Off-price retail company TJX (NYSE: TJX) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 5.4% year on year to $15.18 billion. Its non-GAAP profit of $1.22 per share was 2.8% above analysts’ consensus estimates.
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TJX (TJX) Q2 CY2026 Highlights:
- Revenue: $15.18 billion vs analyst estimates of $15.14 billion (5.4% year-on-year growth, in line)
- Adjusted EPS: $1.22 vs analyst estimates of $1.19 (2.8% beat)
- Adjusted EPS guidance for the full year is $5.18 at the midpoint, missing analyst estimates by 0.9%
- Operating Margin: 13.1%, up from 11.2% in the same quarter last year
- Free Cash Flow Margin: 11.4%, up from 9.2% in the same quarter last year
- Locations: 5,285 at quarter end, up from 5,134 in the same quarter last year
- Same-Store Sales rose 4% year on year, in line with the same quarter last year
- Market Capitalization: $166.6 billion
Company Overview
Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE: TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years.
With $62.36 billion in revenue over the past 12 months, TJX is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because there are only a finite number of places to build new stores, making it harder to find incremental growth. To expand meaningfully, TJX likely needs to tweak its prices or enter new markets.
As you can see below, TJX grew its sales at a tepid 6.8% compounded annual growth rate over the last three years, but to its credit, it opened new stores and increased sales at existing, established locations.
This quarter, TJX grew its revenue by 5.4% year on year, and its $15.18 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 5.3% over the next 12 months, similar to its three-year rate. We still think its growth trajectory is attractive given its scale and implies the market is baking in success for its products.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
TJX sported 5,285 locations in the latest quarter. Over the last two years, it has opened new stores quickly, averaging 2.7% annual growth. This was faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Same-Store Sales
The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
TJX’s demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 4.2% per year. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives TJX multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.
In the latest quarter, TJX’s same-store sales rose 4% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from TJX’s Q2 Results
We were impressed by how significantly TJX blew past analysts’ gross margin expectations this quarter. On the other hand, its EPS guidance for next quarter missed and its full-year EPS guidance fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 2.8% to $146.63 immediately after reporting.
So should you invest in TJX right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
