Discount retailer TJX (TJX.US) Q2 sales and profit exceeded expectations but accelerated expansion plans raised concerns

The Zhitong Finance App learned that US discount clothing and household goods retailer TJX (TJX.US) announced financial results for the second quarter of fiscal year 2027 on Wednesday. Many core indicators exceeded market expectations, but its plans to speed up the opening of new stores made investors uneasy.

According to the data, TJX's net sales for the second fiscal quarter ended August 1 were US$15.2 billion, up 5% year on year; same-store sales increased 4%, and adjusted earnings per share increased 11% year on year to 1.22 US dollars. The above indicators were better than market expectations.

In the first half of fiscal year 2027, the company's net sales reached US$29.5 billion, up 7% year on year; same-store sales increased 5%. Net profit for the first half of the year was US$2.9 billion. Excluding net income of $0.14 from tariff rebates, adjusted earnings per share were US$2.41, an increase of 19% over the same period last year.

In the fiscal quarter ending August 1, the total number of company stores increased by 23 to 5,285, and the total construction area increased by 0.4% over the previous quarter.

Ernie Herrman, CEO of TJX, said in the earnings report: “I am very satisfied with the overall results that exceeded expectations in the second quarter. Overall same-store sales increased 4%, and profit margins and earnings per share far exceeded expectations. Although Marmaxx's sales fell short of expectations, HomeGoods, TJX Canada, and TJX International all achieved significant growth of 6% to 7% in same-store sales, which highlights the strength of our diversified global business.”

In the second quarter, the company returned $1.3 billion to shareholders through share repurchases and dividends. The company also received $331 million in IEEPA tariff refunds during the quarter. Earlier, the US Supreme Court ruled that it was illegal for the Trump administration to levy tariffs under the International Emergency Economic Powers Act (IEEPA) and initiated large-scale tax refund procedures.

TJX also announced that it plans to increase the store growth rate to 4% from FY2028 and raise the long-term global store target to 7,500. However, against the backdrop of inflation eroding consumers' purchasing power, TJX's expansion plans have raised concerns in the market.

In terms of performance guidance, TJX expects same-store sales to increase by 2% to 3% in the third quarter of fiscal year 2027, with adjusted earnings per share of 1.30-1.32 US dollars. The company expects to receive additional IEEPA tariff refunds in the fiscal third quarter, which will help reduce sales costs.

Looking at the whole year, the company maintained the same store sales growth guideline of 3% to 4% in FY2027. Excluding the estimated net revenue from tariff refunds of approximately $0.16, the company raised the annual adjusted earnings per share guide to the range of $5.15 to $5.20.

As of press release, TJX was down 3.97% in the premarket, after falling 5% previously.