TJX Companies Posts Q2 Beat But Marmaxx Lags; Q3 Guidance Falls Short

Shares of TJX Companies Inc (NYSE:TJX) tanked in early trading on Thursday, after the company reported its second-quarter results.

While the company reported better-than-guided results, the beat was driven by HomeGoods and International. The core Marmaxx division lagged, and management’s third-quarter guidance fell short of expectations.

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The Q2 Results: Analyst Simeon Siegel of Guggenheim Securities highlighted the following from the TJX report:

• Sales grew 5.4% year-on-year to $15.180 billion, exceeding Street expectations of $15.164 billion.
• Consolidated comp of 4% came above consensus of 3.3%.
• Comps of Marmaxx improved by 1%, HomeGoods by 7%, Canada by 6% and International by 7%.
• Gross margins, ex-tariff refunds, of 31.4% beat Street expectations of 31.0%.
• Earnings of $1.22 per share came in higher than consensus of $1.19 per share.

Although Marmaxx underperformed, management indicated that the division was "off to a good start" in Q3.

While the company repurchased around 5.1 million shares in the second quarter for a total of $798 million, at an average price of around $156 per share, management reiterated the fiscal 2027 repurchase outlook of $2.75-$3.0 billion, exceeding last year’s $2.50 billion, the analyst noted.

Guidance: As usual, TJX Companies announced its outlook below expectations, Siegel said. For the third quarter, the company guided to:

• Consolidated comp of 2%-3%, versus consensus of 3.1%
• Pretax margin of 12.3%-12.4% ex-tariff refunds
• Earnings of $1.30-$1.32 per share, ex-tariff refunds, versus Street expectations of $1.35 per share.

Management raised its store growth outlook, now expecting the company’s overall global store base to reach 7,500 in existing banners/current countries, up from its prior target of 7,000, the analyst stated.

"We continue to see TJX as a long-term share compounder, as the company has become increasingly important to its vendors, representing a crucial element within the retail ecosystem, further evidenced by today’s LT store target raise," he further wrote.

TJX Price Action: Shares of TJX Companies had declined by 2.33% to $141.21 at the time of publication on Thursday.

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