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TJX Q2 Earnings Call Focuses on Marmaxx Fixes & Faster Store Growth
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Key Takeaways
TJX raises the FY27 adjusted EPS guidance to $5.15-$5.20 while keeping comps growth at 3-4%.
TJX calls Marmaxx's 1% comps gain a self-inflicted miss tied to merchandise mix, stores and timing.
TJX lifts its long-term store target by 500 to 7500 and plans 4% annual opening growth from FY28.
The TJX Companies, Inc. (TJX - Free Report) used its second-quarter fiscal 2027 earnings call to frame Marmaxx’s softer performance as a correctable execution problem while leaning on stronger results elsewhere and a larger store-growth opportunity.
Adjusted earnings of $1.22 per share topped the Zacks Consensus Estimate of $1.18. Revenues of $15.18 billion beat the consensus estimate of $15.14 billion. Management raised its full-year profit outlook but kept comparable-sales (comps) expectations unchanged.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
CFO John Klinger said that fiscal 2027 adjusted pre-tax margin is expected at 12-12.1%, suggesting growth of 30-40 basis points from that reported last year.
Klinger also raised the adjusted earnings guidance to $5.15-$5.20, indicating 9-10% year-over-year growth. Full-year comps are expected to rise 3-4%.
For the fiscal third quarter, Klinger guided comps growth of 2-3% and adjusted earnings of $1.30-$1.32 per share.
TJX Companies Moves to Fix Marmaxx
CEO and President Ernie Herrman said that Marmaxx’s 1% comps increase fell below expectations because the division did not have the right merchandise mix in the right stores at the right time.
In response to a BofA Securities analyst, Herrman called the issue self-inflicted and said that management had identified the affected areas. Marmaxx improved in August, with greater improvement expected by the holiday quarter.
A Goldman Sachs analyst pressed on prevention. Herrman said that TJX added systematic planning processes while involving buying, planning and senior merchandising leaders in the correction.
TJX Accelerates Store Expansion
Herrman revealed that TJX plans to increase annual store-opening growth to 4% beginning in fiscal 2028 and raised its long-term store target by 500 locations to 7,500.
Klinger told a JPMorgan analyst that Marmaxx gained 300 stores of long-term potential and HomeGoods gained 200. He cited rural markets, denser store placement and smaller formats as expansion opportunities.
Herrman added that Sierra and Homesense are expected to grow well above the 4% corporate pace. Management also said that new stores have been exceeding expectations.
TJX Companies Gets Support Beyond Marmaxx
Klinger said that HomeGoods delivered a 7% comps increase, while TJX Canada rose 6% and TJX International advanced 7%, helping offset Marmaxx.
A Morgan Stanley analyst focused on HomeGoods’ sales and margin momentum. Herrman pointed to broad category strength, consumables, store presentation and a differentiated treasure-hunt assortment.
Klinger added that HomeGoods’ adjusted segment margin increased 240 basis points to 12.4%, supported by top-line growth, operating efficiencies and merchandise-margin improvement.
TJX Keeps Back-Half Assumptions Measured
Klinger said that fiscal third-quarter adjusted gross margin is expected to be 32.1-32.2%, suggesting a fall of 40-50 basis points from that reported last year because of higher fuel costs.
Asked by an Evercore ISI analyst about second-half margins, Klinger informed that higher fuel and freight costs, slower planned comps growth, and merchandise-margin comparisons explain the first-half-to-second-half shift.
Herrman told a Bernstein analyst that recent ticket growth should moderate. He added that category mix and branded buying opportunities, rather than top-down pricing targets, drive ticket changes.
TJX Companies Maintains Offensive Posture
Herrman said that the second half will focus on merchandising, gifting, marketing and traffic, supported by strong branded-merchandise availability.
Management’s posture combined near-term repair work at Marmaxx with broader expansion plans. The raised profit outlook and store target sit alongside unchanged full-year comps guidance.
Zacks Style Scores are designed to complement the Zacks Rank, with A and B grades preferred. A Rank #3 can still be held under the framework, but the Zacks Rank may change as earnings estimates are revised after the reported quarter.
