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TJX COMPANIES INC /DE/ (TJX)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY25 delivered consolidated comps +5% driven by higher transactions, gross margin +100 bps YoY (vs adjusted), and diluted EPS $1.23; pretax margin 11.6% came in 70 bps above the high end of plan on lower shrink and expense leverage. Bold beat vs company plan on Q4 EPS and pretax margin.
  • Net sales were $16.35B, roughly flat vs prior-year’s 14-week Q4; Canada (+10% comps) and International (+7%) outperformed; Home and accessories outpaced apparel in Q4.
  • FY26 guide: comps +2–3%, pretax margin 11.3–11.4%, EPS $4.34–$4.43 (with ~3% EPS growth headwind from FX), and Q1 FY26 EPS $0.87–$0.89 on timing of expenses, hedge reversal, and lapping last year’s reserve release.
  • Capital returns ramp: Board increased quarterly dividend by 13% to $0.425 (payable June 5, 2025) and plans $2.0–$2.5B buybacks in FY26; long-term store opportunity raised to ~7,000 globally.

What Went Well and What Went Wrong

What Went Well

  • Broad-based strength: Q4 comps +5% from higher transactions across all divisions; Canada +10% and International +7% led, supported by late gift flows and strong post-Christmas sales. “Comp increases…driven by an increase in customer transactions” and strong execution in Canada/Europe.
  • Margin upside: Pretax margin 11.6% was 70 bps above plan on lower shrink and mark-on; gross margin 30.5% up ~100 bps vs adjusted prior-year.
  • Strategic momentum and returns: 5,000+ stores, elevated store growth potential to ~7,000, FY25 operating cash flow $6.1B, and $4.1B returned to shareholders; dividend up 13% and FY26 buybacks $2.0–$2.5B.

What Went Wrong

  • Expense pressure: SG&A rose 30 bps YoY to 19.2% on incremental wage/payroll; Q1 FY26 SG&A guided up 80 bps YoY to 20.0%.
  • Q1 FY26 reset: EPS guide $0.87–$0.89 (down 4–6% YoY), pretax margin 10.0–10.1% (down 100–110 bps) on hedge timing, lapping reserve release, and wage/payroll; interest deleveraging impacts pretax by ~20 bps.
  • FX/tariff headwinds: FY26 outlook embeds ~1% sales and ~20 bps pretax margin headwind from FX and transactional FX; small H1 drag from current China tariffs on committed buys.

Financial Results

MetricQ4 FY2024 (oldest)Q2 FY2025Q3 FY2025Q4 FY2025 (newest)
Net Sales ($USD Billions)$16.411 $13.468 $14.063 $16.350
Diluted EPS ($USD)$1.22 $0.96 $1.14 $1.23
Pretax Profit Margin (%)11.2% 10.9% 12.3% 11.6%
Gross Profit Margin (%)29.8% 30.4% 31.6% 30.5%
SG&A (% of Sales)18.9% 19.8% 19.5% 19.2%
Comparable Store Sales (%)+5% +4% +3% +5%

Segment breakdown – Q4 FY2025

DivisionNet Sales ($USD Millions)Segment Profit ($USD Millions)Q4 Comps (%)
Marmaxx (U.S.)$9,971 $1,400 +4%
HomeGoods (U.S.)$2,851 $342 +5%
TJX Canada$1,450 $170 +10%
TJX International$2,078 $151 +7%
Total$16,350 $2,063 +5%

Operating KPIs (quarterly)

KPIQ2 FY2025Q3 FY2025Q4 FY2025
Operating Cash Flow ($USD Billions)$1.6 $1.0 $2.7
Cash & Cash Equivalents ($USD Billions)$5.25 $4.718 $5.335
Total Inventories ($USD Billions)$6.5 $8.4 $6.4
Share Repurchases ($USD Millions)$559 $574 $853
Dividends Paid ($USD Millions)$423 $423 $421

