TJX Companies: Can Expansion and Execution Justify a "Buy" Despite EPS Guidance Concerns?

The TJX Companies (TJX) is set to release its Q2 2026 earnings on August 20, 2025, a report that will test whether its recent retail expansion and consistent revenue outperformance can offset concerns over tempered EPS guidance. For investors, the question is whether the company's long-term growth strategy—driven by international expansion, e-commerce, and operational efficiency—justifies a "buy" rating despite near-term headwinds.

A Track Record of Outperformance

TJX has consistently exceeded expectations in recent quarters. Its Q1 2026 results, for instance, delivered an EPS of $0.92, surpassing the $0.90 consensus, while revenue hit $13.11 billion, beating forecasts by $100 million. Over the past four quarters, the company has outperformed EPS estimates in all periods, with an average beat of 2.22%. This resilience is underpinned by its off-price retail model, which thrives on value-conscious consumers and a treasure-hunt shopping experience.

The company's ability to outperform is further supported by its global expansion. As of Q1 2026, TJX operates 5,085 stores worldwide, with plans to open 130 new locations in the next 12 months. These include 40 U.S. Marmaxx/Marshalls stores, 30 HomeGoods outlets, and 22 international locations in Europe and Australia. The expansion into Spain via its TK Maxx banner, with first stores opening in early 2026, adds another layer of growth potential.

E-commerce and International Momentum

TJX's e-commerce strategy is equally compelling. The company has invested heavily in digital platforms, including tjmaxx.com and tkmaxx.com, to capture the shift toward online shopping. In 2025, e-commerce sales grew by double digits, driven by enhanced user experiences and exclusive online offerings. This digital push complements its physical footprint, creating a seamless omnichannel model that broadens its customer base.

Internationally, TJX's expansion is accelerating. The company's joint venture with Grupo Axo in Mexico and its minority stake in Brands for Less in the Middle East signal a strategic focus on high-growth markets. These moves are supported by TJX's global sourcing network, which spans 100 countries and ensures a steady flow of discounted branded goods.

Navigating EPS Guidance Concerns

Despite these positives, recent EPS guidance has raised eyebrows. For Q2 2026, TJX provided a range of $0.97–$1.00, slightly below the $1.01 analyst consensus. The company cited challenges such as U.S. tariffs on Chinese imports and unfavorable foreign exchange rates, which are expected to reduce margins by 0.2 percentage points and earnings growth by 3%.

However, these concerns must be weighed against TJX's historical ability to adapt. In Q1 2026, the company offset rising costs through inventory shrink reduction (0.2 percentage point margin improvement) and disciplined expense management. Its $5.3 billion in cash reserves and $6.1 billion in operating cash flow provide further flexibility to navigate short-term pressures.

Analyst Consensus and Investor Sentiment

Analysts remain overwhelmingly bullish. All 18 recent ratings are "Buy" or "Strong Buy," with an average price target of $144.24 (8.76% upside from the current $132.90). UBS's $164 target, for instance, reflects confidence in TJX's long-term value proposition. The Zacks Earnings ESP model also suggests a positive surprise, with a +1.49% bias toward beating estimates.

The Case for a "Buy" Rating

While near-term EPS guidance is cautious, TJX's fundamentals remain robust. Its expansion into high-growth markets, e-commerce momentum, and operational efficiency create a durable competitive advantage. The company's ability to consistently outperform revenue and EPS estimates—despite macroeconomic headwinds—demonstrates its agility.

For investors, the key is to focus on the long-term. TJX's international expansion and off-price model position it to capitalize on global retail shifts, including the decline of traditional department stores and the rise of value-driven shopping. Shareholder returns, including a $2.5 billion buyback program, further enhance appeal.

Conclusion

TJX's upcoming earnings report will be a critical test of its ability to balance growth and profitability. While EPS guidance is tempered by tariffs and FX pressures, the company's execution, expansion, and analyst optimism suggest a "buy" rating is justified. Investors who prioritize long-term value over short-term volatility may find TJX's combination of resilience and strategic momentum compelling.