Q2 FY2027
Filed Aug 19, 2026TJX reports Q2 FY27 results with 4% above-plan comparable sales growth, pretax profit margin and diluted EPS well above plan, and increased full-year pretax profit margin and EPS guidance.
Second-quarter comparable sales increased 4% above plan, net sales increased 5%, GAAP pretax profit margin expanded 1.9 percentage points to 13.3%, and GAAP diluted EPS rose 24% to $1.36. Excluding the tariff-refund benefit, adjusted pretax profit margin increased 0.5 percentage points and adjusted EPS increased 11%, while the company raised full-year margin and EPS outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $15.2 billion | – | increase of 5% versus the second quarter of Fiscal 2026 |
| Net salesGAAP | $15,180 million | – | +5% |
| Consolidated comparable salesother | +4% | – | – |
| Gross profit marginGAAP | 33.4% | – | up 2.7 percentage points |
| Adjusted gross profit marginnon-GAAP | 31.4% | – | up 0.7 percentage points versus the prior year |
| Selling, general and administrative expensesGAAP | $3,085 million | – | – |
| SG&A costs as a percent of salesGAAP | 20.3% | – | up 0.8 percentage points |
| Adjusted SG&A costs as a percent of salesnon-GAAP | 19.7% | – | up 0.2 percentage points versus the prior year |
| Income before income taxesGAAP | $2,018 million | – | – |
| Pretax profit marginGAAP | 13.3% | – | up 1.9 percentage points |
| Adjusted pretax profit marginnon-GAAP | 11.9% | – | up 0.5 percentage points versus the prior year |
| Net incomeGAAP | $1.5 billion | – | – |
| Net incomeGAAP | $1,520 million | – | – |
| Diluted earnings per shareGAAP | $1.36 | – | up 24% |
| Adjusted diluted earnings per sharenon-GAAP | $1.22 | – | up 11% versus the prior year |
| Weighted average common shares, dilutedGAAP | 1,117 million | – | – |
| Cash dividends declared per shareGAAP | $0.480 | – | – |
| Marmaxx segment profitGAAP | $1,424 million | – | – |
| HomeGoods segment profitGAAP | $441 million | – | – |
| TJX Canada segment profitGAAP | $229 million | – | – |
| TJX International segment profitGAAP | $135 million | – | – |
| Total segment profitGAAP | $2,229 million | – | – |
| Marmaxx segment profit marginGAAP | 15.6% | – | – |
| HomeGoods segment profit marginGAAP | 17.6% | – | – |
| TJX Canada segment profit marginGAAP | 15.6% | – | – |
| TJX International segment profit marginGAAP | 6.4% | – | – |
| Total inventoriesGAAP | $7.9 billion | – | – |
| Consolidated inventories on a per-store basisother | up 2% on a reported basis | – | up 2% on a reported basis, and up 3% on a constant currency basis, versus last year |
| Operating cash flowGAAP | $2.2 billion | – | – |
| First-half net salesGAAP | $29.5 billion | – | increase of 7% versus the first half of Fiscal 2026 |
| First-half consolidated comparable salesother | +5% | – | – |
| First-half net incomeGAAP | $2.9 billion | – | – |
| First-half diluted earnings per shareGAAP | $2.55 | – | up 26% |
| First-half adjusted diluted earnings per sharenon-GAAP | $2.41 | – | up 19% versus the prior year |
| First-half net cash provided by operating activitiesGAAP | $3,345 million | – | – |
| First-half property additionsGAAP | $1,159 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Marmaxx (U.S.)Comparable sales increased +1%; the company stated that sales at Marmaxx were below its expectations. | $9,109 million | – | +3% |
| HomeGoods (U.S.)Comparable sales increased +7%; the company stated HomeGoods delivered a terrific comp sales increase. | $2,507 million | – | +10% |
| TJX CanadaComparable sales increased +6%; adjusted segment profit margin on a constant currency basis was 16.3%. | $1,470 million | – | +6% reported sales growth; +8% sales growth on a constant currency basis |
| TJX International (Europe & Australia)Comparable sales increased +7%; adjusted segment profit margin on a constant currency basis was 7.3%. | $2,094 million | – | +11% reported sales growth; +10% sales growth on a constant currency basis |
Third Quarter Fiscal 2027 and Full Year Fiscal 2027 outlook
- NoteThird quarter Fiscal 2027 consolidated comparable sales: up 2% to 3%.
