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TJX COMPANIES INC /DE/ (TJX)·Q3 2026 Earnings Summary

Executive Summary

  • Q3 FY26 was a clean beat with revenue $15.12B (+7% YoY) and diluted EPS $1.28 (+12% YoY), both above S&P Global consensus; consolidated comps rose 5% with strength across every division . EPS $1.28 vs $1.22* and revenue $15.12B vs $14.86B*; pre-tax margin expanded 40 bps YoY to 12.7% on merchandise margin gains and lower freight, partially offset by higher SG&A rate .
  • Management raised FY26 outlook: comps to +4%, pre-tax margin to 11.6%, and EPS to $4.63–$4.66 (from $4.52–$4.57 set in Q2), citing broad-based momentum and strong holiday start .
  • Q4 guide embeds comps +2–3%, pre-tax margin 11.7–11.8%, EPS $1.33–$1.36; gross margin 30.5–30.6%, SG&A ~18.9%, tax rate 25.4%, share count ~1.12B, and net interest income ~$26M .
  • Setup into holiday is favorable: “off the charts” branded inventory availability, continued pricing discipline to protect value perception, and targeted marketing; tariff pressures fully mitigated in Q3 and expected to be offset again in Q4 .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based comp strength: consolidated comps +5% with Marmaxx +6%, HomeGoods +5%, Canada +8%, International +3%; “strength at every division” and market share gains across geographies .
    • Profitability outperformance: pre-tax margin 12.7% (+40 bps YoY) came in 60 bps above the high end of plan, driven by lower freight and expense leverage; EPS $1.28 up 12% .
    • Holiday positioning and inventory: management highlighted “off the charts” branded inventory availability and strong early Q4 start, with multiple weekly flows and gift positioning across “good, better, best” brands .

  • What Went Wrong

    • SG&A deleverage: SG&A was 20.1% of sales (+60 bps YoY) on higher store wages, a TJX Foundation contribution, and higher incentive accruals .
    • Shrink compare will cap Q4 gross margin expansion vs recent quarters due to a tough comparison to last year’s favorable shrink adjustment .
    • Transactional FX pressure in Canada modestly weighed on segment margin; management also flagged the execution risk of “not getting over our skis” on buying amid strong availability .

Financial Results

MetricQ1 2026Q2 2026Q3 2026
Revenue ($B)$13.11 $14.40 $15.12
Revenue YoY Growth+5% +7% +7%
Diluted EPS ($)$0.92 $1.10 $1.28
Pre-tax Profit Margin (%)10.3% 11.4% 12.7%
Gross Profit Margin (%)29.5% 30.7% 32.6%
SG&A as % of Sales19.4% 19.5% 20.1%
Consolidated Comp Sales (%)+3% +4% +5%
Operating Cash Flow ($B)$0.39 $1.80 $1.50

Segment Net Sales ($ in billions)

DivisionQ1 2026Q2 2026Q3 2026
Marmaxx (U.S.)$8.05 $8.84 $9.04
HomeGoods (U.S.)$2.25 $2.29 $2.54
TJX Canada$1.14 $1.38 $1.49
TJX International$1.66 $1.89 $2.05
Total$13.11 $14.40 $15.12

Comparable Sales by Division (YoY)

DivisionQ1 2026Q2 2026Q3 2026
Marmaxx (U.S.)+2% +3% +6%
HomeGoods (U.S.)+4% +5% +5%
TJX Canada+5% +9% +8%
TJX International+5% +5% +3%
TJX Consolidated+3% +4% +5%

Additional KPIs

KPIQ1 2026Q2 2026Q3 2026
Total Inventories ($B)$7.13 $7.37 $9.35
Per-Store Inventory YoY+7% +10% +8%
Cash & Equivalents ($B)$4.26 $4.64 $4.64
Share Repurchase ($/Shares)$613M / 5.1M $515M / 4.1M $594M / 4.2M
Dividends Paid ($)$420M $474M $472M

Estimates vs Actuals (S&P Global consensus)

MetricQ1 2026Q2 2026Q3 2026
Revenue Actual ($B)13.11*14.40*15.12*
Revenue Consensus ($B)13.03*14.17*14.86*
Delta ($B)+0.08 (Beat)*+0.23 (Beat)*+0.26 (Beat)*
EPS Actual ($)0.92*1.10*1.28*
EPS Consensus ($)0.91*1.01*1.22*
Delta ($)+0.01 (Beat)*+0.09 (Beat)*+0.06 (Beat)*

