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TJX Raises Fiscal 2027 Outlook as Q2 Results Show Broad-Based Growth
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Key Takeaways
TJX raised fiscal 2027 adjusted EPS guidance to $5.15-$5.20 after Q2 results exceeded plan.
HomeGoods, Canada and International gains offset Marmaxx's slower 1% comparable-sales growth.
TJX lifted its long-term global store target by 500 to 7,500 and plans 4% annual growth from fiscal 2028.
The TJX Companies, Inc. (TJX - Free Report) raised its fiscal 2027 profit and earnings outlook after second-quarter results exceeded plan. The update puts more weight on whether higher merchandise margins, broad divisional growth and an improving Marmaxx trend can carry into the second half.
The event also extends beyond the current year. Management paired the higher outlook with a larger long-term store target, adding another growth lever as TJX works through execution and cost pressures.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
Adjusted second-quarter earnings rose 11% year over year to $1.22 per share, beating the Zacks Consensus Estimate of $1.18. Net sales increased 5% to $15.18 billion and consolidated comparable sales advanced 4%, above the company's plan.
The comparable-sales gain reflected a higher average basket and increased customer transactions. Adjusted gross margin increased 70 basis points to 31.4%, driven by a higher merchandise margin, while adjusted pretax profit margin expanded 50 basis points to 11.9%.
Ross Stores, Inc. (ROST - Free Report) provides another off-price reference point, with second-quarter fiscal 2026 total sales up 13% and comparable-store sales up 10%. Burlington Stores, Inc. (BURL - Free Report) reported an 11% sales increase and 2% comparable-store sales growth in its second quarter, showing that the broader off-price channel continued to generate sales gains.
TJX Raises Profit and Earnings Expectations
TJX increased its fiscal 2027 adjusted pretax profit margin outlook to 12% to 12.1% from 11.9% to 12%. Adjusted earnings guidance moved to $5.15 to $5.20 per share from $5.08 to $5.15.
Management continues to expect consolidated comparable sales growth of 3% to 4% and sales of $63.4 billion to $63.8 billion, up 5% to 6% year over year. Third-quarter guidance calls for adjusted earnings of $1.30 to $1.32 per share and comparable sales growth of 2% to 3%.
TJX Needs Marmaxx to Keep Improving
Marmaxx was the quarter's weakest division, with comparable sales rising 1%. HomeGoods increased 7%, TJX Canada gained 6% and TJX International advanced 7%, allowing the other banners to offset the slower performance at TJX's largest division.
Management described the Marmaxx merchandise-mix issue as self-inflicted and within its control. Trends improved at the start of the third quarter, and management expects greater improvement by the holiday season, making continued execution at Marmaxx an important test for the raised outlook.
Image Source: Zacks Investment Research
TJX Expands Its Long-Term Store Opportunity
TJX ended the second quarter with 5,285 stores and increased its long-term global store target by 500 locations to 7,500. That target implies more than 2,200 additional stores across existing banners and current countries.
The company also plans to increase annual store growth to 4% beginning in fiscal 2028. The expansion gives TJX another avenue for sales growth beyond comparable-store gains, while requiring continued merchandise availability and disciplined execution across a larger footprint.
TJX's Near-Term Signal Backs the Earnings Story
TJX's higher guidance, broad divisional gains and larger store target strengthen the operating backdrop, but Marmaxx execution remains a near-term checkpoint. Wage, payroll and fuel costs also remain relevant as management works to deliver the upgraded profit outlook.
TJX currently carries a Zacks Rank #2 (Buy), a short-term rating tied to earnings estimate revisions over a one- to three-month horizon. It also has a Growth Score of B, Momentum Score of B and VGM Score of B, which are favorable grades when paired with a top Zacks Rank. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Value Score of D provides a counterweight by indicating a weaker value profile. The combination supports a constructive near-term signal for growth and momentum-oriented investors while keeping valuation and execution central to the investment debate.
View the Zacks #1 Rank List
Image: Bigstock
TJX Raises Fiscal 2027 Outlook as Q2 Results Show Broad-Based Growth
Key Takeaways
The TJX Companies, Inc. (TJX - Free Report) raised its fiscal 2027 profit and earnings outlook after second-quarter results exceeded plan. The update puts more weight on whether higher merchandise margins, broad divisional growth and an improving Marmaxx trend can carry into the second half.
The event also extends beyond the current year. Management paired the higher outlook with a larger long-term store target, adding another growth lever as TJX works through execution and cost pressures.
The TJX Companies, Inc. Price, Consensus and EPS Surprise
The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote
TJX's Q2 Beat Supports the Higher Outlook
Adjusted second-quarter earnings rose 11% year over year to $1.22 per share, beating the Zacks Consensus Estimate of $1.18. Net sales increased 5% to $15.18 billion and consolidated comparable sales advanced 4%, above the company's plan.
The comparable-sales gain reflected a higher average basket and increased customer transactions. Adjusted gross margin increased 70 basis points to 31.4%, driven by a higher merchandise margin, while adjusted pretax profit margin expanded 50 basis points to 11.9%.
Ross Stores, Inc. (ROST - Free Report) provides another off-price reference point, with second-quarter fiscal 2026 total sales up 13% and comparable-store sales up 10%. Burlington Stores, Inc. (BURL - Free Report) reported an 11% sales increase and 2% comparable-store sales growth in its second quarter, showing that the broader off-price channel continued to generate sales gains.
TJX Raises Profit and Earnings Expectations
TJX increased its fiscal 2027 adjusted pretax profit margin outlook to 12% to 12.1% from 11.9% to 12%. Adjusted earnings guidance moved to $5.15 to $5.20 per share from $5.08 to $5.15.
Management continues to expect consolidated comparable sales growth of 3% to 4% and sales of $63.4 billion to $63.8 billion, up 5% to 6% year over year. Third-quarter guidance calls for adjusted earnings of $1.30 to $1.32 per share and comparable sales growth of 2% to 3%.
TJX Needs Marmaxx to Keep Improving
Marmaxx was the quarter's weakest division, with comparable sales rising 1%. HomeGoods increased 7%, TJX Canada gained 6% and TJX International advanced 7%, allowing the other banners to offset the slower performance at TJX's largest division.
Management described the Marmaxx merchandise-mix issue as self-inflicted and within its control. Trends improved at the start of the third quarter, and management expects greater improvement by the holiday season, making continued execution at Marmaxx an important test for the raised outlook.
Image Source: Zacks Investment Research
TJX Expands Its Long-Term Store Opportunity
TJX ended the second quarter with 5,285 stores and increased its long-term global store target by 500 locations to 7,500. That target implies more than 2,200 additional stores across existing banners and current countries.
The company also plans to increase annual store growth to 4% beginning in fiscal 2028. The expansion gives TJX another avenue for sales growth beyond comparable-store gains, while requiring continued merchandise availability and disciplined execution across a larger footprint.
TJX's Near-Term Signal Backs the Earnings Story
TJX's higher guidance, broad divisional gains and larger store target strengthen the operating backdrop, but Marmaxx execution remains a near-term checkpoint. Wage, payroll and fuel costs also remain relevant as management works to deliver the upgraded profit outlook.
TJX currently carries a Zacks Rank #2 (Buy), a short-term rating tied to earnings estimate revisions over a one- to three-month horizon. It also has a Growth Score of B, Momentum Score of B and VGM Score of B, which are favorable grades when paired with a top Zacks Rank. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Value Score of D provides a counterweight by indicating a weaker value profile. The combination supports a constructive near-term signal for growth and momentum-oriented investors while keeping valuation and execution central to the investment debate.