TJX Posts 7% Revenue Gain in Fiscal Q2

Key Points

• Revenue reached $14.4 billion in the second quarter of fiscal 2026, up 7%, beating the $14.14 billion GAAP estimate.

• Diluted earnings per share (GAAP) were $1.10, up 15% year over year. and above the $1.01 GAAP expectation.

• Comparable sales grew 4% company-wide, with notable strength in Canada and international markets.

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TJX Companies (NYSE:TJX), operator of off-price retail stores worldwide, reported its results for the second quarter of fiscal 2026 on August 20, 2025. The standout story was an across-the-board beat on GAAP revenue and GAAP earnings versus analyst expectations, driven by healthy sales across its global store base, improved GAAP profit margins, and solid expense management. Revenue for the period was $14.4 billion, above the consensus GAAP estimate of $14.14 billion. Diluted earnings per share were $1.10, up 15% versus $0.96 in the second quarter of Fiscal 2025 and handily ahead of the $1.01 GAAP analyst forecast. Comparable sales climbed 4%, marking another quarter of broad-based growth. Overall, the quarter showed continued momentum despite ongoing tariff and inventory pressures.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report.

Business Overview and Strategic Focus

TJX Companies is the parent company of retail banners such as TJ Maxx, Marshalls, HomeGoods, and Homesense in the United States, as well as similar concepts in Canada, Europe, and Australia. Its core business model is off-price retailing—offering brand-name and designer merchandise at prices well below those at traditional department stores.

The company’s success relies on five pillars: its opportunistic buying strategy, a flexible store model, global scale, an engaging treasure-hunt shopping experience, and keeping operational costs low. These factors support its ability to adapt quickly to consumer trends, attract price-conscious shoppers, and expand store count globally. Success depends heavily on sourcing merchandise at a discount, rotating assortments, and offering a customer experience focused on surprise and value.

Quarter Highlights: Results and Key Developments

During the quarter, TJX Companies posted a 7% rise in GAAP revenue compared to the prior year. All four main regions—Marmaxx, HomeGoods, TJX Canada, and TJX International—delivered higher net sales and comparable sales. Notably, TJX Canada and the company’s international segment recorded the strongest growth, with net sales up 11% and 13%, respectively, and comparable sales up 9% and 5%.

In the United States, the Marmaxx segment (including TJ Maxx, Marshalls, and Sierra off-price apparel retailers) reported a 5% revenue increase. HomeGoods, its home category business, saw sales rise 9% (GAAP). HomeGoods segment profit increased 19% in the second quarter compared to the prior year, bucking broader industry sluggishness in the home sector, with expanded store presence.

Pretax profit margin improved to 11.4% (GAAP), up half a percentage point from last year. This improvement came from a combination of lower selling, general, and administrative expenses—helped by efficient operations and the timing of certain costs—and gross profit margin benefits from favorable currency hedges. The gross profit margin (GAAP) increased to 30.7%, even as merchandise margin remained steady in the face of higher tariffs.

Inventory increased 14% at quarter-end, rising to $7.4 billion overall and up 10% per store versus last year. Management described this as an intentional move, taking advantage of widespread “excellent buying opportunities” in the marketplace. The goal is to maintain a steady flow of new merchandise into stores for upcoming fall and holiday shopping seasons. The company operated 5,134 stores globally at period end, up by 13 locations from the previous quarter, with a 0.3% increase in total store square footage.

One notable event was the strong pace of capital returned to shareholders. TJX Companies repurchased 4.1 million shares for $515 million, and paid $474 million in dividends, bringing cash returned year-to-date to about $2.0 billion for the first half of FY2026. The operating cash flow totaled $1.8 billion.

The company maintained its quarterly dividend and buyback program, continuing a trend of annual dividend growth.

Looking Ahead: Management Guidance and Investor Focus

Following the period’s outperformance, management raised its full-year FY2026 outlook. The company now expects company-wide comparable sales growth of about 3% for FY2026, with pretax profit margin targeted at 11.4% to 11.5% for FY2026. Full-year diluted earnings per share (GAAP) are projected at $4.52 to $4.57 for FY2026, an increase from the previous guidance range. For the third quarter, management is guiding for comparable sales growth of 2% to 3%, and diluted earnings per share between $1.17 and $1.19.

The updated outlook assumes the tariff environment remains unchanged and that the company can continue offsetting tariff impacts with sourcing and operational efficiencies. Key factors for investors to watch in coming periods include inventory levels, the pace of new store openings, trends in buying opportunities, and the company’s ability to continue controlling costs as store count rises worldwide. Management highlighted that foreign exchange lifted sales by one percentage point, and earnings per share by $0.02 in the quarter, but expects only a small negative impact from currency translation for the rest of FY2026.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends TJX Companies. The Motley Fool has a disclosure policy.