TJX

With Five Below, Inc. FIVE set to announce its second-quarter fiscal 2026 earnings results on Sept. 2, after the market closes, investors face a critical question: Can FIVE continue its streak of surprising results, or will challenges temper growth?The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.22 billion, implying an 18.4% increase from the year-ago reported figure. Meanwhile, the consensus estimate for earnings has risen by a couple of cents over the past seven days to $1.34 per share. The estimate indicates year-over-year earnings growth of 65.4%.Five Below has a trailing four-quarter earnings surprise of 70.1%, on average. In the last reported quarter, this Philadelphia, PA-based company surpassed the Zacks Consensus Estimate by 30.6%. Image Source: Zacks Investment Research As investors prepare for Five Below’s second-quarter results, the question looms regarding an earnings beat or miss. Our proven model predicts that an earnings beat is likely for Five Below this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.Five Below has a Zacks Rank #2 and an Earnings ESP of +5.51%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote Five Below’s second-quarter performance is likely to have benefited from continued traction in its customer-centric merchandising strategy. The company has shifted from an item-led approach toward broader assortment storytelling, with an emphasis on frequent newness, trend-right products and compelling value. The broad-based merchandise momentum across categories, including toys and collectibles, beauty, fashion, food and candy, might have provided Five Below with multiple avenues to sustain customer engagement. The integration of Five Beyond merchandise into relevant product “worlds,” along with simplified pricing and stronger in-stock execution, also appears to have made stores easier to shop and helped reinforce the value proposition.Building on that merchandising foundation, Five Below’s increasingly social-first marketing approach is likely to have supported customer engagement and store traffic during the quarter. The company has become more active in social listening, creator content and trend amplification, allowing it to identify emerging interests and quickly connect those trends with merchandise and in-store experiences. Five Below has also been emphasizing the quality of new locations and site selection, witnessing strong productivity. Distribution-center efficiencies, better in-stock levels and continued investments in the store experience are likely to have complemented the contribution from new locations.However, a cautious consumer environment, persistent inflation and higher fuel costs may have weighed on second-quarter performance. Elevated transportation costs, along with increased marketing spending and higher store labor expenses, could also have pressured profitability. Five Below, which competes with value-oriented retailers such as Burlington Stores, Inc. BURL and The TJX Companies, Inc. TJX, has seen its share price jump 12% over the past three months against the industry’s decline of 0.6%. Shares of Burlington Stores and TJX Companies have declined 19.1% and 12.8%, respectively. Image Source: Zacks Investment Research Five Below’s valuation remains elevated relative to the industry. FIVE currently trades at a forward 12-month price-to-earnings (P/E) multiple of 25.57, a notable premium to the industry average of 15.25. However, the stock is trading below its 12-month median P/E multiple of 28.17. FIVE commands a premium to some of its close peers. Burlington Stores trades at a forward 12-month P/E multiple of 19.66, while TJX Companies carries a multiple of 24.30. Image Source: Zacks Investment Research Five Below appears well positioned heading into its second-quarter earnings release, supported by healthy merchandising momentum, stronger customer engagement, effective social-first marketing and solid new-store execution. The earnings setup also looks favorable, improving the chances of a positive surprise. 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 Five Below, Inc. (FIVE) : Free Stock Analysis Report The TJX Companies, Inc. (TJX) : Free Stock Analysis Report Burlington Stores, Inc. (BURL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

TJX Companies has delivered strong share price gains over the past five years, yet the current valuation checks point to a stock that appears expensive on an intrinsic value basis while trading around fair on earnings-style multiples. Recent short-term share price weakness adds another consideration for investors who are weighing what they are paying today against what the current fundamentals can reasonably support. Over the past 5 years, TJX Companies has returned about 104.4%, which places recent share price softness in the context of a much stronger longer-term run. The company’s off-price retail model can support interest in its cash flow potential, while any pressure on consumer spending or store-level profitability may limit how much value investors are willing to ascribe to those future cash flows. The broader valuation checks show TJX Companies as not a clear bargain overall, with only 1 of 6 tests screening as attractive on value value score: 1. The key question now is whether the recent pullback in TJX Companies is enough to make the current share price line up more comfortably with the intrinsic value estimate and the broader valuation signals. Spot potential alternatives to TJX Companies by scanning a curated list of 44 high quality undervalued stocks that more closely match your value and quality checklist. The Discounted