Executive Summary
The TJX Companies reported a solid QQ1 2026 performance characterized by 3% consolidated comp sales growth, executed across all geographies and banners, with HomeGoods leading the way at 4%. The quarter benefited from robust customer traffic and a favorable mix of good/better/best brands, underscoring TJX’s enduring value proposition in a challenging macro environment. Management cautioned on tariff headwinds and currency effects, but affirmed confidence in a long-running, flexible replenishment model and international expansion opportunities that could sustain growth beyond the current cycle. Near-term margin pressures were driven by inventory hedges and tariff-related costs, yielding a 10.0% operating margin and 29.5% gross margin; however, full-year guidance was left intact, reflecting expectations for back-half improvement as hedges unwind and tariff impacts are mitigated. The balance sheet remains liquidity-rich with over $4.25B in cash and a diversified capital allocation approach (buybacks and dividends), supporting TJX’s mission to expand share in off-price across the U.S. and international markets.
Key Performance Indicators
QoQ: -28.75% | YoY:-1.79%
QoQ: -25.89% | YoY:-3.18%
QoQ: -25.20% | YoY:-2.13%
Key Insights
Revenue: $13.111B (+5.1% YoY; -19.8% QoQ) | Gross Profit: $3.865B | Gross Margin: 29.48% (YoY -3.34% in margin terms, primarily due to hedges) | Operating Income: $1.316B (Margin 10.04%) | Pretax Income: $1.346B | Net Income: $1.036B (Net Margin 7.90%) | Diluted EPS: $0.92 | EBITDA: $1.66B | Inventory: up 15% YoY; per-store +7% | Cash Flow from Operations: $394M; Capex: $497M; Free Cash Flow: -$103M | Cash at End of Period: $4.255B | Total Assets: $31.858B | Total Liabilities: $23.355B | Total S...
Financial Highlights
Revenue: $13.111B (+5.1% YoY; -19.8% QoQ) | Gross Profit: $3.865B | Gross Margin: 29.48% (YoY -3.34% in margin terms, primarily due to hedges) | Operating Income: $1.316B (Margin 10.04%) | Pretax Income: $1.346B | Net Income: $1.036B (Net Margin 7.90%) | Diluted EPS: $0.92 | EBITDA: $1.66B | Inventory: up 15% YoY; per-store +7% | Cash Flow from Operations: $394M; Capex: $497M; Free Cash Flow: -$103M | Cash at End of Period: $4.255B | Total Assets: $31.858B | Total Liabilities: $23.355B | Total Stockholders’ Equity: $8.503B | Net Debt: $8.807B | Shares Outstanding (Diluted): 1.132B
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
13.11B |
5.06% |
-19.81% |
| Gross Profit |
3.87B |
3.34% |
-22.37% |
| Operating Income |
1.32B |
-1.79% |
-28.75% |
| Net Income |
1.04B |
-3.18% |
-25.89% |
| EPS |
0.92 |
-2.13% |
-25.20% |
Management Commentary
Key management themes from the QQ1 2026 earnings call:
- Tariff and macro environment: "We are laser focused on our initiatives to offset them by remaining flexible and executing our opportunistic buying approach." This highlights TJX’s commitment to offset tariff pressures through sourcing flexibility and value-driven merchandising.
- Broad-based demand and traffic: "Our consolidated comp sales growth of 3% came in at the high-end of our plan. Every division… drove increases in comp sales and customer transactions." Management emphasized broad participation across banners and geographies, with HomeGoods leading the way in strengthening category mix.
- Inventory and availability: "Balance sheet inventory was up 15% and inventory on a per store basis was up 7%… Availability of merchandise remains outstanding and we are set up very well to continue to flow fresh assortments to our stores and online." This underpins TJX’s ability to sustain a compelling treasure-hunt experience.
- Margin dynamics and guidance: John discussed that Q2 is the period most affected by tariffs due to orders placed before tariff announcements, with mitigation efforts in place and expectations that the back half will improve as hedges unwind and tariffs are offset by buying flexibility. He also noted that Q1 gross margin was pressured by hedging mark-to-market movements and that the full-year gross margin guidance is 30.4%-30.5% (down 10-20 bps).
- International growth and JV strategy: TJX reiterated expansion opportunities in Europe (TK Maxx) and plans to introduce Spain next year, plus joint ventures in Mexico and the Middle East, highlighting a diversified growth vehicle beyond the U.S. banner.
- Capital allocation and shareholder value: The company remains committed to reinvestment alongside significant cash returns to shareholders via buybacks and dividends, supported by a strong balance sheet and cash position.
We are laser focused on our initiatives to offset them by remaining flexible and executing our opportunistic buying approach.
— Ernie Herrman
Availability of merchandise remains outstanding and we are set up very well to continue to flow fresh assortments to our stores and online.
— John Klinger
Forward Guidance
Management maintained a steady full-year guidance despite tariff volatility: comp sales +2% to +3%; consolidated sales of $58.1B to $58.6B (up 3%–4%); gross margin 30.4%–30.5% (down 10–20 bps); SG&A at 19.3%; net interest income ~ $98M; tax rate ~25.1%; full-year diluted EPS guidance of $4.34–$4.43. Q2 guidance calls for comp gains of 2%–3% and EPS of $0.97–$1.00. Key assumptions include the ability to offset incremental tariff costs via flexible buying, ticket adjustments, and diversifying sourcing; hedges will unwind to support margin resilience in H2. Risks include tariff evolution, FX volatility, supply chain disruption, and a potential deceleration in consumer demand. Investors should monitor: tariff policy developments, vendor negotiations, inventory levels and turns, freight costs, and regional macro trends that could impact foot traffic and online penetration.