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TJX
Earnings call · Jul 2026 (Q2 FY27)

TJX COMPANIES Q2 FY27 earnings call TJX

Aug 19, 2026 Source

Executive summary

The TJX Companies Q2 FY27 — Diversified Business Drives Above-Plan Results Despite Marmaxx Underperformance

The TJX Companies delivered strong Q2 FY27 results, surpassing profit and sales plans, largely due to the robust performance of its diversified global portfolio. While the Marmaxx division faced "self-inflicted" merchandise mix challenges, management is confident in its ability to rectify these issues by the holiday season. The company is poised for continued growth, increasing its long-term store target and accelerating new store openings, leveraging its value proposition and strong market position.

Highlights

5

  • Consolidated comparable sales increased 4%, exceeding plan.

  • Adjusted diluted EPS of $1.22, up 11% YoY and well above plan.

  • HomeGoods, TJX Canada, and TJX International delivered strong comparable sales increases of 6% to 7%.

  • Long-term store growth potential increased by 500 stores to a total of 7,500, with store openings accelerating to 4% annually.

  • Adjusted pretax profit margin was 11.9%, up 50 bps YoY and well above plan.

Concerns

3

  • Marmaxx comparable sales increased only 1%, below expectations due to "self-inflicted" merchandise mix issues.

  • Adjusted SG&A was 19.7%, unfavorable by 20 bps YoY due to incremental store wage and payroll costs.

  • Q3 FY27 adjusted pretax profit margin expected to be down 30-40 bps YoY, primarily due to higher fuel costs.

Guidance & targets

CategoryTargetConfidence
Q3 FY27 Overall Comparable Sales Growth
up 2% to 3%
high materiality
High
Q3 FY27 Consolidated Sales
$15.6 billion to $15.8 billion
high materiality
High
Q3 FY27 Adjusted Pretax Profit Margin
12.3% to 12.4%
high materiality
High
Q3 FY27 Adjusted Gross Margin
32.1% to 32.2%
medium materiality
High
Q3 FY27 Adjusted SG&A
20%
medium materiality
High
Q3 FY27 Adjusted Diluted EPS
$1.30 to $1.32
high materiality
High
Full Year FY27 Overall Comparable Sales Growth
3% to 4%
high materiality
High
Full Year FY27 Consolidated Sales
$63.4 billion to $63.8 billion
high materiality
High
Full Year FY27 Adjusted Pretax Profit Margin
12% to 12.1%
high materiality
High
Full Year FY27 Adjusted Gross Margin
31.2% to 31.3%
medium materiality
High
Full Year FY27 Adjusted SG&A
19.5%
medium materiality
High
Full Year FY27 Adjusted Diluted EPS
$5.15 to $5.20
high materiality
High
Q4 FY27 Overall Comparable Sales Growth
up 2% to 3%
high materiality
High
Q4 FY27 Adjusted Pretax Profit Margin
11.9% to 12%
high materiality
High
Q4 FY27 Adjusted Diluted EPS
$1.44 to $1.47
high materiality
High
Long-term Store Growth Potential
7,500 stores
high materiality
High
Annual Store Opening Growth Rate
4%
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Marmaxx
Comp sales entirely driven by higher average basket, partially offset by a small decrease in customer transactions. Sales were lower than desired due to self-inflicted merchandise mix issues. Adjusted segment profit was flat versus last year.
Comp sales: 1%Average basket: higherCustomer transactions: small decrease
—1%—14.2%
HomeGoods
Outstanding comp sales primarily driven by higher average basket, with customer transactions also up. Strength seen at both HomeGoods and HomeSense banners across all regions and income demographics. Adjusted segment profit margin up 240 basis points.
Comp sales: 7%Average basket: higherCustomer transactions: up
—7%—12.4%
TJX Canada
Excellent comp sales primarily driven by an increase in customer transactions. Adjusted segment profit margin on a constant currency basis up 30 basis points.
Comp sales: 6%Customer transactions: increase
—6%—16.3%
TJX International
Outstanding comp sales primarily driven by an increase in customer transactions. Strong, consistent sales performance in Europe and excellent sales in Australia. Adjusted segment profit margin on a constant currency basis up 210 basis points. Opened second T.K. Maxx store in Spain.
Comp sales: 7%Customer transactions: increase
—7%—7.3%

Risks & headwinds

Marmaxx Merchandise Mix Execution Q2 FY27, improving in Q3, confident by Q4 holiday season

Comparable sales increased 1%, below expectations

Mitigation:Identified self-inflicted issues, implemented systematic changes in planning, all levels of management involved in fixing.

