TJX Companies (NYSE: TJX) reported Q2 FY2027 net sales of $15.18 billion, up 5% year over year, while diluted EPS increased 24% to $1.36 from $1.10. Excluding the net benefit from tariff refunds and related compensation accruals, adjusted EPS rose 11% to $1.22, supported by higher merchandise margin and faster growth outside the Marmaxx division.

Core Earnings Results

Consolidated comparable sales increased 4%, matching the prior-year growth rate. Reported profitability received a significant benefit from tariff refunds, but the adjusted results still showed underlying margin expansion: adjusted gross margin rose 0.7 percentage points and adjusted pretax margin increased 0.5 percentage points.

The following table separates reported results from the company’s adjusted measures where applicable.

Adjusted results exclude the net effect of IEEPA tariff refunds and related incremental compensation expense accruals.

Business and Segment Performance

TJX’s divisions showed a clear divergence. Marmaxx, which generated about 60% of consolidated quarterly sales, recorded only 1% comparable-sales growth, while HomeGoods, Canada, and International each delivered increases of 6% to 7%.

HomeGoods produced the fastest reported U.S. growth, while TJX International led reported sales growth overall. Canada’s sales increased 8% on a constant-currency basis, compared with 6% as reported, while International grew 10% in constant currency versus 11% as reported.

Foreign exchange reduced consolidated sales growth by one percentage point, meaning constant-currency sales increased 6%. Currency had a $0.01 positive effect on diluted EPS.

Management acknowledged that Marmaxx sales were below its expectations. However, it said the division was improving at the start of the third quarter, while the availability of branded merchandise remained favorable.

Tariff Refunds Lifted GAAP Profit, but Merchandise Margin Also Improved

TJX received $331 million of refunds for previously paid IEEPA tariffs. The company also accrued $112 million of incremental year-end incentive compensation and discretionary bonuses connected with those refunds, producing a net pretax benefit of $219 million.

That net benefit added 2.0 percentage points to reported gross margin, 1.4 percentage points to pretax margin, and $0.14 to diluted EPS. It explains most of the difference between the 24% increase in reported EPS and the 11% increase in adjusted EPS.

The adjusted figures nevertheless indicate that profitability improved beyond the one-time refund effect. Adjusted gross margin increased to 31.4%, driven by higher merchandise margin. That benefit was partially offset by adjusted SG&A expenses rising to 19.7% of sales from 19.5%, primarily because of incremental store wage and payroll costs.

Cash Flow, Inventory, and Capital Allocation

TJX generated $2.2 billion of operating cash flow and ended the quarter with $6.0 billion in cash. Total inventory increased to $7.9 billion from $7.4 billion, although inventory per store was up a more moderate 2% as reported and 3% in constant currency.

The company returned approximately $1.3 billion to shareholders during the quarter. That included $798 million used to repurchase 5.1 million shares and $529 million in dividends. TJX continues to plan $2.75 billion to $3.0 billion of share repurchases for FY2027.

TJX added 23 stores during the quarter, ending with 5,285 locations and 137.9 million square feet of retail space.

Earnings Guidance

TJX raised its full-year pretax margin and EPS outlook following the second-quarter profit performance, while maintaining its comparable-sales forecast. The company did not provide the previous numerical ranges for the raised metrics in the supplied release.

The Q3 outlook includes an expected 0.5-percentage-point net pretax-margin benefit and a $0.06 EPS benefit from additional tariff refunds. Full-year guidance includes expected benefits of 0.3 percentage points and $0.16 per share, respectively. TJX cautioned that the amount, timing, and likelihood of additional refunds remain uncertain.

Beginning in FY2028, TJX plans to accelerate annual store-opening growth to 4%. It also increased its long-term target by 500 locations to 7,500 stores across its existing banners and countries.

Recent Insider Transactions

The six-month insider summary supplied for TJX reports 523,945 shares classified as purchases and 202,740 shares classified as sales, resulting in net purchases of 321,205 shares. Separately, the latest disclosed transactions with specific sale details included the following; the records do not establish the reasons for those transactions.

Risks Investors Need to Watch

• Marmaxx is growing more slowly than the other divisions. Its comparable sales increased only 1%, and its scale means continued weakness could weigh materially on consolidated growth.
• The sales outlook implies some moderation. Q3 comparable-sales guidance of 2% to 3% is below the 4% increase recorded in Q2.
• Tariff-refund benefits are uncertain. Both Q3 and full-year guidance include expected refunds whose amount and timing remain subject to legal, regulatory, and administrative developments.
• Labor costs are offsetting part of the merchandise-margin improvement. Adjusted SG&A expense increased by 0.2 percentage points because of higher store wage and payroll costs.
• Currency can affect reported international growth. Foreign exchange reduced consolidated Q2 sales growth by one percentage point, even though it added $0.01 to EPS.

Summary

TJX’s Q2 FY2027 results combined 4% comparable-sales growth with underlying margin expansion, although tariff refunds materially increased reported profit and EPS. HomeGoods, Canada, and International compensated for slower Marmaxx performance, while operating cash flow remained substantial. The main items to monitor are whether Marmaxx’s early third-quarter improvement continues, whether wage costs limit further margin gains, and how much of the expected tariff-refund benefit is ultimately realized.

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