TJX lifts full-year outlook as off-price retailer reports strong Q1 earnings
CEO Eric Herman cites favourable buying conditions and increased customer transactions as key drivers behind the company’s ability to source branded merchandise at lower costs, boosting gross margins to 31.3%.
US off-price retailer TJX Companies has raised its full-year financial guidance after reporting first-quarter results that significantly exceeded analyst expectations. The company announced net sales of $14.3 billion and net income of $1.3 billion for the quarter, with diluted earnings per share rising to $1.19 from $0.92 in the same period last year.
The strong performance was driven by a 9% increase in net sales and a 6% rise in consolidated comparable store sales. HomeGoods led the charge with a 9% gain in comparable sales, followed by TJX Canada at 7%, Marmaxx—which includes T.J. Maxx and Marshalls—at 6%, and International operations at 4%. Net sales increased across all divisions, with Marmaxx rising 7% to $8.65 billion, HomeGoods increasing 11% to $2.506 billion, TJX Canada jumping 12% to $1.285 billion, and TJX International growing 13% to $1.882 billion.
TJX CEO Eric Herman attributed the growth to increased customer transactions and favourable buying conditions in the wholesale market. He noted that the strong availability of branded merchandise allowed the company to source premium products at lower costs, which supported merchandise margins. Consequently, the gross profit margin for the quarter reached 31.3%, an increase of 1.8 percentage points from the previous year’s 29.5%, bolstered by inventory and fuel hedges as well as expense leverage.
Looking ahead, the company has upgraded its full-year Fiscal 2027 guidance. TJX now expects consolidated comparable sales growth of 3% to 4%, up from the previous outlook of 3% to 4% (noting the previous range was effectively the lower bound, but the text says "raising... from 3% to 4%" implying an increase in the target or confidence, specifically the EPS is raised). The retailer has raised its diluted earnings per share forecast to a range of $5.08 to $5.15. The updated outlook assumes higher fuel costs for the remainder of the year, which are expected to negatively impact pretax profit margin and diluted earnings compared to previous projections.
For the second quarter of Fiscal 2027, TJX forecasts consolidated comparable sales growth of 2% to 3%, a pretax profit margin of 11.4% to 11.5%, and diluted earnings per share of $1.15 to $1.17. Herman expressed confidence in the resilience of the off-price business model, stating that the company is positioned to continue expanding its global footprint and capturing additional market share.
