The second quarter saw TJX Cos. gain across key metrics as it managed tariff-related cost increases and saw strength in its HomeGoods business.
Net income in the quarter was $1.24 billion, $1.10 per diluted share, versus $1.1 billion, or 96 cents per diluted share, in the year-prior period, the company indicated.
A second-quarter analyst consensus estimate from Zacks Investment Research called for earnings per diluted share of $1.01 and revenues of $14.07 billion.
Company comparable sales increased 4% in the quarter year over year, with Marmaxx, which includes T.J. Maxx and Marshalls, up 3%, HomeGoods up 5%, TJX Canada up 9% and TJX International up 5%, the company reported.
Net sales were $14.4 billion versus $13.47 billion in the year-before quarter.
TJX stated that it is increasing its outlook for pretax profit margin to be in the range of 11.4% to 11.5%, flat to down 0.1 percentage point versus 11.5% in the year past. The company is also raising its diluted earnings per share outlook to be in the range of $4.52 to $4.57, up 6% to 7% increase over the prior year’s $4.26. TJX noted that the full-year diluted earnings per share guidance now reflects the second quarter’s above-plan results as well as a smaller negative impact from unfavorable foreign currency exchange rates versus the company’s previous outlook
In a conference call, TJX executives asserted that the company’s tariff mitigation strategies allowed it to offset cost pressure from duties in the second quarter, emphasizing that merchandise margin was flat despite higher tariff costs. TJX will continue pricing against other retailers for similar goods, as well as looking to offset tariff cost pressures as it buys globally to maintain strong value for customers.
John Klinger, TJX executive VP and CFO, said in the conference that HomeGoods’ eclectic assortment of home fashions sourced from around the world is resonating with customers and that TJX can continue to capture household goods share of the market in the United States.
Ernie Herrman, TJX president and CEO, said in announcing the financial results, “Sales, pretax profit margin, and earnings per share were all above our plan. As we have seen through so many different retail and economic environments, consumers were drawn to our excellent values and brands. Customer transactions were up at every division as we saw strong demand at each of our U.S. and international businesses. Our teams across the company successfully executed our off-price business fundamentals to deliver an exciting treasure hunt of merchandise at great value to our customers, every day. With our strong second-quarter profit results, we are raising our full-year guidance for both pretax profit margin and earnings per share. 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. Our teams are energized by the opportunities we see in the marketplace for excellent brands and fashions and our initiatives to keep attracting shoppers to our retail brands. Longer term, we are convinced that we have a long runway ahead to capture additional market share and continue our successful growth around the world.”
