TJX Companies, the parent company of T.J. Maxx, Marshalls, and HomeGoods, announced a promising beginning to the holiday shopping season, yet its stock took a hit following guidance that fell short of Wall Street expectations.
In its fiscal third-quarter results, TJX exceeded analysts’ predictions, reporting earnings per share of $1.14, surpassing the anticipated $1.09. The company also posted revenue of $14.06 billion, slightly above the expected $13.95 billion. For the quarter ending November 2, TJX’s net income rose to $1.30 billion, compared to $1.19 billion during the same period last year.
Despite this strong performance, the company provided a holiday quarter earnings forecast of $1.12 to $1.14 per share, which was below the consensus estimate of $1.18. CEO Ernie Herrman noted that customer transactions were a driving force behind comparable sales growth, indicating that the company’s value offerings and unique shopping experience continue to attract a diverse customer base.
“The fourth quarter is off to a strong start, and we are excited about our opportunities for the holiday selling season,” Herrman stated. “In stores and online, we are offering consumers an ever-changing and inspiring shopping destination for gifts at excellent values, and we feel confident that there will be something for everyone when they shop with us.”
For the holiday quarter, TJX anticipates comparable sales growth of 2% to 3%, aligning closely with the 3% increase projected by analysts. The company reaffirmed its full-year comparable sales growth estimate of 3%, just shy of the 3.2% growth expected by market analysts. Additionally, TJX raised its pretax profit margin outlook from 11.2% to 11.3%, consistent with analyst expectations, and adjusted its earnings per share guidance for the full year to a range of $4.15 to $4.17, improving from its previous forecast of $4.09 to $4.13.
Despite a year of robust growth, TJX is experiencing a slowdown in sales as it faces tougher year-over-year comparisons. The off-price retailer is successfully appealing to value-conscious consumers, particularly those moving away from traditional department stores like Macy’s and Kohl’s, and is making inroads with younger shoppers who view off-price shopping favorably.
During the latest quarter, comparable sales in TJX’s Marmaxx division, which includes T.J. Maxx, Marshalls, and Sierra stores, increased by 2%, a decline from the 7% growth seen in the same quarter last year. Comparable sales at HomeGoods rose by 3%, down from 9% a year ago, while TJX Canada experienced a 2% increase compared to 3% last year. Notably, TJX International, which encompasses operations in Europe and Australia, outperformed with a 7% growth in comparable sales, a significant improvement from just 1% the previous year.
In a strategic move to expand its global footprint, TJX announced it recently acquired a 35% stake in the Dubai-based retailer Brands for Less for $360 million, enhancing its presence in the Middle East, where the brand operates over 100 stores and an e-commerce platform primarily in the UAE and Saudi Arabia. Furthermore, the company revealed plans to enter the Spanish market with its TK Maxx brand in early 2026.
Analysts had expressed concerns that unseasonably warm weather in October might negatively impact sales for off-price retailers like TJX, which typically rely on seasonal purchases. However, the company reported that the warmer weather did not significantly affect its sales performance, indicating resilience in its customer base.
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