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TJX COMPANIES INC /DE/ (TJX)·Q2 2026 Earnings Summary

Executive Summary

  • TJX delivered a strong Q2 FY26: net sales $14.40B (+7% y/y), comps +4%, pretax margin 11.4% (+50 bps y/y), and diluted EPS $1.10 (+15% y/y), all above plan .
  • TJX beat Wall Street consensus on both revenue ($14.40B vs $14.17B*) and EPS ($1.10 vs $1.01*); gross margin rose to 30.7% aided by favorable hedges, while SG&A leveraged on operational efficiencies .
  • Management raised FY26 guidance: pretax margin to 11.4%-11.5% (from 11.3%-11.4%) and EPS to $4.52-$4.57 (from $4.34-$4.43), with comps now +3% and sales $59.3-$59.6B .
  • Key catalysts: broad-based transaction growth across divisions, strength in HomeGoods and Canada, favorable FX tailwinds to EPS in Q2 (+$0.02), and confidence in tariff mitigation via buying flexibility and pricing discipline .
    Note: Consensus values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Broad-based demand and traffic: “Customer transactions were up at every division…strong demand at each of our U.S. and international businesses” .
  • Margin execution above plan: pretax margin 11.4% came in 90 bps above the high end of plan, driven by lower-than-expected tariff costs, sales leverage, and timing of expenses .
  • Home outperformance and Canada strength: HomeGoods comps +5% and segment margin +90 bps; TJX Canada comps +9% with segment margin up ~100 bps (constant currency) .

Management quotes:

  • CEO: “Sales, pretax profit margin, and earnings per share were all above our plan…we are raising our full-year guidance” .
  • CFO: “Gross margin increased 30 basis points…Merchandise margin was flat despite higher tariff costs” .
  • CEO: “The third quarter is off to a strong start, and I am very confident…as we enter the second half of the year” .

What Went Wrong

  • Tariffs remain a headwind: Merchandise margin flat amid higher tariff costs; management continues to assume tariffs remain in place and must be offset .
  • Interest income deleverage: net interest income reduced pretax margin by ~10 bps y/y in Q2 .
  • Timing/seasonal factors: June saw weather-related softness; Q3 guide implies pretax margin down 20–30 bps y/y due to reversal of timing benefits and average retail dynamics .

Financial Results

Multi-Period Comparison (oldest → newest)

MetricQ4 FY25Q1 FY26Q2 FY26
Revenue ($USD Billions)$16.350 $13.111 $14.401
Diluted EPS ($)$1.23 $0.92 $1.10
Gross Margin %30.5% 29.5% 30.7%
Pretax Profit Margin %11.6% 10.3% 11.4%
SG&A % of Sales19.2% 19.4% 19.5%
Net Income ($USD Billions)$1.398 $1.036 $1.243

Q2 FY26 Actual vs Consensus

MetricActual Q2 FY26Consensus Q2 FY26
Revenue ($USD Billions)$14.401 $14.166*
Diluted EPS ($)$1.10 $1.014*

Note: Consensus values marked with * retrieved from S&P Global.

Comparable Sales by Division (Q2)

DivisionFY2026FY2025
Marmaxx (U.S.)+3% +5%
HomeGoods (U.S.)+5% +2%
TJX Canada+9% +2%
TJX International+5% +1%
TJX Total+4% +4%

Net Sales by Division (Q2)

DivisionQ2 FY2026 ($MM)Q2 FY2025 ($MM)Reported GrowthConstant Currency Growth
Marmaxx (U.S.)$8,841 $8,445 +5% N.A.
HomeGoods (U.S.)$2,286 $2,101 +9% N.A.
TJX Canada$1,381 $1,244 +11% +11%
TJX International$1,893 $1,678 +13% +7%
TJX Total$14,401 $13,468 +7% +6%

Segment Profit (Q2)

SegmentQ2 FY2026 ($MM)Q2 FY2025 ($MM)
Marmaxx$1,254 $1,191
HomeGoods$228 $191
TJX Canada$221 $187
TJX International$99 $73
Total Segment Profit$1,802 $1,642

KPIs and Balance Sheet Highlights

KPIQ2 FY26Q1 FY26Notes
Operating Cash Flow ($USD Billions)$1.8 $0.394 CFO stated strong OCF generation
Cash and Cash Equivalents ($USD Billions)$4.639 $4.255 End of period cash
Inventories ($USD Billions)$7.372 $7.127 Per-store inventories +10% y/y
Share Repurchases ($USD Billions)$0.515 $0.613 4.1M shares in Q2; 5.1M in Q1
Dividends Paid ($USD Billions)$0.474 $0.420 Quarterly dividend declared $0.425

