TJX Companies (NYSE:TJX) reported first-quarter fiscal 2027 results that topped its internal expectations, driven by broad comparable sales gains, higher customer transactions and improved margins, executives said on the company’s earnings call.
Chief Executive Officer and President Ernie Herrman said he was “extremely pleased” with the off-price retailer’s quarter, noting that sales, profitability and earnings per share were all “well above” the company’s plans. Consolidated comparable sales rose 6%, with each division posting growth and increases in customer transactions.
“Our global teams work together as one TJX to offer customers across a wide demographic excellent values and an exciting treasure hunt shopping experience every day,” Herrman said. He added that the second quarter was “off to a good start” and that merchandise availability remained “outstanding.”
First-quarter sales and earnings top plan
Senior Executive Vice President and Chief Financial Officer John Klinger said the 6% consolidated comp sales increase was driven equally by a higher average basket and more customer transactions. The company saw very strong comp gains in both apparel and home categories.
Pre-tax profit margin was 12%, up 170 basis points from a year earlier. Gross margin rose 180 basis points to 31.3%, which Klinger attributed primarily to higher merchandise margin, favorable inventory and fuel hedges, and expense leverage from stronger sales. SG&A was 19.5%, unfavorable by 10 basis points.
Diluted earnings per share were $1.19, up 29% from the prior year and well above plan. Klinger said the earnings upside was due mainly to expense leverage on above-plan sales, favorable fuel hedges and stronger-than-expected merchandise margin.
All divisions post comparable sales gains
TJX reported strong performance across its operating divisions:
- Marmaxx: Comparable sales rose 6%, while segment profit margin increased 100 basis points to 14.7%. Klinger said both apparel and home categories were strong, with broad comp strength across regions and income demographics. Sierra stores and U.S. e-commerce sites, which are reported within Marmaxx, also posted a very strong comp increase.
- HomeGoods: Comparable sales increased 9%, and segment profit margin rose 270 basis points to 12.9%. Klinger said HomeGoods saw strong comp gains across regions and income demographics.
- TJX Canada: Comparable sales increased 7%. Segment profit margin on a constant-currency basis rose 100 basis points to 11% across the company’s three Canadian banners.
- TJX International: Comparable sales rose 4%, with growth in Europe and a strong increase in Australia. Segment profit margin on a constant-currency basis improved 40 basis points to 4.7%.
During the quarter, TJX opened its first store in Spain. Klinger said customer response was “terrific,” while Herrman said the company remains excited about growth plans in the country.
Company raises full-year outlook
Following the stronger-than-expected quarter, TJX raised its full-year outlook for sales and profitability. Klinger said the company now expects full-year comparable sales growth of 3% to 4% and consolidated sales of $63.2 billion to $63.7 billion, up 5% to 6% from last year.
The company expects full-year pre-tax profit margin of 11.9% to 12%, up 20 to 30 basis points from last year’s adjusted 11.7%. Gross margin is expected to be 31.2% to 31.3%, also up 20 to 30 basis points from last year’s adjusted level. Full-year SG&A is expected to be 19.5%, flat with last year’s adjusted figure.
TJX now expects full-year diluted earnings per share of $5.08 to $5.15, representing a 7% to 9% increase from last year’s adjusted $4.73.
For the second quarter, TJX projected comparable sales growth of 2% to 3%, consolidated sales of $15 billion to $15.1 billion and diluted EPS of $1.15 to $1.17.
Klinger said the company did not flow the entire first-quarter earnings beat into the full-year outlook because it is assuming current fuel prices remain in place for the rest of the year. “Of course, if fuel prices come down from their current levels, we would expect to see favorability to our full-year profitability plan,” he said.
Merchandise availability and marketing remain priorities
Herrman said TJX is focused on gaining market share through marketing, product value, store investments and global store growth. He said many banners are launching new campaigns and partnerships aimed at reinforcing the company’s value positioning, with marketing focused across a broad demographic, including younger shoppers, and with a strong emphasis on digital media.
He highlighted TJX’s more than 1,400 buyers and said merchandise availability is “off the charts.” Herrman said the company typically adds thousands of new vendors each year and works to be the “first call” for vendors with excess goods.
In response to analyst questions, Herrman said the company has not seen a change in customer behavior tied to macroeconomic factors. Klinger added that, at Marmaxx, there was no correlation between ticket movement by department and comp performance.
Herrman also said TJX continues to attract a disproportionate number of new Gen Z and millennial shoppers across its brands. He described the customer base by income as balanced, while noting that it skews somewhat higher than the general population.
Capital returns and expansion opportunities
Klinger said first-quarter balance sheet inventory was up 8%, while inventory per store rose 7%. He said the company feels good about its inventory levels and merchandise availability.
TJX returned $1.1 billion to shareholders through buybacks and dividends in the first quarter. The company also increased its fiscal 2027 share repurchase guidance to a range of $2.75 billion to $3 billion, which Klinger said would allow TJX to buy more opportunistically at favorable stock price levels.
Herrman said TJX now operates stores in 10 countries and sees the potential to add more than 1,700 stores in those countries with existing banners. He also discussed the company’s joint venture with Axo in Mexico and its investment in Brands For Less in the Middle East, saying TJX remains optimistic about long-term opportunities despite the current geopolitical environment.
“We are convinced that our strategies to play offense and the characteristics of our business set us up very well to capitalize on the market share and growth opportunities that we see for many years to come,” Herrman said.
About TJX Companies (NYSE:TJX)
TJX Companies, Inc is a leading off-price retailer of apparel, footwear, home fashions and other consumer goods. The company operates multiple retail concepts that offer discounted brand-name and designer merchandise, including well-known banners such as T.J. Maxx and Marshalls in the United States, HomeGoods for home furnishings, TK Maxx in parts of Europe, and Winners and Homesense in Canada. Merchandise categories span women's, men's and children's apparel, accessories, beauty, home décor, kitchenware and small furniture, with frequent changes in assortment that create a “treasure-hunt” shopping experience for consumers.
The company's business model centers on opportunistic buying, purchasing excess, irregular or out-of-season inventory from manufacturers, department stores and other suppliers, and passing savings to customers through lower prices.
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