TJX tops expectations as it attracts "budget-conscious" customers
1min read TJX reported strong Q3 earnings, delivering adjusted EPS of $1.14, which exceeded analyst expectations of $1.09 and marked an 11% year-over-year increase. Net sales rose 6% to $14.06 billion, also beating the consensus estimate of $13.95 billion. This performance reflects the company’s ability to execute its off-price retail model effectively, even as economic pressures persist.
Comparable store sales increased by 3%, reaching the high end of TJX’s guidance, and were entirely driven by an increase in customer transactions. By division, TJX International (Europe and Australia) led the way with a 7% rise in comparable sales, while HomeGoods rose 3% and Marmaxx climbed 2%. Gross margins improved by 50 basis points to 31.6%, and pretax profit margin expanded 30 basis points year-over-year to 12.3%, showcasing strong operational efficiency.
The company raised its full-year FY25 EPS guidance to a range of $4.15 to $4.17, up from $4.09 to $4.13 previously. TJX maintained its forecast for comparable store sales growth at 3%. For Q4, it expects EPS to range between $1.12 and $1.14, with comparable sales growth of 2% to 3%. Management attributed the improved full-year outlook to cost savings, higher net interest income, and robust customer engagement across its stores.
Key drivers of TJX’s Q3 performance included its ability to attract budget-conscious shoppers with its "treasure hunt" shopping experience and value offerings. The company reported solid demand for discounted apparel, home goods, and other essentials, which resonated with consumers navigating tighter budgets. The increase in customer transactions underscores the appeal of its off-price model to a wide demographic.
In addition to strong financial performance, TJX is expanding its global footprint. The company announced plans to enter Spain with its TK Maxx banner in early 2026, a strategic move to tap into new markets. TJX also completed its investment in Brands For Less and finalized a joint venture with Grupo Axo, further enhancing its international growth opportunities.
Capital returns remained a priority, with TJX returning nearly $1 billion to shareholders in Q3 through share repurchases and dividends. Inventory levels rose slightly to $8.4 billion, but were down 2% on a per-store basis, positioning the company well to meet holiday demand. Management noted that the availability of goods in the marketplace would allow TJX to continue delivering an eclectic mix of value-driven products.
Looking ahead, TJX’s strong Q3 results and raised guidance set a positive tone for the holiday season. CEO Ernie Herrman expressed confidence in the company’s ability to capture consumer interest with its evolving assortment of gifts and competitive prices. While the retail landscape remains highly competitive, TJX’s focus on affordability and its global growth initiatives place it in a strong position to sustain momentum into 2025.
