Will TJX's 4% Comp Sales Growth Power Full-Year Earnings Upside?

The TJX Companies, Inc. (TJX) delivered an impressive consolidated comparable store sales increase of 4% in the second quarter of fiscal 2026, a performance that surpassed its internal projections and was a key factor in the updated full-year outlook. The momentum was broad-based, with customer transactions increasing across all divisions, a clear indicator of the enduring appeal of its value-oriented proposition.

The strength was notable across all key business segments, providing the foundation for the company's raised guidance. Marmaxx (U.S.) saw comparable sales growth of 3%, driven by both an increase in customer transactions and a higher average basket size. HomeGoods (U.S.) grew comparable sales by a very strong 5%, with strength across both the HomeGoods and HomeSense banners. International performance was equally notable. TJX Canada reported an exceptional 9% comp sales increase, while TJX International achieved a solid 5% gain, fueled by strong results in Europe and outstanding growth in Australia.

The above comparable store sales growth has positioned TJX to flow through the benefits to its bottom line, leading management to raise the full-year guidance for both pretax profit margin and earnings per share (EPS). At its second-quarter fiscal 2026 earnings release, management raised the full-year EPS view to the range of $4.52 to $4.57 compared with the prior guidance of $4.34 to $4.43.

The raised guidance represents a 6% to 7% increase from the year-ago period figure of $4.26. This upward revision in the projection underscores the direct link between the strong sales performance and the company’s confidence in its ability to drive profitability for the remainder of the year.

How TJX Stacks Up Against COST and BURL

Costco Wholesale Corporation (COST) reported total company comparable sales growth of 5.7%, or 8% when adjusted for gasoline prices and foreign exchange, in the third quarter of fiscal 2025. U.S. comparable sales rose 6.6% (7.9% adjusted), supported by 5.5% traffic growth in the U.S. Costco Wholesale emphasized member loyalty, value pricing and expanded Kirkland Signature penetration. Additionally, flexible sourcing strategies helped Costco manage tariff pressures while reinforcing its competitive advantage in warehouse retail.

Burlington Stores, Inc. (BURL) delivered a 5% comparable sales increase in the second quarter of fiscal 2025, building on 5% growth in the prior year. It raised the full-year EPS guidance, reflecting margin expansion and cost leverage, though Burlington maintained cautious comp guidance of 0-2% for the second half. Burlington continues to execute its Burlington 2.0 strategy, focusing on merchandising flexibility, sourcing adjustments and store refreshes to sustain traffic and comp momentum.

TJX’s Price Performance, Valuation and Estimates

Shares of The TJX Companies have gained 4.8% in the past month against the industry’s decline of 1.3%.

From a valuation standpoint, TJX trades at a forward price-to-earnings ratio of 28.74X, down from the industry’s average of 30.63X.

The Zacks Consensus Estimate for TJX’s fiscal 2026 and 2027 earnings implies year-over-year growth of 7% and 10.3%, respectively.

TJX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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