TJX edged past first-quarter earnings and revenue views, but same-store sales fell short. The retailer guided lower on the current quarter and maintained its full-year outlook despite tariffs, though the earnings forecast is below Wall Street estimates. TJX stock fell modestly from record highs, within range of buy points.
TJX, the parent behind off-price retailers TJX Maxx, Marshalls and Home Goods, reported earnings of 92 cents per share, down 1 cent from last year. Revenue increased 5% to $13.11 billion.
FactSet expected earnings of 91 cents per share on $13.01 billion in revenue.
Overall comparable sales rose 3%, just missing consensuss for 3.1% growth.
MarMaxx sales, which includes TJ Maxx and Marshalls, grew 4% to $8.05 billion to outpace estimates for $8.02 billion.
Home Goods revenue increased 8% to $2.25 billion, while analysts expected $2.24 billion in sales for the quarter.
Same-store sales for MarMaxx rose 2%, short of estimates for 2.8% growth. Home Goods' compss increased 4%. But FactSet expected 4.7%.
TJX's pretax profit margin declined to 10.3% from 11.1%. The gross profit margin eased to 29.5% from 30% due to negative mark-to-market adjustments on inventory hedges.
Total inventories increased to $7.1 billion as of May 3 from $6.2 billion at the end of Q1 last year.
TJX expects to repurchase $2 billion to $2.5 billion of its stock this year, but may adjust that figure.
TJX Outlook
CEO Ernie Herman said the results gives him confidence in in TJX's ability to gain market share across all geographies and added that the second quarter is off to a "strong start." Herman added that TJX's off-price business model should serve well in today's macro environment.
For Q2, TJX expects earnings to increase 1%-4% to 97 cents per share to $1 per share on 2%-3% comparable sales growth. The retailer expects its pretax profit margin will decline 0.4 to 0.5 percentage points, and range from 10.4% to 10.5%.
FactSet had forecast Q2 earnings of $1.03 per share adjusted on 3.1% comparable sales growth.
TJX maintained its full-year guidance for EPS of $4.34-$4.43, up 2%-3%, with comps up 2%-3%. The company's outlook assumes that the May 21 tariff levels on China imports of 30% will remain in place for the rest of the year. TJX also assumes that it can offset the "significant incremental pressure" it has and continues to experience from tariffs.
But analysts had forecast full-year earnings of $4.49 per share on 2.9% comparable sales growth.
Tariffs Impact
TD Cowen on Tuesday lifted its price target on TJX stock, noting that the reduction in China tariffs helps alleviate pressure on its vendor exposure in the region.
The U.S. last week announced a trade deal that slashed tariffs on Chinese-made goods to 30% from 145% for 90 days while further negotiations take place.
President Donald Trump has altered or paused his "reciprocal" tariffs on various countries multiple times since the April 2 "Liberation Day" announcement. And a majority of the current tariff levels are not final as the U.S. is still negotiating with most of the world.
TD Cowen also expects that the off-price buying environment should be strong in the second half of the year based on supply chain and tariff disruptions. The firm raised its price target on TJX stock by $2 to 142 and kept a buy rating on the shares.
Reuters reported in mid-April that less than 10% of the merchandise for TJX's U.S. businesses is directly imported from China.
TJX Stock
TJX stock slid 2.9% to 131 on Wednesday.
Still, the stock is trading in a buy zone for a double-bottom base with a 127.58 entry.
Shares previously rallied into the buy zone after falling back below the buy point following its initial April 3 breakout.
TJX stock is also actionable from a short consolidation forged around the top of the double-bottom base. A three-weeks-tight entry of 131.30 acts as the specific trigger.
TJX stock is up more than 8% this year and is trading around its Tuesday record high of 135.85.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
