TJX Companies Announce Operating Results for Second Quarter

September 1, 2025  by Karen Parrish in Business Strategy, Industry   

For the first half of Fiscal 2026, net sales were $27.5 billion, an increase of 6% versus the first half of Fiscal 2025. First half Fiscal 2026 consolidated comparable sales increased 4%. Net income for the first half of Fiscal 2026 was $2.3 billion. First half Fiscal 2026 diluted earnings per share were $2.02, up 7% versus $1.89 in the first half of Fiscal 2025.

CEO and President Comments
Ernie Herrman, chief executive officer and president of The TJX Companies, Inc., stated, “I am extremely pleased with our second quarter performance. Sales, pretax profit margin, and earnings per share were all above our plan. As we have seen through so many different retail and economic environments, consumers were drawn to our excellent values and brands. Customer transactions were up at every division as we saw strong demand at each of our U.S. and international businesses. Our teams across the Company successfully executed our off-price business fundamentals to deliver an exciting treasure hunt of merchandise at great value to our customers, every day. With our strong second quarter profit results, we are raising our full-year guidance for both pretax profit margin and earnings per share. The third quarter is off to a strong start, and I am very confident in our position as we enter the second half of the year. Our teams are energized by the opportunities we see in the marketplace for excellent brands and fashions and our initiatives to keep attracting shoppers to our retail brands. Longer term, we are convinced that we have a long runway ahead to capture additional market share and continue our successful growth around the world.”

Margins
For the second quarter of Fiscal 2026, the Company’s pretax profit margin was 11.4%, well above the Company’s plan and 0.5 percentage points above last year’s second quarter pretax profit margin of 10.9%.

Gross profit margin for the second quarter of Fiscal 2026 was 30.7%, up 0.3 percentage points versus last year’s 30.4%, primarily due to favorable hedges. Merchandise margin was flat despite higher tariff costs versus last year.

Selling, general, and administrative (SG&A) costs as a percent of sales for the second quarter of Fiscal 2026 were 19.5%, a 0.3 percentage point decrease versus last year’s 19.8%. This was primarily driven by operational efficiencies as well as a benefit from the timing of certain expenses.

Net interest income negatively impacted second quarter Fiscal 2026 pretax profit margin by 0.1 percentage point versus the prior year.

The Company’s second quarter Fiscal 2026 pretax profit margin was above the high-end of its plan by 0.9 percentage points. This was due to a combination of items including lower-than-expected tariff costs, expense leverage on above-plan sales, and the timing of certain expenses, partially offset by higher incentive compensation accruals and contributions to TJX’s charitable foundations.

Inventory
Total inventories as of August 2, 2025, were $7.4 billion, compared to $6.5 billion at the end of the second quarter of Fiscal 2025. Consolidated inventories on a per-store basis as of August 2, 2025, including distribution centers, but excluding inventory in transit and the Company’s e-commerce sites, were up 10% on both a reported and constant currency basis versus last year. The Company’s inventory position reflects the excellent buying opportunities the Company saw in the marketplace during the second quarter. The Company is seeing outstanding availability of quality, branded merchandise and is very well-positioned to flow fresh assortments to its stores and online throughout the fall and holiday season. Inventory on a constant currency basis reflects inventory adjusted for the impact of foreign currency, if any, as described below.

Cash and Shareholder Distributions
For the second quarter of Fiscal 2026, the Company generated $1.8 billion of operating cash flow and ended the quarter with $4.6 billion of cash.

During the second quarter of Fiscal 2026, the Company returned a total of $1.0 billion to shareholders. The Company repurchased 4.1 million shares of TJX stock for a total of $515 million and paid $474 million in shareholder dividends.

During the first half of Fiscal 2026, the Company returned a total of $2.0 billion to shareholders. The Company repurchased 9.2 million shares of TJX stock for a total of $1.1 billion and paid $894 million in shareholder dividends.

The Company continues to expect to repurchase approximately $2.0 to $2.5 billion of TJX stock during the fiscal year ending January 31, 2026. The Company may adjust the amount purchased under this plan up or down depending on various factors. The Company remains committed to returning cash to its shareholders while continuing to invest in the business to support the near- and long-term growth of TJX.

Third Quarter and Full Year Fiscal 2026 Outlook
The Company’s third quarter and full year Fiscal 2026 guidance below assumes that the current level of tariffs on imports into the U.S. as of August 20, 2025 will stay in place for the remainder of the year. The Company’s guidance assumes that it can offset the significant pressure it expects from tariffs throughout Fiscal 2026.

For the third quarter of Fiscal 2026, the Company expects consolidated comparable sales to be up 2% to 3%. The Company is planning third quarter Fiscal 2026 pretax profit margin to be in the range of 12.0% to 12.1%, down 0.2 to 0.3 percentage points versus the prior year’s 12.3%. The Company is planning third quarter Fiscal 2026 diluted earnings per share to be in the range of $1.17 to $1.19, which would represent a 3% to 4% increase versus the prior year’s $1.14.

For the full year Fiscal 2026, the Company now expects consolidated comparable sales to be up 3%. The Company is increasing its outlook for pretax profit margin to be in the range of 11.4% to 11.5%, flat to down 0.1 percentage point versus the prior year’s 11.5%. The Company is also raising its diluted earnings per share outlook to be in the range of $4.52 to $4.57, which would represent a 6% to 7% increase over the prior year’s $4.26. The Company’s full year Fiscal 2026 diluted earnings per share guidance now reflects the second quarter’s above-plan results as well as a smaller negative impact from unfavorable foreign currency exchange rates versus the Company’s previous guidance.

Impact of Foreign Currency
Changes in foreign currency exchange rates affect the translation of sales and earnings of the Company’s international businesses into U.S. dollars for financial reporting purposes. In addition, ordinary course, inventory-related hedging instruments are marked to market at the end of each quarter. Changes in currency exchange rates can have a material effect on the magnitude of these translations and adjustments when there is significant volatility in currency exchange rates. Given the global operations of the Company, to facilitate comparability, the Company has provided sales growth and inventory on a constant currency basis, which assumes a constant exchange rate between periods for translation based on the rate in effect for the prior period.

The movement in foreign currency exchange rates had a one percentage point positive impact on the Company’s net sales growth in the second quarter of Fiscal 2026 versus the prior year. The overall net impact of foreign currency exchange rates had a $.02 positive impact on second quarter Fiscal 2026 diluted earnings per share.

The movement in foreign currency exchange rates had a neutral impact on the Company’s net sales growth in the first half of Fiscal 2026 versus the prior year. The overall net impact of foreign currency exchange rates had a neutral impact on the first half Fiscal 2026 diluted earnings per share.

A table detailing the impact of foreign currency on TJX’s net sales and pretax profit margin, as well as those of its international businesses, can be found in the Investors section of TJX.com.

The foreign currency exchange rate impact to diluted earnings per share does not include the impact currency exchange rates have on various transactions, which the Company refers to as “transactional foreign exchange.”