TJX Stock Surges: Earnings Beat Overshadows Soft Guidance

TJX Companies, the leading off-price retailer in the U.S. and worldwide, reported a better-than-expected holiday quarter driven entirely by customer transactions. The discounter behind T.J. Maxx, Marshall's, and Home Goods beat Wall Street's expectations on the top and bottom lines, but it gave cautious guidance for the current fiscal year and current quarter. For its fiscal 2026, TJX is planning for comparable sales to rise between 2% and 3%, below Wall Street expectations of up 3.4%, according to StreetAccount. Its fiscal 2026 earnings guidance of between $4.34 and $4.43 per share is well below estimates of $4.59 per share, according to LSEG, and its forecast for its current quarter also looks weaker than expected.



TJX is expecting comparable sales to climb between 2% and 3%, behind StreetAccount estimates of 3.4%, and it's expecting earnings per share to be between 87 and 89 cents. Analysts were looking for 99 cents per share, according to LSEG. A strong U.S. dollar and unfavorable exchange rates are expected to weigh on earnings growth by 3% in fiscal 2026, the company said in a news release.

Here's how TJX did in its fiscal 2025 fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

* Earnings per share: $1.23 vs. $1.16 expected
* Revenue: $16.35 billion vs. $16.20 billion expected

The company's reported net income for the three-month period that ended Feb. 1 was $1.40 billion, or $1.23 per share, roughly flat compared with $1.40 billion a year earlier, or $1.22 per share, a year earlier. Sales were basically unchanged at $16.35 billion, compared to $16.41 billion a year earlier. In the year-ago period, TJX benefited from an extra selling week that it didn't have in fiscal 2025.

TJX's off-price retail strategy has been a significant contributor to its consistent earnings growth. The company leverages its extensive vendor relationships to offer brand-name merchandise at significant discounts, attracting price-conscious consumers. This strategy has allowed TJX to take market share from department stores and other discounters, as seen in its better-than-expected holiday quarter driven entirely by customer transactions.

TJX's ability to deliver compelling values on good, better, and best brands, along with an exciting treasure-hunt shopping experience, has driven consistent comparable store sales growth across its divisions. In 2024, each of its divisions saw strong, consistent full-year comp store sales growth of 4% or above. To sustain this strategy in the long term, TJX will need to continue focusing on the off-price fundamentals of its business, such as offering a wide range of customers compelling values and an exciting shopping experience. Additionally, the company's ability to expand internationally, as seen with its plans to enter Spain early next year, can provide new growth opportunities and help maintain its earnings growth trajectory.

In conclusion, while TJX's earnings beat trumped soft guidance, investors should be cautious about the company's outlook for the current fiscal year and current quarter. Despite the strong U.S. dollar and unfavorable exchange rates expected to weigh on earnings growth, TJX's off-price retail strategy and international expansion plans position the company for long-term success. As always, it's essential to stay informed and monitor the company's performance closely.