Cash Flow (DCF) model takes TJX Companies’ projected cash flows and discounts them back to today. The latest twelve month free cash flow is about $5.9b, and the model assumes a growing but relatively steady cash flow profile from here rather than a sharp acceleration or drop off. On these cash flows, the DCF points to an estimated intrinsic value of about $102.75 per share. That is below the current share price, which implies the market is paying a premium to the cash flow estimate and aligns with the model’s view that the stock is about 31.5% overvalued on an intrinsic basis. Based on this DCF workup, TJX Companies stock currently screens as overvalued relative to its modeled cash flows. Our Discounted Cash Flow (DCF) analysis suggests TJX Companies may be overvalued by 31.5%. Discover 44 high quality undervalued stocks or create your own screener to find better value opportunities. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for TJX Companies. The P/E ratio is a useful cross check for TJX Companies because earnings are a key focus for many retail investors and analysts. TJX currently trades at a P/E of about 24.6x, which is higher than the Specialty Retail industry average of about 18.5x and also above the peer average of roughly 22.9x. A more tailored fair P/E ratio for TJX Companies, which factors in the company’s profile within the sector, is about 22.6x. That is modestly below the current market multiple, so the stock carries a premium to this benchmark but not an extreme one. For investors, this indicates a valuation that is neither clearly cheap nor aggressively priced on earnings alone, particularly when considered alongside the earlier cash flow work. On the P/E measure, TJX Companies appears roughly fairly valued with only a small premium to what the model suggests as a fair earnings multiple. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for TJX Companies pick up where the earlier valuation checks leave off by explaining which specific paths for TJX Companies' revenue, margins and earnings would need to occur for the stock to be worth materially more or materially less than today's price. Where a single ratio or model offers one point estimate, Narratives unpack the future behind that figure so you can later compare it with actual results on Simply Wall St's Community page. One of the top community narratives on TJX Companies: 22% undervalued Read one of the top narratives on TJX Companies Do you think there's more to the story for TJX Companies? Head over to our Community to see what others are saying! TJX Companies looks overvalued on a Discounted Cash Flow (DCF) basis, while the P/E work suggests the stock is priced about right relative to sector peers. That gap reflects a market that is comfortable paying up for earnings today, even though the modeled cash flows point to less upside on an intrinsic value view. With the broader valuation checks screening as weak, the key question is whether TJX Companies can keep earnings and cash generation aligned well enough to justify this premium. The crux for both bulls and bears is how resilient margins and store economics prove to be from here. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TJX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Walmart Inc. (NASDAQ:WMT) disappointing sales and The Home Depot, Inc. (NYSE:HD) strength among budget-conscious do-it-yourselfers indicate middle-class consumers are growing more tight-fisted, Reuters reported, even as wealthier shoppers keep supporting luxury brands like Ralph Lauren. Walmart's fiscal second-quarter comparable sales grew 3.4% excluding the impact of pharmacy-related items, while Walmart, TJ Maxx owner TJX, and Home Depot all warned shoppers remain "selective" as U.S. retail sales in July posted their first monthly decline in nine months. Basket sizes shrank at Walmart and Target as shoppers continued visiting stores but spent less per trip. IG Group analyst Angeline Ong said, "Even Walmart, which has been supported by more affluent households trading down, isn't able to keep average spending growth rising." Walmart Inc. (NASDAQ:WMT)'s sales growth, while decelerating, is still positive and reflects genuine trade-down demand. Comparable sales grew 3.4% even as growth cooled. Ong's comment that more affluent households are trading down to Walmart points to Walmart gaining a customer segment it did not previously serve as heavily, a structural tailwind even during a broader spending slowdown. The Home Depot, Inc. (NYSE:HD) is benefiting directly from consumers' shift toward smaller, more deliberate purchases rather than losing out to it. Home Depot's strength is among budget-conscious do-it-yourselfers. It suggests homeowners are substituting professional contractor work with DIY projects to save money, a behavior shift that funnels spending toward Home Depot's core business rather than away from it. Consumers are not retreating from spending altogether, only becoming more selective about where it goes, which favors well-positioned retailers over the category as a whole. eToro's Lale Akoner said households are "becoming much more deliberate about where their money goes," not cutting spending broadly, meaning retailers that consistently deliver value, as Walmart and Home Depot have positioned themselves to do, are better placed to capture that more deliberate spending than competitors relying on broad discounting alone. Shrinking basket sizes point to a demand problem that price cuts alone are not solving. Shoppers continued visiting Walmart and Target but spent less per trip, and McDonald's discounted menu items failed