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated CompsFY26+2% to +3% +3% Raised
Consolidated Sales ($B)FY26$58.1–$58.6 $59.3–$59.6 Raised
Pretax Profit MarginFY2611.3%–11.4% 11.4%–11.5% Raised
Gross MarginFY2630.4%–30.5% 30.5%–30.6% Raised
SG&A (% of Sales)FY2619.3% 19.4% Slightly higher
Net Interest Income ($MM)FY26~$98 ~$108 Higher
Tax RateFY26~25.1% ~24.5% Lower
Diluted EPS ($)FY26$4.34–$4.43 $4.52–$4.57 Raised
Shares (Diluted, avg)FY26~1.13B ~1.13B Maintained
Q3 CompsQ3 FY26N/A+2% to +3% New detail
Q3 Sales ($B)Q3 FY26N/A$14.7–$14.8 New detail
Q3 Pretax MarginQ3 FY26N/A12.0%–12.1% (down 20–30 bps y/y) New detail
Q3 Gross MarginQ3 FY26N/A31.6%–31.7% New detail
Q3 SG&A (% of Sales)Q3 FY26N/A19.8% New detail
Q3 Net Interest Income ($MM)Q3 FY26N/A~$25 New detail
Q3 Tax RateQ3 FY26N/A~24.7% New detail
Q3 Diluted EPS ($)Q3 FY26N/A$1.17–$1.19 New detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25, Q1 FY26)Current Period (Q2 FY26)Trend
Tariffs/MacroPlanned FY26 margin under pressure; mitigation via buying/pricing; Q2 most impacted by committed direct imports Merchandise margin flat despite higher tariffs; pretax margin +90 bps vs plan on lower-than-expected tariff costs; assume tariffs remain Improving mitigation; continued headwind assumed
FX & HedgesQ1 gross margin down 50 bps due to hedge mark-to-market; FX neutral to sales, -$0.02 EPS in Q1 Q2 gross margin +30 bps on favorable hedges; FX +$0.02 to EPS Favorable Q2; timing shifts between quarters
Pricing & Value GapBuyers price to maintain value vs “out-the-door” at peers; flexible SKU-by-SKU Maintain value perception; selective pricing adjustments; strong consumer value surveys Stable, disciplined
Inventory AvailabilityStrong availability; per-store inventories +7% in Q1 Outstanding availability; per-store inventories +10%; positioned for fall/holiday Strengthening
Product/Regional TrendsHome comps resilience vs industry; international strength; younger customer acquisition HomeGoods +5% comps; Canada +9%; International +5% comps; balanced across geographies Positive breadth
Shrink/Accrual TimingLower shrink benefited FY25; accrual timing benefits vs reversals across quarters Q3 benefits from inventory cap; Q4 reversal of shrink accrual favorability Normalization in H2
Gifting StrategyBuilding momentum; seasonal execution focus Elevated focus on gifting year-round; strong storytelling in HomeGoods back-to-college Strategic emphasis increasing
Real Estate & RemodelsFY25: +131 stores; plan ongoing On track for >130 net new stores; ~500 remodels; attractive relocation opportunities Continued expansion

Management Commentary

  • “With our strong second quarter profit results, we are raising our full-year guidance for both pretax profit margin and earnings per share.” — Ernie Herrman, CEO .
  • “Gross margin increased 30 basis points versus last year, primarily due to favorable hedges. Merchandise margin was flat despite higher tariff costs.” — John Klinger, CFO .
  • “Again this quarter, customer transactions increased at every division.” — John Klinger .
  • “We see outstanding buying opportunities…which also gives me great confidence in our plans for the fall and holiday selling seasons.” — Ernie Herrman .

Q&A Highlights

  • Pricing and value gap: TJX does not top-down dictate pricing; buyers preserve value gap vs competitors and adjust selectively SKU-by-SKU, helping mitigate tariffs without eroding value perception .
  • Margin bridge: Q3 pretax margin expected down 20–30 bps y/y due to reversal of timing benefits and average retail dynamics; Q4 improves with higher sales volume but sees shrink accrual reversal .
  • Traffic and transactions: Transactions up across divisions; basket slightly higher in Marmaxx vs Q1; strong start to Q3 .
  • Store growth: >130 net new stores planned; relocations and ~500 remodels support consistent customer experience and competitiveness .
  • Gifting and merchandising: Year-round gifting strategy and improved in-store storytelling driving impulse and multi-item purchases, notably in HomeGoods back-to-college .

Estimates Context

  • Q2 FY26 beat: Revenue $14.401B vs $14.166B*; EPS $1.10 vs $1.014* .
  • Forward context: Company guides Q3 EPS $1.17–$1.19 and sales $14.7–$14.8B; Street Q3 consensus EPS ~$1.219* and revenue ~$14.86B*, suggesting modest EPS conservatism relative to consensus and alignment on sales .
PeriodEPS Consensus Mean ($)Revenue Consensus Mean ($B)
Q3 FY261.219*14.858*
Q4 FY261.373*17.331*

Note: Consensus values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Broad-based strength and transaction growth underpin a resilient comp trajectory (+4% in Q2), with HomeGoods and Canada leading; supports market share gains amid peers’ price hikes and promotions .
  • Margin quality improved versus plan: favorable hedges and expense leverage offset tariff headwinds; pretax margin raised to 11.4–11.5% for FY26 .
  • Guidance raise is a clear positive catalyst: FY26 EPS lifted to $4.52–$4.57 and sales to $59.3–$59.6B; FX less negative vs prior guide .
  • Inventory positioning is a tailwind: per-store inventory +10% y/y and outstanding availability supports fall/holiday flow and gifting strategy .
  • Operational discipline: pricing model preserves value gap, buyers’ hand-to-mouth agility mitigates tariffs, and SG&A efficiencies contribute to leverage .
  • H2 cadence: expect Q3 margin modestly down y/y on timing effects, with improvement in Q4; watch shrink accrual dynamics and average retail impacts .
  • Capital returns remain robust: ~$2.0–$2.5B buybacks expected in FY26; Q2 returned $1.0B via buybacks and dividends .