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (as of Q2)Current Guidance (Q3)Change
Consolidated CompsFY26+3% +4% Raised
Pre-tax Profit MarginFY2611.4%–11.5% 11.6% Raised
Diluted EPSFY26$4.52–$4.57 $4.63–$4.66 Raised
Gross MarginFY26N/A30.9% (vs 30.6% LY) New detail
SG&AFY26N/A19.5% (+10 bps YoY) New detail
Net Interest IncomeFY26N/A$111M (+10 bps PT margin) New detail
CompsQ4 FY26N/A+2% to +3% New
Pre-tax Profit MarginQ4 FY26N/A11.7%–11.8% New
Gross MarginQ4 FY26N/A30.5%–30.6% New
SG&AQ4 FY26N/A~18.9% New
Tax RateQ4 FY26N/A~25.4% New
EPSQ4 FY26N/A$1.33–$1.36 New
Share CountQ4 FY26N/A~1.12B New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Tariffs/MitigationQ1 and Q2 assumed significant tariff pressure but expected to offset; Q2 margin above plan helped by lower-than-expected tariff costs .Fully offset tariff pressure in Q3; expect same in Q4 .Improved confidence in mitigation.
Supply Chain/FreightQ2 gross margin +30 bps helped by favorable hedges; efficiencies noted .Freight/ocean rates lower; efficiencies aided margins; freight outlook depends on carriers .Tailwind in Q3; visibility limited.
AI/TechnologyNot highlighted in Q1/Q2 PRs.Active testing/deployment across fraud/security, in-store analytics, HR, marketing, buying support, IT; cross-functional governance in place .New, building capability.
Product/Price/MixQ1–Q2 comps across divisions; value proposition stressed .Basket and transactions both up; ticket driven more by price than mix; value perception “extremely strong” .Healthy demand with pricing power while protecting value.
Regional TrendsCanada +9% comps in Q2; International +5% .Canada +8% comps with FX transactional pressure; International +3% comps, margin +190 bps (cc) .Canada strong; International steady comps with better margin.
Store Growth/ExpansionStore count at 5,134 in Q2 .Store count 5,191 (+57 QoQ); Spain entry planned spring 2026; long-term 7,000-store target .Accelerating footprint; new country entry.
ShrinkNot discussed.Q4 gross margin expansion tempered by tough shrink compare to favorable adjustment last year .Near-term headwind to GM YoY expansion.
Holiday MarketingNot discussed.Emphasis on gifting/value and digital marketing; Marshalls launched “It’s Giving Gifts!” holiday gift guide (brand campaign) .Heightened holiday activation.

Management Commentary

  • “Sales, pretax profit margin, and earnings per share all exceeded our expectations… With our outperformance in the third quarter, we are raising our sales, pretax profit margin, and earnings per share guidance for the full year.” — Ernie Herrman, CEO .
  • “Gross margin increased 100 basis points versus last year… driven by lower freight costs, expense efficiencies, and expense leverage on sales… we offset all the tariff pressure we saw in the third quarter.” — Management .
  • “Availability of quality branded merchandise has been exceptional, and we are in an excellent position to flow a fresh assortment of goods… [we] will be a top destination for gifts.” — CEO .
  • “We are pretty aggressively evaluating and testing and deploying AI… enhancing our fraud detection… in-store analytics… HR processes… marketing optimization… supporting buying and planning.” — CEO .
  • “We still see significant store growth ahead with a long-term store target of 7,000 stores… planned entry into Spain in the spring of 2026.” — CEO .

Q&A Highlights

  • Comp drivers and pricing: Both transactions and basket increased; ticket growth driven more by price than mix, while maintaining strong value perception scores .
  • Q4 gross margin cadence: Year-over-year GM expansion lower than recent quarters due to lapping a favorable shrink adjustment last year; otherwise underlying trends healthy .
  • Tariffs and category mix: Company selectively de-emphasizes categories short-term if value can’t be maintained under tariffs, then re-engages as the cycle normalizes; confident in continued mitigation .
  • Customer and new acquisition: Balanced growth from new, infrequent, and frequent customers; weather aided certain apparel categories; marketing aimed at converting new and lapsed shoppers .
  • AI strategy: Early but expanding use cases across security, analytics, HR, marketing, buying support, and IT, governed cross-functionally .

Estimates Context

  • Q3 beat across EPS and revenue versus S&P Global consensus: EPS $1.28 vs $1.22*; revenue $15.12B vs $14.86B*; EBITDA $2.20B vs $2.08B* (management’s drivers: lower freight, strong merchandise margin, expense leverage) .
  • Trajectory: TJX also beat in Q1 and Q2 on both EPS and revenue; with raised FY26 guidance, Street models likely need to move higher on FY EPS, gross margin, and Q4 revenue/comp assumptions consistent with the company’s guide .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat and raise: Broad-based 5% comp and 100 bps GM expansion powered a clean Q3; FY26 guide raised across comps, margins, and EPS—supportive for estimate revisions and multiple resilience .
  • Holiday setup strong: Exceptional branded inventory availability, multi-week flow, and targeted digital marketing position TJX well for gifting demand and share gains .
  • Freight/tariffs balanced: Freight is a current tailwind; tariff headwinds fully mitigated in Q3 and expected to be offset in Q4, supporting margin durability .
  • Watch SG&A and shrink compares: SG&A rate rose 60 bps on wages/foundation/incentives; Q4 GM expansion will be capped by a difficult shrink compare, worth monitoring versus consensus gross margin trajectories .
  • Structural growth intact: 7,000-store long-term target, Spain entry in spring 2026, and consistent new customer capture underpin multi-year share gains .
  • Pricing discipline without value erosion: Ticket up with selective pricing moves while value perception scores remain “extremely strong,” reinforcing off-price differentiation .
  • Capital returns ongoing: ~$2.5B FY26 buyback expected; strong cash generation and balance sheet support continued repurchases and dividends .