to draw customers this quarter even in an otherwise expensive menu, according to Reuters, evidence that promotional pricing is losing its power to offset consumers' underlying caution. Walmart Inc. (NASDAQ:WMT)'s growth deceleration is happening despite, not because of, favorable positioning. Even with more affluent households trading down to Walmart, a dynamic that should be adding incremental sales, the company still could not sustain rising average spending growth. It shows the pressure on household budgets is broad enough to offset even Walmart's trade-down tailwind. The Home Depot, Inc. (NYSE:HD)'s strength is linked to a specific, cautious consumer behavior, DIY substitution, that shows broader economic pullback rather than confidence. Consumers choosing to do home projects themselves instead of hiring professionals is typically a sign of tightened discretionary budgets. It means Home Depot's current strength may show the same underlying consumer caution pressuring Walmart, just channeled into a different purchase decision. Both retailers are operating in the same cautious consumer environment, but the read on each differs. Walmart gains when wealthier households trade down to cut costs, while Home Depot wins when shoppers switch to do-it-yourself projects. However, slowing growth at both stores shows that broader budget pressures force Americans to spend far more selectively. While we acknowledge the potential of WMT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Warren Buffett "Blew It" on Alphabet (GOOGL) And Made It Berkshire's Third-Biggest Bet and Sony Group (SONY) and Taiwan Semiconductor (TSM) Are Betting $4.7 Billion on the "Eyes" of AI Machines. Disclosure: None. This article is originally published at Insider Monkey.

Image source: The Motley Fool. Wednesday, Aug. 19, 2026 at 11:00 a.m. ET Chief Executive Officer and President - Ernie L. Herrman Global Communications - Debra McConnell John Klinger Operator: Ladies and gentlemen, thank you for standing by. Welcome to The TJX Company's Second Quarter Fiscal 27 Financial Results Conference Call. At this time, participants are in a listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, you will need to press 1. As a reminder, this conference call is being recorded 08/19/2026. I would like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of The TJX Companies. Please go ahead, sir. Ernie L. Herrman: Thanks, Courtney. Before we begin, Debra has some opening comments. Debra McConnell: Thank you, Ernie, and good morning. Today's call is being recorded and includes forward-looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause the actual results to vary materially from these statements, including, among others, the factors identified in our filings with the SEC. Please review our press release for a cautionary statement regarding forward-looking statements as well as the full safe harbor statements included in the section of our website, tjx.com. We have also detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and in the Investors section of tjx.com along with reconciliations to non GAAP measures we discuss. Thank you. And now I will turn it back over to Ernie. Ernie L. Herrman: Good morning. Joining me and Debra on the call on the call is John. I want to begin by thanking our talented associates for their continued dedication to TJX and their commitment to delivering great value and an exciting treasure hunt shopping experience to our shoppers every day. Now to our second quarter results. Overall comparable sales increased 4%, which was above our plan. Our second quarter comp performance highlights the benefit of our global diversified business. While sales at our Marmaxx division were below our expectations, our 3 other divisions delivered comp sales increases of 6% to 7% which drove results that exceeded the high end of our plan. At Marmaxx, we believe we could have executed our store mix better. And by that, I mean, we could have been sharper having the right goods in the right stores at the right time. We are convinced that the issues were self inflicted and within our control. And we have made good progress working through them. We are seeing improvement at Marmaxx to start the third quarter and are confident that we will see greater improvement by the holiday selling season. As to second quarter profitability, I am very pleased that once again profits were well above our plan. Given this, we are raising our full year outlook for pretax profit margin and earnings per share. John will give some more detail about our second quarter results and guidance in a moment. As we look to the second half of the year, we are laser focused on driving the opportunities that we see for the business. The third quarter is off to a strong start. And availability of merchandise continues to be outstanding. We believe we have the right initiatives in place to drive sales and customer traffic to all of our retail banners. And I am confident we will execute on our plans. Longer term, we continue to see a long runway for growth ahead for TJX. We are excited about the continued potential we see to keep growing sales to keep expanding our global footprint and to keep capturing additional market share around the world for many years to come. Now I will turn the call over to John to cover our second quarter results in more detail. John Klinger: Thanks, Ernie. I also want to add my gratitude to all of our global associates for their continued hard work and commitment to TJX. As I recap our second quarter results, I am going to speak to everything on an adjusted basis, which excludes the impact from