Notes: Q4 FY2025 pretax and gross margins referenced against adjusted prior-year metrics that exclude the extra week benefit.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChangeNotes
Diluted EPS ($)Q4 FY2025$1.12–$1.14 $1.23 Raised (beat)Above plan on lower shrink and expense leverage.
Pretax Margin (%)Q4 FY202510.8–10.9% 11.6% Raised (beat)+70 bps vs high end of plan; shrink favorability.
Diluted EPS ($)FY2025$4.15–$4.17 (raised at Q3) $4.26 Raised (beat)Mark-on strength, lower freight, shrink benefit.
Pretax Margin (%)FY2025~11.3% (raised at Q3) 11.5% Raised (beat)+60 bps vs adjusted prior year.
Comps (%)FY2026—+2% to +3% NewE-commerce to be included (small impact).
Pretax Margin (%)FY2026—11.3%–11.4% New (down vs FY25)~20 bps FX/transactional FX headwind.
Diluted EPS ($)FY2026—$4.34–$4.43 New~3% EPS growth headwind from FX; tax 25.1%; net interest ~$98M.
Diluted EPS ($)Q1 FY2026—$0.87–$0.89 New (down YoY)Hedge timing, lapping reserve release, wage/payroll; interest deleverage ~20 bps.
Dividend per share ($)FY2026$0.375 (FY25 quarterly declared) $0.425 (declared; payable June 5, 2025) Raised 13%28th increase in 29 years.
Share RepurchasesFY2026~$2.25–$2.5B expected in FY25 $2.0–$2.5B planned; new $2.5B authorization Maintained/New$1.1B remaining under prior program; new authorization approved.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25)Previous Mentions (Q3 FY25)Current Period (Q4 FY25)Trend
Inventory availability & flow“Excellent buying opportunities… strongly positioned to ship fresh… fall/holiday” “Outstanding availability… ever-changing gifts at excellent values” “Availability… fantastic; well positioned to flow fresh assortments this spring; per-store inventory up 1%” Improving/favorable
Shrink——Favorability across divisions; small improvement planned in FY26 via initiatives Improving
Tariffs/macro——Small H1 FY26 headwind from current China tariffs; buyers focus on value gap; confident to navigate Manageable headwind
Product/category performanceMarmaxx comps +5%; HomeGoods +2% International comps +7% Home/accessories stronger than apparel; gift categories executed well Home momentum strengthening
Regional performanceMixed; Canada +2% International +7% comps Canada +10%; International +7% comps; tactical late gift flows drove strength Canada/Intl leadership
E-commerce comps inclusion——FY26 comps to include e-commerce (small impact) Methodology change
Real estate/store growth5,000th store milestone Spain entry early 2026; store count up 56 QoQ Capex $2.1–$2.2B; ~130 net new stores; ~500 remodels; long-term potential ~7,000 stores Accelerating expansion
FX impactNeutral in Q2 +1% sales and ~$0.01 EPS tailwind Neutral in Q4/FY25; FY26 headwind to sales, pretax margin, and EPS growth Turning to headwind

Management Commentary

  • “Our fourth quarter sales, profitability, and earnings per share were all well above our expectations… comp store sales growth of 5%… due to strong increases in comp sales and customer transactions at every division.” — Ernie Herrman
  • “Gross margin was up 100 basis points versus last year's adjusted… primarily driven by… year-end true-up of shrink expense and strong mark-on.” — John Klinger
  • “We are increasing our long-term store potential to a total of 7,000 stores… HomeGoods to 1,800; Sierra to 325; Spain to 100 stores.” — Ernie Herrman
  • “Starting in fiscal ’26, our comp store sales will include e-commerce… we do not expect e-commerce to have a material impact.” — John Klinger
  • “Our buyers assess retail and work backwards to cost… focus on the value gap… confident we can navigate the current China tariff environment.” — Ernie Herrman

Q&A Highlights

  • Canada/International strength: Tactical late gift flow and healthy home categories drove outsized Q4 comps; management expects continued solid execution given seasoned teams.
  • Customer mix and acquisition: Transaction growth continues, skewing toward ages 18–34; market share gains across income cohorts amid competitive closures.
  • Merchandise margin and tariffs: Team focuses on mark-on via value-first buying; tariff impact expected small and manageable over medium/long-term.
  • Flow-through and real estate: Long-term model of flat to up ~10 bps pretax margin leverage at 3–4% comps (ex outsized expenses); sufficient real estate availability including rural markets and large-box closures.
  • Category performance: Home and accessories outperformed apparel; Europe sourcing in Home is a differentiator to drive brand/quality and margin.

Estimates Context

  • Wall Street consensus via S&P Global (Primary EPS Consensus Mean and Revenue Consensus Mean for Q4 FY2025 and prior two quarters) was unavailable at the time of analysis due to SPGI daily request limit exceeded; therefore, formal “vs. consensus” beats/misses are not included here. Where relevant, we benchmarked against company guidance and plan. [GetEstimates attempt failed — Values retrieved from S&P Global unavailable]
  • Relative to company guidance: Q4 EPS $1.23 vs $1.12–$1.14 guided (beat); Q4 pretax margin 11.6% vs 10.8–10.9% guided (beat); FY25 EPS $4.26 vs $4.15–$4.17 guided (beat).

Key Takeaways for Investors

  • Strong quarter with broad-based transaction-driven comps and significant margin upside from shrink favorability and mark-on; the setup remains conducive to off-price value leadership.
  • Near-term caution: Q1 FY26 guide calls for EPS down 4–6% YoY on hedge timing, wage/payroll, and lapping reserve release; traders should watch for normalization across the last nine months where EPS is guided +4–6%.
  • FX headwinds embedded in FY26 (sales ~1% and EPS growth ~3% headwind) could modestly weigh on reported growth; underlying demand trends remain resilient.
  • Category mix favors Home/accessories; continued strength here and Europe-sourced differentiation may sustain merchandise margin tailwinds.
  • Canada and International momentum is a positive signal for global diversification, with Spain entry in 2026 and expanding footprint in Germany and other European markets.
  • Capital returns are a powerful support: dividend raised 13% to $0.425 and $2.0–$2.5B buybacks planned, underpinned by $6.1B FY25 operating cash flow.
  • Medium-term thesis: Scale, flexible buying, wide demographic appeal, and expanded store potential (~7,000) underpin sustained share gains; monitor shrink trajectory, wage inflation, tariffs, and FX as the key variables.