Is TJX's Q4 Comps Guidance Too Conservative Given Recent Momentum?

The TJX Companies, Inc.’s (TJX) fourth-quarter fiscal 2026 comparable sales guidance appears cautious relative to the momentum exiting the fiscal third quarter. On its fiscal third-quarter 2026 earnings call, management guided for fourth-quarter comparable sales growth of 2% to 3%, which implies a deceleration from the 5% increase delivered in the fiscal third quarter and comes in below the 5% comparable sales growth reported in the fourth quarter of fiscal 2025.

In the third quarter, TJX delivered results that exceeded its plan, supported primarily by strong customer traffic and steady demand for branded merchandise at attractive prices. Management pointed to broad-based shopper engagement across regions and income groups, driven by frequent store visits and a consistent flow of fresh assortments. The company also entered the fourth quarter with inventory levels it described as well-positioned, supported by strong availability of branded merchandise for the holiday season.

Even with these supportive operating conditions, the fourth-quarter comparable store sales outlook reflects a conservative posture. Management indicated that the guidance reflects caution around the holiday environment and the impact of last year’s stronger fourth-quarter performance, while noting that the quarter was off to a solid start.

Overall, the fiscal fourth quarter comparable sales range reflects a measured approach to guidance-setting. The outlook incorporates recent momentum while accounting for tougher comparisons and uncertainty around holiday sales patterns, resulting in expectations that remain cautious but balanced.

TJX Peer Comparison: Q4 Comps Outlooks at BURL and DLTR

Burlington Stores, Inc. (BURL) posted modest third-quarter fiscal 2025 performance, with comparable store sales increasing 1%, reflecting uneven demand patterns during the quarter. For the fourth quarter, Burlington Stores guided to comparable sales growth of 0% to 2%. This outlook reflects Burlington Stores’ measured approach to setting expectations amid a dynamic operating environment.

Dollar Tree, Inc. (DLTR) delivered solid third-quarter of fiscal 2025 momentum, with comparable store sales rising 4.2%, driven primarily by higher ticket from its expanding multi-price strategy. For the fourth quarter, Dollar Tree guided to comparable sales growth of 4% to 6%. This outlook reflects Dollar Tree’s measured approach to setting expectations for the upcoming quarter.

TJX’s Price Performance, Valuation and Estimates

Shares of The TJX Companies have gained 4% in the past month compared with the industry’s growth of 0.9%.

From a valuation standpoint, TJX trades at a forward price-to-earnings ratio of 31.05X, up from the industry’s average of 29.91X.

The Zacks Consensus Estimate for The TJX Companies’ fiscal 2026 and 2027 EPS has moved down 1 cent each to $4.66 and $5.10, respectively, over the past 30 days.

TJX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research