- NoteThird quarter Fiscal 2027 pretax profit margin: 12.8% to 12.9%.
- NoteThird quarter Fiscal 2027 adjusted pretax profit margin: 12.3% to 12.4%, excluding an expected net benefit of 0.5 percentage points from tariff refunds.
- NoteThird quarter Fiscal 2027 diluted earnings per share: $1.36 to $1.38.
- NoteThird quarter Fiscal 2027 adjusted diluted earnings per share: $1.30 to $1.32, excluding an expected net benefit of $.06 from tariff refunds.
- NoteFull year Fiscal 2027 consolidated comparable sales: up 3% to 4%.
- NoteFull year Fiscal 2027 pretax profit margin: 12.3% to 12.4%.
- NoteFull year Fiscal 2027 adjusted pretax profit margin: 12.0% to 12.1%, excluding an expected net benefit of 0.3 percentage points from tariff refunds.
- NoteFull year Fiscal 2027 diluted earnings per share: $5.31 to $5.36.
- NoteFull year Fiscal 2027 adjusted diluted earnings per share: $5.15 to $5.20, excluding an expected net benefit of $.16 from tariff refunds.
- NoteExpected Fiscal 2027 share repurchases: approximately $2.75 to $3.0 billion of TJX stock.
- NoteBeginning in Fiscal 2028, planned store opening growth: 4%.
- NoteLong-term global store target: 7,500 stores for existing retail banners in current countries.
Capital returns
- Returned a total of $1.3 billion to shareholders during the second quarter of Fiscal 2027.
- Repurchased and retired 5.1 million shares for a total of $798 million during the second quarter of Fiscal 2027.
- Paid $529 million in shareholder dividends during the second quarter of Fiscal 2027.
- Returned a total of $2.4 billion to shareholders during the first half of Fiscal 2027.
- Repurchased and retired 8.9 million shares for a total of $1.4 billion during the first half of Fiscal 2027.
- Paid $1.0 billion in shareholder dividends during the first half of Fiscal 2027.
- Completed the $1.1 billion remaining from the previously announced stock repurchase program during the second quarter of Fiscal 2027.
- Had approximately $2.7 billion available for repurchase as of August 1, 2026 under the new $3.0 billion authorization announced in February 2026.
What drove it
- Consolidated comparable sales increased 4%, above the company's plan.
- HomeGoods, TJX Canada, and TJX International delivered comparable sales increases of 6% to 7%.
- Gross profit margin expansion was driven by an increase in merchandise margin.
- The company received aggregate refunds of $331 million for a portion of IEEPA tariffs previously paid.
- The tariff refunds produced a net benefit of $219 million to second-quarter Fiscal 2027 pretax profit.
- The movement in foreign currency exchange rates had a one percentage point negative impact on second-quarter net sales growth versus the prior year and a $.01 positive impact on diluted earnings per share.
- The company increased store count by 23 stores to 5,285 and increased total square footage by 0.4% versus the prior quarter.
Concerns
- Marmaxx comparable sales increased +1%, and the company stated sales at Marmaxx were below expectations.
- SG&A costs as a percent of sales rose 0.8 percentage points to 20.3%, driven by incremental store wage and payroll costs.
- Adjusted SG&A costs as a percent of sales rose 0.2 percentage points to 19.7%.
- The amount, timing, and likelihood of additional tariff refund recovery remain uncertain; total refunds received may not equal the full amount of IEEPA-related tariffs paid and remain subject to legal, regulatory, or administrative developments.
- Second-quarter GAAP profitability included a 1.4 percentage point net benefit from tariff refunds, while GAAP diluted EPS included a $.14 net benefit.
What to watch
- Whether Marmaxx improvement at the start of the third quarter sustains after its +1% second-quarter comparable sales increase.
- Third-quarter consolidated comparable sales versus the planned up 2% to 3% range.
- Third-quarter adjusted pretax profit margin versus the planned 12.3% to 12.4% range.
- The scale and timing of additional IEEPA tariff refunds and related incremental compensation expense accruals.
- Execution of initiatives intended to drive sales and traffic during the fall and holiday shopping seasons.
- Progress toward planned 4% store opening growth beginning in Fiscal 2028 and the long-term 7,500-store target.
Balance sheet and cash flow
- Cash and cash equivalents were $6.0 billion at the end of the second quarter of Fiscal 2027.