Higher Fuel and Freight Costs Q3 FY27 and potentially Q4 FY27

Q3 FY27 adjusted gross margin down 40 to 50 basis points YoY, primarily driven by higher fuel costs.

Mitigation:Managed through freight accruals and mark-to-market hedges in H1, but H2 sees higher rates due to fuel and driver availability.

Incremental Store Wage and Payroll Costs Ongoing

Q2 FY27 adjusted SG&A unfavorable by 20 basis points YoY.

Mitigation:Operational expense efficiencies helped offset in Q2, but remains a cost pressure.

What to watch in Q3 FY27

Marmaxx Comparable Sales Recovery

by Q4 FY27
Current 1% in Q2 FY27
Target return to 2-3% comp cadence

Why it matters

Marmaxx is the largest division; its recovery is crucial for overall company performance and investor confidence.

I am most confident we'll be seeing what you're talking about by Q4 and I think a transition toward that over the next couple of months.

Q&A highlights

Seeking details on Marmaxx's Q2 sales trend, the nature of its Q3 improvement, and the rationale behind the increased store target, including new store metrics.

Marmaxx saw consistent positive comps in June/July after a stronger May. Q3 (August) shows improvement across all businesses, including Marmaxx, with confidence for significant Marmaxx improvement by Q4. The increased store target (7,500 total, 4% annual growth) is driven by opportunities in rural markets, increased density, and small-format stores, with new stores consistently exceeding expectations.

“The performance of our new stores for a long, long time, we've been exceeding our expectations on our new store openings for quite a while. And so we see no concerns there either.”

asked by Matthew Boss · answered by Ernie Herrman

2 min read 6 chapters

Detailed narrative

Marmaxx Execution Challenges and Recovery Plan

Marmaxx's Q2 comparable sales of 1% fell below expectations due to "self-inflicted" merchandise mix issues, specifically not having the "right goods in the right stores at the right time." Management has identified these execution gaps, involving all levels from buyers to senior leadership, and has implemented systematic changes in planning to prevent recurrence. Improvement was noted in August, and the company is confident in seeing "more significant improvement" by the holiday selling season (Q4 FY27).

Diversified Business Strength

The company's global diversified business model proved its resilience, with HomeGoods, TJX Canada, and TJX International delivering strong comparable sales increases of 6% to 7%. This performance significantly offset Marmaxx's underperformance, driving consolidated results above plan. This diversification is highlighted as a key strength, enabling consistent overall performance even when one division faces challenges.

HomeGoods Outperformance and Market Share Gains

HomeGoods delivered an "outstanding" 7% comparable sales increase, driven by higher average basket and customer transactions. The division is excelling in both traditional home fashions and consumable/replenishment categories, creating a unique "treasure hunt" experience. Management attributes this success to strong execution, effective merchandising, and a perceived lack of strong competition in the home retail sector, positioning HomeGoods to capture further market share.

Strategic Store Expansion

TJX is increasing its long-term store growth potential by 500 stores to a total of 7,500, with plans to accelerate annual store openings to 4% starting next year. This expansion includes an additional 300 stores for T.J. Maxx and Marshalls (totaling 3,300) and 200 for HomeGoods (totaling 2,000). The growth is supported by opportunities in rural markets (due to department store closures), increased store density in existing markets, and flexible small-format stores for urban areas.

Value Proposition and Marketing Strategy

Management emphasizes the company's strong value leadership and "treasure hunt" shopping experience as key differentiators, particularly appealing to consumers seeking value in the current economic environment. The marketing strategy focuses heavily on digital and social media, with significant video views across platforms like TikTok and YouTube, demonstrating high customer engagement and reinforcing brand perception across diverse demographics.

Inventory and Sourcing Advantage

Product availability is described as "off the charts," with plentiful buying opportunities in the marketplace. The company's team of over 1,400 buyers and strong vendor relationships (approximately 21,000 vendors annually) are highlighted as competitive advantages, enabling the curation of unmatched merchandise mixes and consistent buying throughout the year. Inventory levels are considered healthy and well-positioned to capitalize on market opportunities.

AI-generated summary of the company's earnings call. Not investment advice.