TJX Companies Apple Inc. raised its full-year outlook on Wednesday after posting another quarter of strong sales, but its forecast remains slightly below Wall Street expectations.
The company behind Marshalls, HomeGoods and TJ Maxx now expects full-year earnings of between $4.09 and $4.13, compared with estimates of $4.14, according to LSEG.
For the current quarter, TJX expects earnings per share to be in the range of $1.06 to $1.08, compared to estimates of $1.10.
So far this earnings season, retailers that have missed guidance haven’t seen a major negative impact on their stocks, suggesting investors are bracing for uncertainty in the second half of the year ahead of the U.S. presidential election and a potential interest rate cut by the Federal Reserve. TJX shares were up about 4% in premarket trading.
Here's how the company performed compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG:
Earnings per share: 96 cents vs. 92 cents expectedRevenue: $13.47 billion vs. $13.31 billion expected
The company reported net income for the three-month period ended Aug. 3 of $1.1 billion, or 96 cents per share, compared with $989 million, or 85 cents per share, a year earlier.
Sales rose to $13.47 billion, compared to $12.76 billion the previous year.
Over the course of TJX's fiscal 2024, which ended in February, the company posted strong sales gains and strong guidance, but investors were keen to see how it would beat those numbers in the coming quarters and whether it could continue to grow.
The company is looking abroad as a key growth avenue, announcing Wednesday that it had acquired a 35% stake in Dubai-based retailer Brands for Less for $360 million. The privately held brand is the region’s only major discount retailer, operating more than 100 stores, primarily in the UAE and Saudi Arabia, alongside an e-commerce business, TJX said in a press release.
“As TJX seeks to continue its global growth, this transaction provides the company with an opportunity to invest in a well-established, discount retailer with significant growth potential,” TJX said. “The company’s ownership in BFL is expected to result in a modest increase in earnings per share beginning in fiscal 2026.”
During the quarter, comparable-store sales rose 4% and were “driven entirely by increased customer transactions,” indicating that more shoppers were coming into its stores, TJX said. That jump was ahead of the 2.8% gain analysts had expected, according to StreetAccount.
Growth was driven primarily by TJX’s U.S. Marmaxx division, which includes TJ Maxx, Marshalls and Sierra stores. During the quarter, Marmaxx comparable sales rose 5%, compared with estimates of 2.9%, according to StreetAccount. HomeGoods reported comparable sales of 2% — below the 3% analysts were expecting, according to StreetAccount — as the overall home furnishings market remains stagnant.
“The performance in the current quarter is already off to a strong start,” said CEO Ernie Herman.
“We see excellent buying opportunities in the market and are well positioned to ship fresh, attractive merchandise to our stores and online throughout the fall and holiday sales seasons. We achieved a significant milestone for our company in the second quarter by opening our 5,000th store,” said Herman. “Longer term, we are excited about our potential to capture additional market share across all of our geographies and continue our global growth.”
By Tuesday’s close, TJX stock was up about 21% year-to-date. Shares hit a new high in May after the company reported strong quarterly earnings.
The retailer has captured market share from competitors such as goal and Maisie It has become a haven for price-sensitive consumers who may be watching their dollars but still want to buy new clothes.
In May, Herman said the company was winning in part because it had “become a more cool place to shop” and made inroads with younger Gen Z customers, who tend to care more about getting good, high-quality deals than shopping for high-end names.
Some analysts say the nature of TJX’s business model means it performs well in any economic environment. In good times, low- and middle-income consumers have extra money to buy discretionary items like new clothes, shoes and home decor, and in bad times, higher-income shoppers come to its stores looking for deals on branded clothing they’re used to.
However, the sharp decline in consumer spending, which some analysts have warned could be coming, could weigh on the company regardless of the value it offers.