- Cash and cash equivalents were $6,004 million as of August 1, 2026, compared with $4,639 million as of August 2, 2025.
- Merchandise inventories were $7,862 million as of August 1, 2026, compared with $7,372 million as of August 2, 2025.
- Current portion of long-term debt was $1,000 million as of August 1, 2026.
- Long-term debt was $1,871 million as of August 1, 2026, compared with $2,867 million as of August 2, 2025.
- First-half net cash provided by operating activities was $3,345 million, compared with $2,185 million.
- First-half net cash used in investing activities was $1,168 million, compared with $969 million.
- First-half net cash used in financing activities was $2,362 million, compared with $2,002 million.
- First-half net decrease in cash and cash equivalents was $226 million, compared with a net decrease of $696 million.
Analysis
TJX delivered an above-plan second quarter, with consolidated comparable sales up 4% and net sales up 5% to $15.2 billion. Performance was diversified across banners. HomeGoods posted a +7% comparable sales increase, while TJX Canada and TJX International each increased comparable sales by +6% and +7%, respectively. Marmaxx was the clear relative soft spot, with a +1% comparable sales increase and sales below the company's expectations, although management said the division improved at the start of the third quarter.
Reported profitability was unusually strong. GAAP gross profit margin increased 2.7 percentage points to 33.4%, GAAP pretax profit margin increased 1.9 percentage points to 13.3%, and GAAP diluted EPS increased 24% to $1.36. The results included a $331 million IEEPA tariff refund and $112 million of related incremental compensation expense accruals, for a net $219 million pretax-profit benefit. On the adjusted basis excluding this net benefit, gross margin was 31.4%, pretax profit margin was 11.9%, and diluted EPS was $1.22. The adjusted results still show margin progress, with adjusted gross margin up 0.7 percentage points, adjusted pretax margin up 0.5 percentage points, and adjusted EPS up 11%.
Merchandise margin was the stated source of gross-margin expansion, while costs remained a point of attention. GAAP SG&A as a percent of sales rose 0.8 percentage points to 20.3%, and adjusted SG&A rose 0.2 percentage points to 19.7%, driven by incremental store wage and payroll costs. Inventory was $7.9 billion, with consolidated inventories per store up 2% reported and up 3% on a constant currency basis. Management said the inventory position supports taking advantage of outstanding merchandise availability and maintaining fresh fall assortments.
Cash generation and distributions remained substantial. TJX generated $2.2 billion of second-quarter operating cash flow, ended with $6.0 billion of cash, and returned $1.3 billion to shareholders through $798 million of repurchases and $529 million of dividends. The company also added 23 stores during the quarter, reaching 5,285 stores, and plans to accelerate store opening growth to 4% starting in Fiscal 2028. It raised its long-term global store target by 500 stores to 7,500 stores.
The outlook retains a 3% to 4% full-year comparable-sales target but raises full-year pretax profit margin guidance to 12.3% to 12.4% and diluted EPS guidance to $5.31 to $5.36. Adjusted full-year guidance is 12.0% to 12.1% for pretax margin and $5.15 to $5.20 for diluted EPS, excluding expected tariff-refund benefits. For the third quarter, TJX plans comparable sales growth of 2% to 3%, adjusted pretax margin of 12.3% to 12.4%, and adjusted EPS of $1.30 to $1.32. The tariff-refund benefit remains material to reported results and forward guidance, and the company explicitly said the amount, timing, and likelihood of additional recoveries remain uncertain.
Management, verbatim
I am very pleased with our above-plan consolidated results in the second quarter. Overall comparable sales increased 4%, above our plan, and both profitability and earnings per share well exceeded our expectations.
Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc.
While sales at Marmaxx were below our expectations, HomeGoods, TJX Canada, and TJX International all delivered terrific comp sales increases of 6% to 7%, which underscores the strength of our global diversified business.
Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc.
Looking ahead, the third quarter is off to a strong start, and we are seeing improvement at our Marmaxx division to start the quarter.
Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc.
Not in the filing
stated, not guessed- Prior-quarter financial metrics for sequential comparisons
- Operating income
- Free cash flow
- Reported income tax rate
- Third-quarter and full-year revenue guidance
- Third-quarter and full-year gross-margin guidance
- Third-quarter and full-year operating-expense guidance
- Third-quarter and full-year tax-rate guidance
- Previous-quarter outlook for comparison with actual results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.