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TJX Q2 Earnings Call Focuses on Marmaxx Fixes & Faster Store Growth
Key Takeaways
The TJX Companies, Inc. (TJX - Free Report) used its second-quarter fiscal 2027 earnings call to frame Marmaxx’s softer performance as a correctable execution problem while leaning on stronger results elsewhere and a larger store-growth opportunity.
Adjusted earnings of $1.22 per share topped the Zacks Consensus Estimate of $1.18. Revenues of $15.18 billion beat the consensus estimate of $15.14 billion. Management raised its full-year profit outlook but kept comparable-sales (comps) expectations unchanged.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote
TJX Raises FY27 Profit Outlook
CFO John Klinger said that fiscal 2027 adjusted pre-tax margin is expected at 12-12.1%, suggesting growth of 30-40 basis points from that reported last year.
Klinger also raised the adjusted earnings guidance to $5.15-$5.20, indicating 9-10% year-over-year growth. Full-year comps are expected to rise 3-4%.
For the fiscal third quarter, Klinger guided comps growth of 2-3% and adjusted earnings of $1.30-$1.32 per share.
TJX Companies Moves to Fix Marmaxx
CEO and President Ernie Herrman said that Marmaxx’s 1% comps increase fell below expectations because the division did not have the right merchandise mix in the right stores at the right time.
In response to a BofA Securities analyst, Herrman called the issue self-inflicted and said that management had identified the affected areas. Marmaxx improved in August, with greater improvement expected by the holiday quarter.
A Goldman Sachs analyst pressed on prevention. Herrman said that TJX added systematic planning processes while involving buying, planning and senior merchandising leaders in the correction.
TJX Accelerates Store Expansion
Herrman revealed that TJX plans to increase annual store-opening growth to 4% beginning in fiscal 2028 and raised its long-term store target by 500 locations to 7,500.
Klinger told a JPMorgan analyst that Marmaxx gained 300 stores of long-term potential and HomeGoods gained 200. He cited rural markets, denser store placement and smaller formats as expansion opportunities.
Herrman added that Sierra and Homesense are expected to grow well above the 4% corporate pace. Management also said that new stores have been exceeding expectations.
TJX Companies Gets Support Beyond Marmaxx
Klinger said that HomeGoods delivered a 7% comps increase, while TJX Canada rose 6% and TJX International advanced 7%, helping offset Marmaxx.
A Morgan Stanley analyst focused on HomeGoods’ sales and margin momentum. Herrman pointed to broad category strength, consumables, store presentation and a differentiated treasure-hunt assortment.
Klinger added that HomeGoods’ adjusted segment margin increased 240 basis points to 12.4%, supported by top-line growth, operating efficiencies and merchandise-margin improvement.
TJX Keeps Back-Half Assumptions Measured
Klinger said that fiscal third-quarter adjusted gross margin is expected to be 32.1-32.2%, suggesting a fall of 40-50 basis points from that reported last year because of higher fuel costs.
Asked by an Evercore ISI analyst about second-half margins, Klinger informed that higher fuel and freight costs, slower planned comps growth, and merchandise-margin comparisons explain the first-half-to-second-half shift.
Herrman told a Bernstein analyst that recent ticket growth should moderate. He added that category mix and branded buying opportunities, rather than top-down pricing targets, drive ticket changes.
TJX Companies Maintains Offensive Posture
Herrman said that the second half will focus on merchandising, gifting, marketing and traffic, supported by strong branded-merchandise availability.
Management’s posture combined near-term repair work at Marmaxx with broader expansion plans. The raised profit outlook and store target sit alongside unchanged full-year comps guidance.
TJX's Zacks Signals Favor Growth & Momentum
TJX currently carries a Zacks Rank #3 (Hold). Its Growth Score of A, Momentum Score of B and VGM Score of B are favorable, while its Value Score of D indicates weaker value characteristics under the Style Score framework. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Style Scores are designed to complement the Zacks Rank, with A and B grades preferred. A Rank #3 can still be held under the framework, but the Zacks Rank may change as earnings estimates are revised after the reported quarter.