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TJX (TJX) is modestly lower following its Q4 (Jan) results this morning. The off-price retailer continued its streak of EPS beats, while revenue increased 8.5% yr/yr to $17.74 bln, also better than expected and marking its strongest growth in 2 years. Guidance was somewhat cautious, however, with both Q1 and full-year EPS and revenue guidance coming in below expectations, including EPS of $0.97-0.99 and $4.93-5.02, respectively, on revenue of $13.80-13.90 bln and $62.70-63.30 bln.

• Comp sales increased 5% in Q4 (flat with Q3), well above guidance of +2-3% and on top of +5% last year, driven by both a higher average basket and an increase in customer transactions.
• Management noted that quarterly comp trends were running higher before winter storms late in the quarter, but sales picked back up after the storms passed.
• TJX Canada led with a +7% comp in Q4 (+8% in Q3), while Marmaxx increased +5% (+6% in Q3); HomeGoods and TJX International accelerated to 6% and 4%, respectively (from +5% and +3% in Q3).
• Strength was broad-based across regions and income cohorts. Encouragingly, U.S. comps were similar above and below $100K household income, and TJX said value perception improved over the last six months.
• Q4 adj. pre-tax margin increased 60 bps to 12.2% and adj. gross margin increased 60 bps to 31.1%, driven by a higher merchandise margin, sales leverage, and lower shrink.
• TJX is still assessing the evolving tariff backdrop, but FY27 guidance assumes it can offset tariff pressure. Meanwhile, shrink is now essentially back to pre-COVID levels. It expects steady to modest margin expansion in FY27 and guided for +2-3% comps in both Q1 and FY27.
• TJX also raised its dividend 13% and authorized an additional $3 bln stock repurchase program, and expects to buy back approximately $2.50-2.75 bln of stock in FY27.

Briefing.com Analyst Insight

This was a strong holiday quarter from TJX, with comp sales coming in nicely above guidance and broad strength across its banners. TJX's value offering continues to resonate, and management's commentary around U.S. comps being similar above and below $100K household income underscores the brand's broad appeal across consumer cohorts. The company also continues to see a long runway for growth through additional store openings and international expansion. Another positive was the 13% dividend increase and expanded buyback authorization. The muted reaction likely reflects the cautious FY27 outlook, which came in below expectations. That said, TJX is often conservative with guidance, and management sounded particularly upbeat on consumer demand, merchandise availability, and value perception. With shares near all-time highs, investors will likely want to see TJX prove the outlook is conservative and continue outperforming against its targets.