TJX Raises Global Store Target to 7,500, Doubling Down on Physical Retail Expansion

TJX Companies, Inc. shares fell on Wednesday after the off-price retailer reported second-quarter fiscal 2027 results that beat Wall Street expectations.

Net sales rose 5% year over year to $15.18 billion, exceeding the analyst estimate of $15.17 billion. Adjusted diluted EPS grew 11% to $1.22, beating the $1.19 consensus.

GAAP diluted EPS rose 24% YoY to $1.36, versus $1.10 in the prior-year period. Comparable store sales rose 4%, ahead of the company's plan.

Shares declined as investors weighed weaker-than-expected third-quarter guidance against the stronger-than-expected second-quarter results.

Margins and Segment Performance

Pretax margin expanded 190 basis points to 13.3%. Adjusted pretax margin increased 50 basis points to 11.9%, and adjusted gross margin rose 70 basis points to 31.4%, driven by higher merchandise margins.

Marmaxx sales rose 3% to $9.11 billion, with comparable store sales up 1%. Adjusted segment margin was 14.2%.

HomeGoods sales rose 10% to $2.51 billion, with comparable store sales up 7%. Adjusted segment margin was 12.4%.

TJX Canada sales rose 6% to $1.47 billion, with comparable store sales up 6%. Adjusted segment margin was 16.3%.

International sales rose 11% to $2.09 billion, with comparable store sales up 7%. Adjusted segment margin was 7.3%.

Stores, Inventory, and Cash

TJX added 23 stores during the quarter, bringing the total to 5,285. Selling square footage increased 0.4% sequentially.

Total inventory was $7.9 billion, versus $7.4 billion in the prior-year period. Inventory per store increased 2% on a reported basis and 3% on a constant currency basis.

Foreign exchange reduced sales growth by 100 basis points but added 1 cent to diluted EPS.

Operating cash flow was $2.2 billion, with a cash balance of $6.0 billion. TJX returned $1.3 billion to shareholders, including $798 million in share repurchases and $529 million in dividends.

Current long-term debt was $1.0 billion, and long-term debt was $1.87 billion.

Tariff Refunds and Third-Quarter Outlook

TJX received $331 million in IEEPA tariff refunds and recorded $112 million in related compensation accruals. These items generated a $219 million pretax gain, adding 14 cents to diluted EPS.

For the third quarter, TJX expects comparable store sales growth of 2% to 3% and an adjusted pretax margin of 12.3% to 12.4%.

The company expects adjusted EPS of $1.30 to $1.32, below the analyst consensus median of $1.34 and the upper end of the expected range.

TJX Raises Full-Year GAAP EPS Guidance

TJX raised its fiscal 2027 GAAP EPS guidance to $5.31 to $5.36, from $5.08 to $5.15. The new range is above the $5.21 analyst estimate.

However, adjusted EPS guidance of $5.15 to $5.20 is below the $5.22 analyst estimate.

TJX also raised its adjusted pretax margin outlook to 12% to 12.1%, while maintaining comparable store sales growth guidance of 3% to 4%.

The company plans to increase its store base by approximately 4% annually starting in fiscal 2028. It also raised its long-term global store target to 7,500.

TJX share performance: At the time of Wednesday's data release, TJX Companies stock was down 2.82% at $146.60.