TJX COMPANIES INC /DE/ Q1 FY2026 earnings call

Management Statement and Operational Highlights:

• Thanked global associates for their commitment.
• First quarter comp sales grew 3% at the high-end of plan, every division drove comp sales and customer transactions growth. Pretax profit margin and earnings per share exceeded expectations.
• Teams delivered a mix of brands across categories to serve wide customer demographic, offering great value daily.
• Confident in value proposition and business flexibility. Second quarter off to strong start with planned initiatives.
• Global buying infrastructure with over 21,000 vendors from 100+ countries, long-standing vendor relationships.
• Operate stores across wide customer demographic with good, better, best brands.
• Business model driven by flexibility, allowing rapid changing selections.
• Focus on talent with TJX University and training programs, strong culture.

Segment Performance:

• Marmaxx: Comp sales increased 2%, segment profit margin was 13.7%, down 50 basis points.
• HomeGoods: Comp sales growth of 4%, segment profit margin was 10.2%, up 70 basis points versus last year.
• TJX Canada: Comp sales were up 5%. Segment profit margin on a constant currency basis was 10.6%, down 170 basis points last year.
• TJX International: Comp sales increased 5%. Segment profit margin on a constant currency basis was 4.2%, up 20 basis points versus last year.

Guidance:

• Full year: Overall comp sales expected to increase 2% to 3%. Consolidated sales planned in range of $58.1 billion to $58.6 billion, up 3% to 4%. Pretax profit margin in range of 11.3% to 11.4%, down 10 to 20 basis points. Gross margin in range of 30.4% to 30.5%, down 10 to 20 basis points. SG&A 19.3%. Net interest income about $98 million. Diluted earnings per share in range of $4.34 to $4.43.
• Second quarter: Comp sales expected to increase 2% to 3%. Consolidated sales in range of $13.9 billion to $14 billion. Pretax profit margin in range of 10.4% to 10.5%, down 40 to 50 basis points. Gross margin 30%. SG&A 19.7%. Diluted earnings per share in range of $0.97 to $1.

Risks:

• Tariff pressure, uncertainty in vendor shipments due to unclear tariff environment.
• Potential inventory availability issues in some categories if vendors cut back or delay shipments.

Q: I wanted to ask about inventory availability. We're in a different environment now with delayed ship sailings and tariff uncertainty. Can you give more context on what's changed and pricing in the back half?

A: Yes, shipments were delayed pre-tariff adjustment, but inventories are up reflecting good buys. Flexibility allows taking advantage of adjacent categories. Pricing will maintain value gap versus traditional retailers, with ability to adjust retails as needed.

Q: Could you speak to the progression of comp trends at Marmaxx in March and April relative to the start of the quarter with weather disruption and the strong start to the second quarter?

A: Saw weather impact early in Q1, comps improved as weather got better. Every division is participating in comp growth, with home business like HomeGoods bucking industry trends and starting Q2 strong.

Q: What percent of your product is direct-sourced and how might that change? Also, any signs of gaining share with specific income cohorts?

A: Less than 10% of product is direct-sourced. No intentional major shifts. Saw strong sales across all income demographic bands, leaning slightly towards lower-income, with balanced mix appealing to all demos.