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TJX COMPANIES INC /DE/ (TJX)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 delivered a modest top-line beat and EPS ahead of consensus: revenue $13.11B vs $13.03B consensus and diluted EPS $0.92 vs $0.907 consensus; comps +3% at the high end of plan; pretax margin 10.3% above plan despite FX hedge headwinds . EPS and revenue consensus from S&P Global.*
  • Maintained full-year FY26 guidance (comps +2–3%, pretax margin 11.3–11.4%, EPS $4.34–$4.43), and issued Q2 guide of EPS $0.97–$1.00, with explicit tariff headwinds expected in Q2 and mitigation plans for 2H .
  • HomeGoods outperformed apparel; all divisions posted comp growth and increased transactions; inventory availability described as “outstanding” and per-store inventory up 7%, positioning well for spring/summer and back half .
  • Capital returns remain robust: $1.0B returned in Q1 (5.1M shares repurchased for $613M; $420M dividends); dividend per share increased 13% to $0.425 in March ahead of Q1 .
  • Near-term stock catalysts: resilience vs tariffs and maintained FY26 EPS guide, strong Q2 start, divisional breadth (home and international strength), and ongoing buybacks/dividends .

What Went Well and What Went Wrong

What Went Well

  • Comps +3% at the high end of plan, driven by transactions across all divisions and geographies; HomeGoods comp +4% and international comps +5% .
  • Management tone confident on value proposition and market share gains; “second quarter is off to a strong start” with “outstanding availability” in the marketplace .
  • Segment profitability: HomeGoods margin was up 70 bps; TJX International margin up 20 bps (cc); Canada posted +5% comps despite FX headwinds .

Management quote: “All divisions, both in the U.S. and internationally, drove increases in comp sales and customer transactions… The second quarter is off to a strong start…” — Ernie Herrman .

What Went Wrong

  • Gross margin down 50 bps YoY to 29.5% due to negative mark-to-market on inventory hedges; pretax margin down 80 bps YoY to 10.3% .
  • SG&A deleverage (up 20 bps) from lapping prior-year reserve release and higher store wages/payroll; net interest income delevered pretax margin by ~20 bps YoY .
  • Tariff pressure to be most acute in Q2; guidance embeds mitigation efforts but flags the timing mismatch on directly imported goods ordered pre-tariff announcement .

Financial Results

Core P&L vs Prior Quarters (oldest → newest)

MetricQ3 FY25Q4 FY25Q1 FY26
Revenue ($USD Billions)$14.06 $16.35 $13.11
Diluted EPS ($)$1.14 $1.23 $0.92
Gross Profit Margin %31.6% 30.5% 29.5%
Pretax Profit Margin %12.3% 11.6% 10.3%
SG&A % of Sales19.5% 19.2% 19.4%

Q1 FY26 Actual vs Wall Street Consensus (S&P Global)

MetricQ1 FY26 ActualQ1 FY26 Consensus# of Estimates
Revenue ($USD Billions)$13.11 $13.03*18*
Diluted EPS ($)$0.92 $0.907*20*

Values retrieved from S&P Global.*

Comparable Sales by Division (Q1 FY26 vs Q1 FY25)

DivisionQ1 FY26 CompsQ1 FY25 Comps
Marmaxx (U.S.)+2% +2%
HomeGoods (U.S.)+4% +4%
TJX Canada+5% +4%
TJX International+5% +2%
Consolidated TJX+3% +3%

Net Sales by Division (Q1 FY26 vs Q1 FY25)

DivisionQ1 FY26 ($MM)Q1 FY25 ($MM)Reported Growth
Marmaxx (U.S.)$8,052 $7,750 +4%
HomeGoods (U.S.)$2,254 $2,079 +8%
TJX Canada$1,144 $1,113 +3%
TJX International$1,661 $1,537 +8%
Total TJX$13,111 $12,479 +5%

Segment Profit and Margins (Q1 FY26 vs Q1 FY25)

DivisionSegment Profit Q1 FY26 ($MM)Q1 FY25 ($MM)Margin Commentary
Marmaxx (U.S.)$1,107 $1,097 13.7% margin, down 50 bps YoY
HomeGoods (U.S.)$230 $198 10.2% margin, up 70 bps YoY
TJX Canada$122 $137 10.6% margin (cc), down 170 bps YoY due to transactional FX
TJX International$72 $61 4.2% margin (cc), up 20 bps YoY
Total Segment Profit$1,531 $1,493 Consolidated profit up YoY

KPIs and Capital Allocation

KPIQ1 FY26Q1 FY25 / Prior
Inventory ($B)$7.13 $6.22
Per-Store Inventory Change+7% +7% (cc)
Operating Cash Flow ($MM)$394 $737
Cash & Equivalents ($B)$4.26 $5.06
Share Repurchases5.1M shares; $613MM —
Dividends Paid ($MM)$420 —
Total Returned to Shareholders ($B)$1.0 —
Diluted Shares (MM)1,132 1,146

