TJX Companies reported a second-quarter profit beat on Wednesday, driven by stronger-than-expected earnings and net sales, but warned of a slowdown in its core apparel divisions and maintained a cautious outlook on consumer spending.
The off-price retailer posted adjusted earnings per share of $1.22, an 11% increase from a year earlier and above the $1.19 estimate from Refinitiv LSEG. Net sales rose 5.4% to $15.18 billion, narrowly surpassing the $15.16 billion consensus. Comparable store sales at Marmaxx, TJX’s largest division, grew 1% in the quarter, down from 6% in the prior period.
TJX lifted its full-year adjusted EPS guidance to a range of $5.31 to $5.36 from its prior forecast of $5.08 to $5.15. The company maintained its comparable store sales growth target of 3% to 4% for the year. For the third quarter, adjusted EPS is expected to reach $1.30 to $1.32, excluding a projected 6-cent benefit from tariff refunds, though this remains below analyst expectations of $1.35.
Shares of TJX fell about 3% in midday trading, with the stock last quoted at $150.95, down $1.17 or 0.77%.
CEO Ernie Herrman attributed the quarter’s challenges to execution issues within the company’s control, stating that certain basic and impulse-driven items were missing from shelves. He noted that sales trends are already improving in the current quarter. Herrman added that the company remains confident in its merchandise availability and growth plans.
Analysts highlighted broader concerns about consumer discretionary spending. William Blair’s Dylan Carden pointed to weaker ticket sizes, suggesting reduced shopping frequency and sustained price increases over the past year and a half may reflect broader consumer weakness. TJX faces intensifying competition from rivals such as Ross Stores and Burlington Stores as shoppers become more selective amid economic uncertainty and a softer labor market.
The company plans to accelerate store openings to 4% annually starting next year, up from its prior target, while continuing to expand its merchandise pricing range from under $10 to high-end designer goods. TJX also noted that tariff refunds will lower third-quarter merchandise costs, though higher incentive compensation and bonus expenses will partly offset these savings.
TJX’s merchandising strategy includes increased marketing through new launches and celebrity-led campaigns to bolster demand.
