TJX Companies Q4 Earnings Call Highlights

Key Points

• Q4 beat expectations: Net sales were $17.7 billion (+9% y/y) with comps +5%, adjusted diluted EPS $1.43 (+16%), and improved margins (adjusted gross 31.1%, adjusted pre-tax 12.2%).
• Full-year milestone and operating gains: Fiscal 2026 net sales topped $60.4 billion with comps +5% and adjusted EPS $4.73, driven by shrink returning to pre-COVID levels and broad-based strength across banners.
• Fiscal 2027 guidance and capital plan: Management expects comps +2–3% and sales ~$62.7–63.3 billion with EPS $4.93–5.02, plans $2.2–2.3 billion in capex for ~146 net new stores, a 13% dividend increase to $0.48/quarter, and $2.5–2.75 billion in buybacks while monitoring tariff risk.

TJX Companies NYSE: TJX reported fourth-quarter fiscal 2026 results that management said were “well above” expectations, citing broad-based comparable sales growth, improved margins, and continued customer traffic gains across most banners. Executives also outlined fiscal 2027 guidance calling for steady comp growth, continued merchandise margin improvement, and ongoing investment in new stores and remodels, while noting they are monitoring a shifting tariff environment.

Q4 results topped internal expectations

CEO Ernie Herrman said the company delivered an “excellent” quarter, with sales, profitability, and earnings per share above plan. On an adjusted basis (excluding the net impact of a litigation settlement related to credit card interchange fees and associated expenses), CFO John described Q4 performance as follows:

• Net sales: $17.7 billion, up 9% year over year
• Comparable sales: up 5%, on top of a 5% comp in the prior-year quarter
• Adjusted pre-tax profit margin: 12.2%, up 60 basis points from 11.6%
• Adjusted gross margin: 31.1%, up 60 basis points from 30.5%
• Adjusted SG&A: 19.1% of sales versus 19.2% last year
• Adjusted diluted EPS: $1.43, up 16% from $1.23

John said results benefited primarily from lower shrink and expense leverage on above-plan sales, partially offset by higher incentive compensation accruals. He also noted that comp sales were trending higher before winter storms in North America late in the quarter, with sales picking up again after the storms passed.

Traffic and basket trends, pricing, and customer response

Management said the Q4 comp was driven by both a higher average basket and an increase in customer transactions. John added that transactions were up across divisions in the quarter, with the exception of HomeGoods, where transactions were “essentially flat” in Q4; he said HomeGoods transactions had been running up prior to the late-quarter storms.

On pricing actions and higher ticket prices, Herrman said changes have been selective and tied to maintaining a value gap versus competitors. He also pointed to mix as a factor, citing more “better goods” at higher prices at Marmaxx in Q4. Herrman said the company has not seen negative customer reaction and that customer surveys indicated value perception “actually improved over the last six months.” Executives also said Q4 performance was balanced across income demographics, noting similar comps above and below $100,000 income in the U.S.

Full-year performance: sales surpass $60 billion milestone

For the full year, TJX reported net sales of $60.4 billion on an adjusted basis, up 7% year over year, with comps up 5%. Herrman highlighted surpassing $60 billion in annual sales as a milestone and said the company believes it attracted new shoppers in every country where it operates.

John said full-year adjusted profitability also improved:

• Adjusted pre-tax profit margin: 11.7% versus 11.5% last year
• Adjusted gross margin: 31.0% versus 30.6% last year, including a 20-basis-point benefit from shrink favorability
• Adjusted SG&A: 19.5% versus 19.4% last year
• Adjusted diluted EPS: $4.73 versus $4.26 last year

Executives emphasized shrink improvement, with John saying shrink is “essentially back” to pre-COVID levels after two consecutive years of 20-basis-point improvements. He said the company is not “taking the foot off the gas” on shrink, but suggested future gains may be smaller now that performance has returned near prior levels.

Inventory rose 14% on the balance sheet, with inventory per store up 10%, but management said it feels “great” about inventory levels given “excellent availability” in the marketplace.

Divisional highlights: HomeGoods tops $10 billion and international expansion continues

Herrman said every division posted comp sales growth of 4% or better for the year and attracted new shoppers. He provided the following divisional updates:

• Marmaxx: Full-year sales of $36.6 billion; comp sales up 4% with strength in apparel and home; adjusted segment profit margin of 14.4%.
• HomeGoods: Annual sales surpassed $10 billion; comps up 5%; 27 stores opened; adjusted segment profit margin of 12%. Executives said HomeGoods benefited from sales leverage, merchandise margin improvement, freight favorability, shrink, and operational efficiencies.
• TJX Canada: Sales of $5.6 billion; comps up 7%; constant-currency adjusted segment profit margin of 13.8%.
• TJX International: Sales of $8.0 billion; comps up 4% with strength in Europe and Australia; constant-currency adjusted segment profit margin improved to 7.3%. Herrman said the company expects to open its first stores in Spain in the spring.

Herrman also discussed the company’s joint venture in Mexico and minority investment in the Middle East, saying the Mexico business has made progress in merchandising and Brands For Less stores in the Middle East continue to perform well with plans for additional store openings.

Fiscal 2027 outlook: steady comps, store growth, and shareholder returns

Looking ahead, John guided to fiscal 2027 comp sales growth of 2% to 3% and sales of $62.7 billion to $63.3 billion, up 4% to 5%. The company expects pre-tax profit margin of 11.7% to 11.8% and gross margin of 31.1% to 31.2%, driven by an expected increase in merchandise margin. Full-year diluted EPS is projected at $4.93 to $5.02.

Management said it is evaluating the potential impact of a recent ruling on tariffs and monitoring the changing tariff environment, but the company’s full-year guidance assumes it will be able to offset tariff pressure.

For Q1, TJX expects comps up 2% to 3%, sales of $13.8 billion to $13.9 billion, and diluted EPS of $0.97 to $0.99. The company forecast Q1 gross margin improvement driven by favorable inventory hedge comparisons and higher merchandise margin, while SG&A is expected to be higher as a percent of sales due primarily to incremental store wage and payroll costs.

On capital allocation, John said TJX plans capital expenditures of $2.2 billion to $2.3 billion and expects to add 146 net new stores in fiscal 2027, with about 540 remodels and approximately 40 relocations. He also said the company expects its board to increase the quarterly dividend by 13% to $0.48 per share and plans to repurchase $2.5 billion to $2.75 billion of stock in fiscal 2027.

About TJX Companies NYSE: TJX

TJX Companies, Inc is a leading off-price retailer of apparel, footwear, home fashions and other consumer goods. The company operates multiple retail concepts that offer discounted brand-name and designer merchandise, including well-known banners such as T.J. Maxx and Marshalls in the United States, HomeGoods for home furnishings, TK Maxx in parts of Europe, and Winners and Homesense in Canada. Merchandise categories span women's, men's and children's apparel, accessories, beauty, home décor, kitchenware and small furniture, with frequent changes in assortment that create a “treasure-hunt” shopping experience for consumers.

The company's business model centers on opportunistic buying, purchasing excess, irregular or out-of-season inventory from manufacturers, department stores and other suppliers, and passing savings to customers through lower prices.

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