TJX, the parent behind off-price retailers TJ Maxx, Marshalls and Home Goods, reported better-than-expected fiscal 2026 second-quarter earnings and revenue early Wednesday. The S&P 500 retailer also expects full fiscal-year profit to grow around 6% as it believes it can offset increased tariff costs.
TJX reported that fiscal 2026 Q2 EPS grew 14.6% to $1.10 with revenue totaling $14.40 billion, up 7% vs. a year ago. The company's comparable sales grew 4%, above analyst consensus and marking the 11th consecutive quarterly increase. Prior to the S&P 500 component's report, analysts predicted earnings of $1.01 per share and revenue coming in at $14.14 billion, according to FactSet.
TJX reported merchandise margin was flat despite "higher tariff costs versus last year." Total inventories at the beginning of August were up around 14% to $7.4 billion, according to TJX. Brian Mulberry, senior portfolio manager at Zacks Investment Management, noted early Wednesday that this was the only possible "negative" from the earnings release. However, Mulberry wrote that it is "understandable as onshoring merchandise ahead of tariffs was a strategic move to protect against falling margins."
TJX also on Wednesday announced that for the full fiscal year, it now expects comparable sales to be up 3%. The S&P 500 company also raised its diluted earnings per share outlook in the range of $4.52 to $4.57, which would represent a 6% to 7% increase vs. last year's $4.26. TJX said that the guidance assumes that the current tariffs level will "stay in place for the remainder of the year." and that company executives believe it can "offset the significant pressure it expects from tariffs throughout fiscal 2026."
"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," CEO Ernie Herrman said Wednesday in the earnings release.
S&P 500: TJX Stock Performance
TJX stock rose 2.7% to 138.24 in Wednesday morning stock market action. That put the stock's weekly advance at more than 4%, as it works on its third straight up week. Entering Wednesday's stock market, the S&P 500 component was up around 8% in August and TJX has advanced 15.7% the 2025 stock market, placing it 146th on the S&P 500 index this year.
The S&P 500 stock is slightly extended from an early entry after retaking support its 10-week moving average on Aug. 15, according to MarketSurge. TJX also on Wednesday moved above a traditional 135.85 buy point from a cup base, according to MarketSurge charts. However, given the current stock market, there is some risk involved with this buy point.
The Fed Factor
The current market status is due, in part, to uncertainty regarding Federal Reserve Chairman Jerome Powell's annual Jackson Hole speech Friday morning.
Powell in prior years has used the event to signal key policy changes. Markets will be watching to determine his stance with regard to a possible Fed rate cut in September.
Probability of a rate cut at the Fed's Sept. 17 meeting stands at around 83%, according to the CME FedWatch tracker of 30-day Fed funds futures prices. That's down from a virtual lock before some hot inflation and economic data this past week. Expectations for cuts in at the Fed's October and December meetings stood in the 80% to 90% range.
Investors can also keep tabs on the Leaderboard, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
The S&P 500 retailer has an 87 Composite Rating out of a best-possible 99. TJX stock also has a 68 Relative Strength Rating and a 79 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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