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated CompsFY26+2% to +3% +2% to +3% Maintained
Pretax Profit MarginFY2611.3%–11.4% 11.3%–11.4% Maintained
Diluted EPSFY26$4.34–$4.43 $4.34–$4.43 Maintained
Gross MarginFY2630.4%–30.5% (implied in call) —30.4%–30.5% Maintained
Net Interest IncomeFY26—~$98MM; ~20 bps deleverage New detail
Tax RateFY26—25.1% New detail
Diluted SharesFY26—~1.13B New detail
Consolidated SalesFY26—$58.1–$58.6B New detail
EPSQ1 FY26$0.87–$0.89 Actual $0.92 Beat
CompsQ2 FY26—+2% to +3% Initiated
Pretax Profit MarginQ2 FY26—10.4%–10.5% Initiated
Diluted EPSQ2 FY26—$0.97–$1.00 Initiated
Gross MarginQ2 FY26—~30% (–40 bps YoY) Initiated
Tax RateQ2 FY26—24% Initiated
Net Interest IncomeQ2 FY26—~$24MM; ~20 bps deleverage Initiated
Quarterly DividendFY26$0.375 (FY25) $0.425 (13% increase) Raised
BuybacksFY26$2.0–$2.5B planned Reaffirmed $2.0–$2.5B Maintained

Assumptions: tariff levels held through FY26; FX expected to be a ~0.2 ppt headwind to pretax margin and ~3% negative impact to EPS growth .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25)Previous Mentions (Q4 FY25)Current Period (Q1 FY26)Trend
Tariffs/MacroNot a focus; raised FY25 margin/EPS guidance FY26 guide introduced; no tariff specifics Tariffs to pressure Q2; mitigation via buying/pricing/sourcing/diversification; maintain FY26 EPS guide Heightened near-term headwind; mitigation in place
Supply Chain/FreightNot highlighted No freight stress noted Ocean freight is 20–25% of overall freight; rates not up yet; forecasts reflect current costs Neutral-to-cautious
Inventory AvailabilityStrong into holiday; per-store down 2% YoY Strong entering spring “Outstanding availability”; per-store inventory +7%; opportunistic close-to-market buys Improving
Product Performance (Home vs Apparel)Balanced; EU strong; Home comps +3% Broad strength across divisions Home outperformed apparel; HomeGoods comps +4%, margin up 70 bps Home momentum improving
Regional TrendsInternational comps +7% (EU strength) Broadly strong; buybacks/dividends Canada comps +5% with FX headwinds; EU/Australia strong; Spain entry planned next year International steady-to-improving
Pricing Strategy/Value GapEmphasis on treasure-hunt/value Continued focus Preserve value gap vs full-price retail; retail adjustments where appropriate; merchants buy “retail-backwards” Reinforced
Capital Returns~$1.0B returned in Q3 $4.1B in FY25; new $2.5B buyback authorization $1.0B returned in Q1; dividend raised to $0.425 Ongoing strength

Management Commentary

  • Strategic confidence: “I am very pleased with our first quarter performance… both profitability and earnings per share were above our expectations… The second quarter is off to a strong start…” — Ernie Herrman .
  • Mitigation playbook: “We believe we can offset the significant incremental pressures we have seen and expect to see from tariffs… primarily through our buying process, our ability to adjust our ticket while maintaining our value gap, and diversify our sourcing… plus cost efficiencies and productivity” — John Klinger .
  • Merchandising and value: “Our buyers work retail-backwards… we will always ensure that we are below… the out-the-door price at traditional retailers” — Ernie Herrman .

Q&A Highlights

  • Tariffs and Q2 headwind: Q2 most impacted due to orders placed pre-tariff; mitigation efforts underway; some hedge headwinds from Q1 expected to reverse in back half .
  • Direct imports and sourcing: Direct-sourced product <10% of business; flexibility to shift sourcing and reduce upfront buys to capitalize on back-half opportunities .
  • Inventory and pricing: Availability “outstanding”; flexibility to adjust pricing to preserve value gap; opportunistic buying close to market amid vendor “uneasiness” .
  • Gross margin drivers: Q1 hedge mark-to-market drove YoY contraction; back-half reversal expected as invoices are paid; Q2 gross margin guide includes mitigation .
  • Freight: Ocean freight ~20–25% of freight; no cost increases observed yet; forecasts reflect current rates .
  • Demand and customer mix: Transactions driving comps; balanced baskets; slight lean to lower-income demographics on store performance bands .

Estimates Context

  • Q1 FY26 beat vs consensus: EPS $0.92 vs $0.907 consensus; Revenue $13.11B vs $13.03B consensus; modest but clear beats, consistent with “above plan” commentary . Consensus values from S&P Global.*
  • Estimate adjustments: With Q2 tariff headwind embedded and maintained FY26 EPS guide, street models likely hold FY26 EPS range; upside skew for 2H as mitigation, improved FX timing, and strong inventory availability support margins and sales .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • TJX delivered a clean beat versus consensus and plan, with comps at the high end and EPS modestly above street, reinforcing off-price resilience amid macro/tariff uncertainty .
  • Near-term pressure in Q2 from tariffs is explicitly guided, but mitigation and hedge timing support a better back half; FY26 EPS guidance maintained, indicating confidence in levers (buying, pricing, sourcing, productivity) .
  • HomeGoods strength and international momentum (Europe/Australia) diversify growth; all divisions posted transaction-driven comp increases, a healthy sign for traffic and share gains .
  • Inventory levels and availability are strong; per-store inventory +7% positions TJX to flow fresh assortments, supporting the treasure-hunt experience and value proposition in 2H .
  • Capital returns remain robust and visible—13% dividend increase and $2.0–$2.5B buybacks planned—providing downside support and compounding shareholder value .
  • Watch Q2 gross margin and pretax margin execution vs guidance, and monitor FX hedge reversal and tariff mitigation efficacy; strong Q2 start suggests sales support for margin plans .
  • Medium-term thesis intact: TJX’s flexible off-price model, vast vendor network, and disciplined “retail-backwards” buying underpin durable market share gains and mid-teens ROIC through cycles .