TJX Raises Full-Year Profit Outlook After 4% Comparable-Sales Growth

TJX Companies raised its full-year fiscal 2027 profit outlook after second-quarter comparable sales rose 4%, beating the off-price retailer’s plan even as growth at its largest U.S. division slowed. Net sales for the quarter ended August 1 reached $15.18 billion, up 5% from a year earlier, while net income was $1.5 billion.

Diluted earnings per share were $1.36, up 24% from $1.10 a year earlier. The reported figure included a 14-cent net benefit tied to tariff refunds and related compensation accruals. Excluding that benefit, adjusted diluted earnings per share were $1.22, an 11% increase from the prior-year quarter.

The company said in its Q2 earnings release that it is now targeting full-year diluted earnings per share of $5.31 to $5.36, up from the $5.08 to $5.15 range it issued after the first quarter. TJX kept its fiscal 2027 comparable-sales outlook at growth of 3% to 4%, while raising its pretax profit-margin guidance.

Higher profit guidance comes with a tariff-refund adjustment

TJX now expects full-year pretax profit margin of 12.3% to 12.4%, compared with its May guidance of 11.9% to 12.0%. The company also provided adjusted guidance that removes an expected net benefit from tariff refunds. On that basis, it expects pretax profit margin of 12.0% to 12.1% and adjusted diluted earnings per share of $5.15 to $5.20.

The distinction matters because the second-quarter reported results received a sizable lift from refunds of tariffs previously paid under the International Emergency Economic Powers Act. TJX said it received $331 million of refunds during the quarter. It also accrued $112 million of incremental expenses for year-end incentive compensation and discretionary bonuses for eligible employees, leaving a net pretax benefit of $219 million.

Reported pretax profit margin was 13.3%, up 1.9 percentage points from 11.4% a year earlier. Excluding the net tariff-refund benefit, adjusted pretax margin was 11.9%, up 0.5 percentage points. Reported gross margin rose to 33.4% from 30.7%, while adjusted gross margin was 31.4%, 0.7 percentage points above the prior year.

Selling, general and administrative costs were 20.3% of sales. After excluding the effect of the compensation accruals connected with the tariff refunds, adjusted SG&A was 19.7% of sales, up 0.2 percentage points from a year earlier. TJX attributed that increase mainly to higher store wage and payroll costs.

For the third quarter, TJX expects comparable sales growth of 2% to 3%, pretax profit margin of 12.8% to 12.9% and diluted earnings per share of $1.36 to $1.38. Excluding an expected six-cent net benefit from tariff refunds, adjusted earnings are projected at $1.30 to $1.32 per share. The company cautioned that the amount, timing and likelihood of additional tariff refunds remain uncertain and that future recoveries may depend on legal, regulatory or administrative developments.

HomeGoods and international growth offset softer Marmaxx sales

The consolidated 4% comparable-sales increase masked a wide gap among TJX’s operating divisions. Marmaxx, the U.S. business that includes TJ Maxx, Marshalls and Sierra, posted comparable-sales growth of 1%. Its second-quarter net sales were $9.11 billion, up 3% from a year earlier.

HomeGoods was much stronger. Comparable sales rose 7% and net sales increased 10% to $2.51 billion. TJX Canada reported 6% comparable-sales growth, while net sales rose 6% to $1.47 billion. On a constant-currency basis, Canadian sales growth was 8%.

TJX International, which includes operations in Europe and Australia, also delivered 7% comparable-sales growth. Net sales increased 11% to $2.09 billion, or 10% on a constant-currency basis. Management said Marmaxx sales were below its expectations in the second quarter, but it also said the division had shown improvement at the start of the third quarter.

The stronger results outside Marmaxx helped keep consolidated comparable-sales growth above the company’s plan. They also show why TJX’s geographic and banner mix can matter when one large business runs at a slower pace. In the first half of fiscal 2027, consolidated net sales reached $29.5 billion, up 7%, while comparable sales increased 5%. First-half net income was $2.9 billion and diluted earnings per share were $2.55. Adjusted first-half earnings, excluding the tariff-refund benefit, were $2.41 per share.

Inventory ended the quarter at $7.9 billion, compared with $7.4 billion a year earlier. On a per-store basis, including distribution centers but excluding goods in transit and e-commerce inventory, inventory was up 2% on a reported basis and 3% at constant currency. TJX said the merchandise available in the market remains strong and that it expects to use that availability to refresh assortments for the fall and holiday seasons.

TJX plans faster store growth from fiscal 2028

Alongside the higher profit forecast, TJX announced a more aggressive store-expansion plan. Beginning in fiscal 2028, the company plans to increase store-opening growth to 4% and raised its long-term target for its existing banners in current countries to 7,500 stores, 500 above its previous target.

TJX finished the second quarter with 5,285 stores after adding a net 23 locations during the period. Total square footage increased 0.4% from the prior quarter. The portfolio includes TJ Maxx, Marshalls, HomeGoods, Homesense and Sierra in the United States, Winners, HomeSense and Marshalls in Canada, and TK Maxx and Homesense in Europe, along with TK Maxx in Australia.

The retailer’s cash generation continued to support both expansion and shareholder returns. TJX generated $2.2 billion of operating cash flow during the second quarter and ended the period with $6.0 billion in cash. It returned $1.3 billion to shareholders during the quarter, including $798 million of share repurchases and $529 million of dividends.

For the first half, total shareholder distributions reached $2.4 billion. TJX continues to expect fiscal 2027 share repurchases of about $2.75 billion to $3.0 billion, a range it had raised after the first quarter.

The next operating benchmark is the third-quarter plan for 2% to 3% comparable-sales growth and adjusted earnings of $1.30 to $1.32 per share. Those targets will provide the first reported test of management’s statement that the quarter began strongly and that Marmaxx trends had improved from the second quarter.