TJ Maxx parent company posts strong holiday, but issues weaker-than-expected guidance

Core Viewpoint - TJX Companies reported better-than-expected results for the holiday quarter, driven by increased customer transactions, indicating continued market share gains from department stores and other discounters as consumers seek deals [1] Financial Performance - For fiscal 2025 fourth quarter, TJX's net income was $1.40 billion, or$1.23 per share, compared to $1.40 billion, or$1.22 per share, a year earlier [4] - Sales remained relatively unchanged at $16.35 billion, slightly down from$16.41 billion a year prior, with the previous year benefiting from an extra selling week [5] - Earnings per share exceeded expectations at $1.23 compared to the anticipated$1.16, while revenue also surpassed estimates at $16.35 billion versus$16.20 billion [10] Future Guidance - For fiscal 2026, TJX anticipates comparable sales growth of 2% to 3%, below Wall Street's expectation of 3.4% [2][3] - The earnings guidance for fiscal 2026 is projected between $4.34 and$4.43 per share, which is lower than the estimated $4.59 per share [2] Market Dynamics - The company is benefiting from a "trade-down" effect as consumers shift from department stores to TJX for lower-priced clothing and household goods [6][7] - The strong U.S. dollar and unfavorable exchange rates are expected to negatively impact earnings growth by 3% in fiscal 2026 [3] Strategic Expansion - As growth in the U.S. slows, TJX is expanding internationally, including a stake in Brands for Less in Dubai and plans to enter the Spanish market [9]