TJX Ltd. The company on Wednesday touted a “strong start” to the holiday shopping season, but its shares fell after the fast-growing retailer provided guidance that appeared to disappoint Wall Street.
TJX handily beat Wall Street forecasts in its fiscal third quarter, but expects earnings in the holiday quarter to be between $1.12 and $1.14 per share, below estimates of $1.18, according to LSEG.
Here’s how TJX performed compared to Wall Street expectations, according to a survey of analysts by LSEG:
- Earnings per share: $1.14 Estimated $1.09
- income: US$14.06 billion Expected to be $13.95 billion
The company’s net profit for the three months ended Nov. 2 was $1.3 billion, or $1.14 a share, compared with $1.19 billion, or $1.03 a share, a year earlier.
Sales increased to US$14.06 billion, an increase of approximately 6% from US$13.27 billion in the same period last year.
“Across the company, customer transactions drove our sales growth, which tells us that our values and treasure hunt shopping experience are attracting customers,” CEO Ernie Herrman said in a release. Wide range of customers.”
“The fourth quarter is off to a strong start and we are excited about the opportunities for the holiday selling season. In stores and online, we provide consumers with an ever-changing and inspiring shopping destination to buy gifts at great value , and feel confident that there will be something for everyone when they shop with us.”
TJX expects comparable sales to rise 2% to 3% in the holiday quarter, essentially in line with StreetAccount analysts’ forecast of 3% growth. TJX said in a release that the changes to its pre-tax margin and holiday quarter earnings guidance “are due to an expected reversal in the timing of certain charges on third-quarter earnings.”
TJX maintained its full-year comparable sales guidance of 3% growth, slightly below StreetAccount analysts’ forecast of 3.2% growth. It raised its pre-tax margin forecast to 11.3% from 11.2%, in line with StreetAccount’s forecast and earnings per share guidance. Full-year earnings are now expected to be $4.15 to $4.17, up from the previous range of $4.09 to $4.13. At the high end, its guidance was in line with LSEG’s forecast of $4.17.
After a year of rapid growth, the discount store behind Marshalls, HomeGoods and TJ Maxx is still seeing rising sales. It is winning over value-seeking consumers who buy markdowns from department stores, e.g. macy’s department store and Kohl’sand making headway among younger shoppers who don’t see the stigma of low-price shopping.
Still, its growth is slowing, and TJX is looking to overseas markets to boost sales. Comparable sales at its Marmaxx segment, which includes TJ Maxx, Marshall’s and Sierra stores, rose 2% in the quarter, compared with a 7% increase in the same period last year. Comparable sales at HomeGoods increased 3% compared with 9% in the same period last year; comparable sales at TJX Canada increased 2% compared with 3% in the same period last year.
The only segment that outperformed last year’s results was TJX International, which includes Europe and Australia. TJX’s European operations struggled earlier this year due to execution issues, but the unit’s comparable sales rose 7% in the quarter, compared with 1% a year ago.
Last quarter, the company announced it would take 35% equity Acquired Dubai retailer Brands for Less for $360 million. The privately held brand is the only major discount brand in the region, operating more than 100 stores and e-commerce operations primarily in the United Arab Emirates and Saudi Arabia.
On Wednesday, TJX announced plans to enter Spain in early 2026 with TK Maxx.
Ahead of the company’s report, some analysts were concerned about TJX and other discount retailers such as burlington store and Ross Store Unseasonably warm weather in October could have a disproportionate impact. Bank of America analysts wrote in a research note that off-price retailers tend to be more vulnerable to adverse weather patterns than traditional retailers because low-income shoppers often buy items when they need them, rather than ahead of time.
In the fall, clothing-heavy retailers like TJX want shoppers to come in and stock up on new outerwear and other gear for cooler weather. If low-income consumers delay purchases because of warm weather, it could hurt TJX’s sales.
However, warmer-than-expected weather does not appear to have had a significant impact on TJX’s sales.
