TJX Companies, Inc. 10-Q Summary
Business Context and Reporting Period
This filing is a Quarterly Report on Form 10-Q for The TJX Companies, Inc. (TJX), the leading off-price apparel and home fashions retailer. The report covers the thirteen and twenty-six weeks ended August 1, 2026 (Fiscal 2027). TJX operates over 5,200 stores globally across four segments: Marmaxx (TJ Maxx, Marshalls, Sierra), HomeGoods, TJX Canada, and TJX International.
Key Financial Metrics
| Metric | 13 Weeks Ended Aug 1, 2026 | 26 Weeks Ended Aug 1, 2026 |
|---|---|---|
| Net Sales | $15.18 billion | $29.50 billion |
| Net Income | $1.52 billion | $2.85 billion |
| Diluted EPS | $1.36 | $2.55 |
| Pre-Tax Margin | 13.3% | 12.7% |
| Cost of Sales Ratio | 66.6% | 67.6% |
| Operating Cash Flow (26 wks) | $3.35 billion | |
| Cash and Equivalents | $6.00 billion (as of Aug 1, 2026) | |
| Long-Term Debt | $1.87 billion (excluding $1.00B current portion) |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 5% year-over-year (YoY) for the quarter and 7% for the six-month period. Comparable sales (comp sales) rose 4% for the quarter and 5% for the six months, driven by higher average baskets and increased customer transactions.
- Profitability Expansion: Pre-tax profit margin expanded to 13.3% from 11.4% YoY. This was primarily driven by a net benefit of $219 million from IEEPA tariff refunds and favorable merchandise margins due to higher markon.
- Expense Ratios: The cost of sales ratio improved to 66.6% (down 2.7 percentage points YoY). SG&A expenses increased to 20.3% of sales (up 0.8 percentage points) due to incremental compensation accruals related to tariff refunds and higher store wage costs.
- Segment Performance:
- HomeGoods: Strongest performer with 10% sales growth and segment profit margin jumping to 17.6% from 10.0%.
- Marmaxx: Sales up 3%; margin improved to 15.6%.
- TJX International: Sales up 11%; margin improved to 6.4%.
- TJX Canada: Sales up 6%; margin slightly decreased to 15.6% due to compensation accruals.
Guidance, Outlook, and Risks
- Capital Allocation: TJX returned $1.3 billion to shareholders in the quarter via dividends and share repurchases. The company plans to repurchase approximately $2.75 billion to $3.0 billion of stock for the full fiscal year 2027, with $2.7 billion remaining available as of August 1, 2026.
- Capital Expenditures: Full-year 2027 capex is expected to be between $2.2 billion and $2.3 billion, funded by cash on hand and operating cash flow.
- Store Growth: The long-term global store target has been increased to 7,500 stores. Store count and square footage increased approximately 3% YoY.
- Tariff Refunds: The company received $331 million in IEEPA tariff refunds in the quarter. While the Supreme Court invalidated these tariffs, the full amount of refunds remains subject to administrative processes and may not equal the total paid ($490 million).
- Risks: Key risks include global economic conditions, trade relations, tariff volatility, foreign currency fluctuations, and the ability to source merchandise to offset tariff impacts.
Investor Verification Checklist
- Tariff Refund Realization: Verify the timeline and certainty of receiving the remaining potential IEEPA tariff refunds beyond the $331 million already received.
- Compensation Accruals: Assess the sustainability of margins given the one-time nature of tariff refunds versus the recurring nature of the associated $112 million in incremental compensation accruals.
- Debt Maturity: Confirm the repayment strategy for the $1.0 billion 2.250% senior notes maturing in September 2026, which are currently classified as current liabilities.
- Foreign Currency Impact: Monitor the impact of currency translation on international segments (Canada and International), which saw mixed results due to exchange rate fluctuations.
- Inventory Levels: Review the 2% increase in average per-store inventory to ensure it aligns with sales velocity and does not lead to future markdown pressure.