TJX COMPANIES INC (NYSE:TJX) Exceeds Q2 Expectations with Strong Sales and Profit Growth

The TJX Companies Inc (NYSE:TJX) delivered a robust second-quarter performance that exceeded analyst expectations, reporting revenue of $14.4 billion against estimates of $14.27 billion. This represents a 7% year-over-year increase, demonstrating the off-price retailer's continued appeal to cost-conscious consumers. Earnings per share came in at $1.10, significantly surpassing the $1.02 consensus estimate and marking a 15% improvement from the prior year's $0.96.

Comparable store sales grew 4% across all divisions, with particularly strong performances in international markets. TJX Canada saw comp sales increase 9%, while TJX International (Europe and Australia) posted 5% growth. The company's pretax profit margin reached 11.4%, exceeding internal plans by 0.9 percentage points and improving 0.5 points from last year's second quarter.

Key Financial Highlights

The company's performance was driven by several factors that contributed to both top-line growth and margin expansion. Gross profit margin improved to 30.7% from 30.4% in the prior year, primarily due to favorable currency hedging effects. Selling, general and administrative expenses decreased as a percentage of sales to 19.5% from 19.8%, reflecting operational efficiencies and timing benefits.

Inventory levels increased to $7.4 billion from $6.5 billion a year earlier, with per-store inventory up 10% as the company capitalized on what management described as "excellent buying opportunities" in the marketplace. This positions TJX well for the fall and holiday seasons with fresh merchandise assortments.

Updated Guidance and Market Reaction

Management raised full-year guidance for both pretax profit margin and earnings per share. The company now expects full-year EPS in the range of $4.52 to $4.57, representing 6-7% growth over the prior year's $4.26. This updated guidance reflects better-than-expected second-quarter results and a smaller negative impact from foreign currency exchange rates.

The market responded positively to these results, with shares trading higher in pre-market activity. This reaction suggests investors are pleased with the company's ability to exceed expectations while navigating ongoing challenges such as tariff pressures and currency fluctuations.

Division Performance Breakdown

• Marmaxx (TJ Maxx, Marshalls, Sierra) delivered $8.84 billion in sales, up 5% year-over-year with 3% comparable sales growth • HomeGoods segment generated $2.29 billion, a 9% increase with 5% comp growth • TJX Canada achieved $1.38 billion in sales, an 11% increase with 9% comp growth • TJX International reached $1.89 billion, a 13% increase with 5% comp growth

Capital Returns and Outlook

TJX returned $1.0 billion to shareholders during the quarter through $515 million in stock repurchases and $474 million in dividends. For the first half of the fiscal year, total shareholder returns reached $2.0 billion. The company continues to expect repurchases of $2.0 to $2.5 billion for the full fiscal year.

For the third quarter, TJX anticipates consolidated comparable sales growth of 2-3% and EPS in the range of $1.17 to $1.19, which would represent 3-4% growth over the prior year's $1.14. This guidance assumes the company can offset expected tariff pressures throughout the fiscal year.

For more detailed earnings information and future estimates, readers can review the comprehensive data available on the TJX earnings estimates page.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.