TJX Companies shares were dinged Wednesday on softness in the off-price retailer’s largest division and a conservative guide. Still, there was a lot to like about the quarter and what management had to say. Revenue in the company’s fiscal 2027 second quarter increased 5.4% year over year to $15.18 billion, edging out the $15.17 billion consensus estimate, according to LSEG. Earnings per share (EPS) for the July quarter, which actually ended on Aug. 1, increased 10.9% to $1.22, exceeding expectations of $1.19, LSEG data showed. Same-store sales , or what the retail industry also calls comps, increased 4%, ahead of the 3.3% estimate, according to FactSet. TJX YTD mountain TJX Companies YTD TJX traded down more than 3% to around $146 after quarterly sales at the company’s Marmaxx segment, which houses the T.J. Maxx and Marshalls chains in the U.S., gained 3% to $9.11 billion but missed estimates. With shares down 13% since their $168 record close on June 12, the recent weakness is likely an opportunity for patient investors because the Marmaxx issue appears to be already under control, and this management team knows to under-promise on guidance, only to over-deliver when the actual results come through. The stock is down 5% in a year with plenty of ups and downs. Bottom line Another quarter in which TJX Companies demonstrated the power of being able to offer best-in-class value on “good, better, and best” merchandise, combined with a treasure hunt shopping experience that draws shoppers into physical locations, despite the growing adoption of online shopping. Sales came ahead of expectations on the back of better-than-expected overall same-store sales performance. EPS benefited from a better-than-expected gross margin (even after stripping out a 2 percentage point benefit from tariff refunds), while operating cash flow more than doubled expectations. On the post-earnings call, CFO John Klinger said that strong same-store sales growth was the result of an increase in both customer transactions as well as average basket size. Weakness in Marmaxx was more than offset by strength in the company’s other three divisions, HomeGoods, TJX Canada, and TJX International. Recognizing that Marmaxx accounts for more sales than all three of the other divisions combined, a miss is disappointing and warrants further investigation. CEO Ernie Herrman said on the call: “At Marmaxx, we believe we could have executed our store mix better, and by that I mean we could have been sharper on having the right goods in the right stores at the right time. We are convinced that the issues were self-inflicted and within our control, and we have made good progress working through them.” He was adamant that the issues were not a result of competition. Fortunately, the team did note that its current fiscal third quarter is off to a strong start, with the CEO adding that he’s confident of “greater improvement by the holiday selling season.” During the question-and-answer session,…
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