TJX Earnings and Sales Surpass Estimates in Q1, Comp Sales Rise

Core Insights - The TJX Companies, Inc. reported first-quarter fiscal 2026 results with earnings per share (EPS) of 92 cents, slightly down from 93 cents in the previous year, but above the Zacks Consensus Estimate of 90 cents [3] - Net sales reached $13,111 million, a 5% increase year over year, surpassing the Zacks Consensus Estimate of $13,024 million [3] - The company reaffirmed its fiscal 2026 outlook, expecting consolidated comparable store sales growth of 2% to 3% and EPS between $4.34 and $4.43, reflecting a 2% to 4% increase from the previous year's $4.26 EPS [10][11] Financial Performance - Consolidated comparable store sales increased by 3%, driven by higher customer transactions, with specific growth rates of 2% at Marmaxx, 4% at HomeGoods, 5% at TJX Canada, and 5% at TJX International [4] - The pretax profit margin was reported at 10.3%, down 0.8 percentage points from the previous year, while the gross profit margin was 29.5%, down 0.5 percentage points year over year [4][5] - Selling, general and administrative (SG&A) costs as a percentage of sales increased to 19.4%, reflecting a 0.2 percentage point rise due to higher store wage and payroll costs [5] Store Expansion and Financial Health - The company added 36 stores during the first quarter, bringing the total to 5,121 stores [6] - As of the end of the quarter, TJX had cash and cash equivalents of $4,255 million, long-term debt of $2,867 million, and shareholders' equity of $8,503 million [6] - Operating cash flow generated during the quarter was $394 million [6] Shareholder Returns - During the quarter, TJX returned $1 billion to shareholders, including $613 million in stock repurchases and $420 million in dividends [7] - A new stock repurchase program was approved, authorizing up to an additional $2.5 billion in share buybacks, with approximately $2.9 billion remaining under current authorizations [7] Inventory and Market Position - Consolidated inventories per store increased by 7% year over year, indicating strong merchandise availability [8] - The company is well-positioned to deliver fresh assortments to its stores and online platforms throughout spring and summer 2025 [8] Future Guidance - For the second quarter of fiscal 2026, management expects comparable store sales growth of 2% to 3% and a pretax profit margin between 10.4% and 10.5% [11] - The quarterly EPS is projected to range from 97 cents to $1.00, reflecting a year-over-year increase of 1% to 4% [11] - The guidance includes anticipated negative impacts from additional tariff costs related to merchandise commitments made prior to new tariffs announced in March and April 2025 [11][12]