis points YoY.
Q2 FY27 SG&A is expected to be 19.6%, 10 basis points unfavorable, due to incremental store wage and payroll costs.

Guidance & targets

Category	Target	Timeline	Confidence
Q2 FY27 Overall Comp Sales	2% to 3% increase high materiality	Q2 · FY27	High
Q2 FY27 Consolidated Sales	$15 billion to $15.1 billion high materiality	Q2 · FY27	High
Q2 FY27 Pretax Profit Margin	11.4% to 11.5% high materiality	Q2 · FY27	High
Q2 FY27 Gross Margin	30.9% to 31% medium materiality	Q2 · FY27	High
Q2 FY27 SG&A	19.6% medium materiality	Q2 · FY27	High
Q2 FY27 Diluted EPS	$1.15 to $1.17 high materiality	Q2 · FY27	High
Full Year FY27 Overall Comp Sales Growth	3% to 4% high materiality	Full Year FY27	High
Full Year FY27 Consolidated Sales	$63.2 billion to $63.7 billion high materiality	Full Year FY27	High
Full Year FY27 Pretax Profit Margin	11.9% to 12% high materiality	Full Year FY27	High
Full Year FY27 Gross Margin	31.2% to 31.3% medium materiality	Full Year FY27	High
Full Year FY27 SG&A	19.5% medium materiality	Full Year FY27	High
Full Year FY27 Diluted EPS	$5.08 to $5.15 high materiality	Full Year FY27	High
Fiscal 2027 Share Buyback	$2.75 billion to $3 billion high materiality	Fiscal 2027 · FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Marmaxx Comp sales grew an outstanding 6%, with segment profit margin increasing 100 basis points. Strong comp sales were seen across both apparel and home categories, and across all regions and income demographics. Comp sales in apparel and home categories: strongComp sales across region and income demographics: strongSierra stores and U.S. e-commerce sites comp: very strong increase	—	6%	—	14.7%
HomeGoods Comp sales increased a remarkable 9%, with segment profit margin increasing 270 basis points. Strong comp sales were seen across all region and income demographics. Comp sales across region and income demographics: strong	—	9%	—	12.9%
TJX Canada Comp sales were up an outstanding 7%. Segment profit margin on a constant currency basis grew 100 basis points across all three Canadian banners. Comp sales across all three Canadian banners: strong	—	7%	—	grew 100 bps
TJX International Comp sales increased a strong 4%. Segment profit margin on a constant currency basis improved by 40 basis points. The first store in Spain opened with terrific customer response. Sales growth in Europe: strongSales increase in Australia: strong	—	4%	—	4.7%

Product announcements

Product	Type	Timeline
First store in Spain	launch	Q1 FY27
Marshalls 'Hustlers' campaign	update	This year
HomeGoods 'never shop the same' campaign	update	This year
Canada 'start winning' campaign	update	This year

Deals & partnerships

Akzo Joint Venture

Joint venture with Akzo for the Promoter Stores in Mexico, combining TJX merchandising expertise with local operating knowledge. Management is optimistic about the long-term potential.

Brands for Less Investment

Investment in Brands for Less in the Middle East. Management remains confident in the long-term opportunity for that business, despite the current geopolitical environment.

Risks & headwinds

Elevated fuel prices Remainder of FY27

Full-year guidance does not flow the entire Q1 EPS beat ($0.20) due to planning current fuel prices to remain for the rest of the year, representing a $0.07 differential.

Mitigation:If fuel prices come down from current levels, the company would expect to see favorability to its full-year profitability plan.

Incremental store wage and payroll costs Q2 FY27

Expected to make Q2 FY27 SG&A 10 basis points unfavorable (19.6%).

Geopolitical environment in the Middle East Current

Not quantified, but noted as a factor impacting the Brands for Less investment.

Mitigation:Management remains confident in the long-term opportunity for the Brands for Less business.

Q&A highlights

Is the shift to comp being equally transaction-driven a signal of customers shying away from higher-priced products or a change in behavior due to macro factors?

Management stated there's no change in customer behavior, and they don't top-down drive ticket/transaction mix. They emphasize offering great value across good, better, and best brands, and transactions have remained healthy and consistent across all divisions.

“no change in behavior. Again, we don't top-down drive that. We do it from bottom up with our merchants.”

asked by Lorraine Maikis · answered by Ernie Herrman

2 min read 6 chapters

Detailed narrative

Strong Q1 Performance & Outlook Raise

TJX reported excellent Q1 FY27 results, with consolidated comparable store sales up 6%, significantly exceeding expectations. This strong performance, driven by both higher average basket and increased customer transactions across all divisions, led management to raise its full-year sales and profitability outlook. The company noted that the entire Q1 beat was not flowed through to the full year due to current fuel price assumptions.

Merchandise Margin & Fuel Hedge Benefits

Gross margin expanded by 180 basis points to 31.3% in Q1, primarily due to an increase in merchandise margin, benefits from favorable inventory and fuel hedges, and expense leverage on sales. Management highlighted the outstanding availability of quality branded merchandise and their ability to secure goods at extreme value, contributing to strong full-price selling trends.

Strategic Marketing & Customer Acquisition

The company is actively investing in fresh marketing campaigns and partnerships, targeting a broad demographic including younger shoppers through digital media. These efforts are successfully attracting new Gen Z and millennial customers, contributing to increased customer transactions and loyalty, and are viewed as a key offensive tool for market share gains.

Global Expansion & Store Growth Potential

TJX is pursuing global expansion, having recently opened its first store in Spain with a "terrific" customer response and planning additional openings. The company is also optimistic about its joint venture in Mexico and sees potential for over 1,700 additional stores in existing countries. Management indicated they are internally reviewing the long-term store count potential, hinting at a possible increase from the previously stated 7,000.

Inventory Management & Flexible Model

Inventory on a per-store basis was up 7% in Q1, with management expressing confidence in current levels and marketplace availability. The company's flexible off-price model, supported by over 1,400 buyers and rapid inventory turns, allows for quick adjustments to chase hot categories and back off weaker ones, ensuring consistent value and fresh assortments.

Associate Investment & Culture

TJX emphasizes continuous investment in the teaching and training of its associates, aiming to develop the next generation of leaders and maintain its deep off-price knowledge and expertise. This focus on culture and talent development is seen as a major contributor to long-term success and continuity.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.