EPS of $1.23 increased by 32.3% from previous year
Gross margin of 30.5%
Net income of 1.40B
"Ernie Herrman: 'We are confident that we continue to attract new shoppers in every country we operate in and that there are plenty of opportunities to further grow our customer base going forward.'" - Ernie Herrman, CEO
In Q4 2025, TJX Companies Inc (TJX) delivered robust financial results that exceeded market expectations, fueled by a 5% increase in comparable store sales driven by heightened customer transactions across all divisions. With total revenue reaching $16.4 billion, up 5% from the previous year, the company celebrated significant milestones, including surpassing $56 billion in annual sales and the opening of its 5,000th store. Profitability also saw substantial gains; net income grew to $1.398 billion, resulting in a 10% increase in diluted EPS to $1.23. Management highlighted strong gross profit margins at 30.5%, bolstered by effective merchandise flow and operational efficiencies amidst a challenging economic backdrop.
**Diluted EPS:** $1.23, up from $1.12 adjusted for last year
**Gross Profit Margin:** 30.5%, up 100 basis points YoY
**Operating Income Margin:** 11.2%, up by 70 basis points from last year
Financial Highlights
Financial Overview:
- Total Revenue: $16.4 billion (Q4 2025), +5% YoY
- Net Income: $1.398 billion, +10% YoY
- Diluted EPS: $1.23, up from $1.12 adjusted for last year
- Gross Profit Margin: 30.5%, up 100 basis points YoY
- Operating Income Margin: 11.2%, up by 70 basis points from last year
Operational Efficiency Metrics:
- SG&A Expense Ratio: 19.2%, up 30 basis points; reflects strategic investment in personnel
- Pretax Profit Margin: 11.6%, driven by lower shrink rates andexpense leverage.
- Return on Equity (ROE): 16.7%
- Debt to Equity Ratio: 1.522, indicating manageable leverage despite market uncertainties.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
16.35B
31.02%
16.26%
Gross Profit
4.98B
33.13%
12.11%
Operating Income
1.85B
37.84%
9.10%
Net Income
1.40B
30.65%
7.79%
EPS
1.23
32.26%
6.96%
Key Financial Ratios
currentRatio
1.18
grossProfitMargin
30.5%
operatingProfitMargin
11.3%
netProfitMargin
8.55%
returnOnAssets
4.4%
returnOnEquity
16.7%
debtEquityRatio
1.52
operatingCashFlowPerShare
$2.38
freeCashFlowPerShare
$1.92
dividendPayoutRatio
30.2%
priceToBookRatio
16.92
priceEarningsRatio
25.4
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key Insights from Management:
- Ernie Herrman, CEO: "Our sales, profitability, and earnings per share were all well above our expectations, driven by a growth in customer transactions due to our exceptional value offerings, particularly during the holiday season."
- John Klinger, CFO: "Pretax profit margins improved due to lower shrink and expense leverage, demonstrating our operational strengths. We're committed to continuing this trend as we adapt to shifting market conditions."
- On Market Resilience: Herrman noted that TJX remains well-positioned due to its diverse vendor base, stating, "Our ability to buy close to need ensures that we can adapt swiftly to macro trends."
Ernie Herrman: 'We are confident that we continue to attract new shoppers in every country we operate in and that there are plenty of opportunities to further grow our customer base going forward.'
— Ernie Herrman, CEO
John Klinger: 'We’re planning net interest income of $98 million which we expect to deliver fiscal 2026 pretax profit margin by 20 basis points.'
— John Klinger, CFO
Forward Guidance
For FY 2026, management projected solid growth, estimating total sales between $58.1 billion and $58.6 billion, reflecting a 3% to 4% increase. Guidance includes a focus on expanding e-commerce, with an anticipated comp store sales growth of 2% to 3%. The expected pretax margin of 11.3% to 11.4% underscores management's operational confidence despite facing heightened competitive pressure. Investors should watch for results from new openings, especially in rural markets and international expansions, as well as performance in key segments during typically slower quarters.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
TJX Focus
30.45%
11.30%
16.70%
25.40%
BURL
43.00%
10.80%
19.00%
17.64%
GES
44.10%
11.10%
16.10%
2.02%
URBN
32.30%
7.66%
4.87%
10.63%
PLCE
28.50%
1.67%
13.40%
-3.92%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given TJX's consistent performance in driving sales and earnings growth alongside its operational strengths, the company presents a compelling investment opportunity. The ability to adapt to consumer preferences and market trends positions it favorably against its competitors. Investors should keep an eye on ongoing execution of growth strategies, particularly in store expansions and the leveraging of digital sales. Current valuation metrics suggest reasonable upside potential, provided the company meets its fiscal 2026 guidance.
Key Investment Factors
Growth Potential
TJX's extensive market presence across the US, Canada, and Europe provides significant growth opportunities, with plans to continue opening stores and targeting increased store count up to 7,000 globally.
Profitability Risk
Potential risks include fluctuating consumer confidence affecting sales, adverse impacts from tariffs on sourcing costs, and competitive pressures from traditional retailers increasing market saturation.
Financial Position
The company maintains a strong balance sheet with $5.3 billion in cash. The consistently low debt equity ratio suggests prudent capital management, enabling operational flexibility in light of economic uncertainties.
SWOT Analysis
Strengths
Diverse product offerings with a wide range of brands appealing to various demographics
Strong operational efficiencies reflected in improving margins
Established presence in key markets, allowing for significant customer reach
Weaknesses
Higher SG&A costs affecting profitability in the short term
Dependence on consumer disposable income which can fluctuate with economic conditions
Opportunities
Planned expansion into Spain and the continued opening of new stores across existing markets
Growing e-commerce platform can enhance revenue growth through digital channels
Rural market expansions offer new customer bases and less saturated competition
Threats
Increased competition from both off-price and traditional retailers
Economic downturns and changes in consumer spending habits