the tariff refunds received as of the end of the second quarter and the related incremental compensation expense accruals. Reconciliations detailing the net impact of these items on our results can be found in today's press release and on the Investors section of our website. Now to show some additional details on the second quarter versus last year. As Ernie mentioned, our second quarter consolidated comp sales increased 4%, which was above our plan. Our second quarter comp was driven by a higher average basket and an increase in customer transactions. Further, our home categories out outperformed our apparel categories. Adjusted pretax profit margin was 11.9%, up 50 basis points versus last year and well above our plan. Adjusted gross margin was 31.4%, up 70 basis points versus last year and driven by an increase in merchandise margin, mostly due to tariff favorability. Adjusted SG&A was 19.7%, unfavorable by 20 basis points versus last year and driven by incremental store wage and payroll costs. Net interest income was neutral to pretax profit margin versus last year. Adjusted diluted earnings per share were $1.22, up 11% versus last year and well above our plan. Second quarter adjusted pretax profit margin and adjusted diluted earnings per share significantly exceeded our plan, primarily due to operational expense efficiencies, a higher merchandise margin and expense leverage on better sales, partially offset by contributions to TJX's charitable foundations. Now to our second quarter divisional performance. At Marmaxx, comp sales increased 1% and were entirely driven by a higher average basket, partially offset by a small decrease in customer transactions. While sales were lower than we would have liked, comp sales increased across all region and income demographic bands. Adjusted segment profit was 14.2%, flat versus last year. We delivered another good quarter of sales performance at our Sierra stores, and we continue to grow this chain across The U.S at our U. S. E commerce sites, we continued to add new brands to deliver even more freshness for our online shoppers. We are excited about the initiatives we have planned for our TJ Maxx, Marshalls, and Sierra banners this fall in the holiday season. Long term, we are confident in the market share opportunities we see for our largest division. HomeGoods delivered an outstanding 7% comp sales increase primarily driven by higher average basket and customer transactions were also up. We are very pleased to see strength at both our HomeGoods and HomeSense banners across all regions and income demographic bands. Adjusted segment profit margin was 12.4%, up 240 basis points. Our HomeGoods and HomeSense banners offer customers a highly differentiated mix of home fashions from around the world at compelling values. We are the largest off price home fashion retailer in the U.S. and believe that we are set up very well to continue to capture an even larger share of the market going forward. At TJX Canada, comp sales were excellent, increasing by 6%. The comp was primarily driven by an increase in customer transactions. Adjusted segment profit margin on a constant currency basis was 16.3%, up 30 basis points. We are the leading off price retailer in Canada and are very pleased with our strong brand awareness and loyal shopper base. We continue to see an opportunity to further grow across Canada with our 3 retail banners. At TJX International, comp sales increased an outstanding 7%. This comp was also primarily driven by an increase in customer transactions. We were extremely pleased with the strong consistent sales performance in Europe and excellent sales in Australia. Adjusted segment profit margin on a constant currency basis was 7.3%, up 210 basis points. During the quarter, we opened our 2nd TK Maxx store in Spain and again customer response was extremely positive. We are excited about our growth plans for our international division and have great confidence that we can attract even more shoppers in Europe and Australia over the long term. Moving to inventory. Second quarter balance sheet inventory was up 7% and inventory on a per store basis was up 2%. We feel great about our inventory levels and our convinced that we are well positioned to take advantage of the plentiful buying opportunities in the marketplace. As to our capital allocation, we continue to reinvest in the growth of our business while returning $1.3 billion to shareholders through our buyback and dividend programs in the second quarter. Now I will turn it back to Ernie. Ernie L. Herrman: Thanks, John. I would like to start by highlighting the opportunities we see that give us confidence that we can drive sales and traffic in the second half of the year. First, we are confident that consumers will continue to look for value in the current environment. We believe we have a large and deeply passionate customer base strong brand perceptions and an offering that resonates across many age and income brackets. We are convinced that we remain a very attractive option for shoppers who want great brands and fashions at excellent value. And believe they will seek out our retail banners this fall and holiday season. Second, we are excited about the product category initiatives that we have planned. We have become a year round gifting destination, and feel particularly good about our initiatives in this area. This strategy has worked well for us, and we believe it helps us stay top of mind for consumers. All of this gives us confidence that our exciting ever changing merchandising mix can inspire our shoppers and encourage more frequent visits. to our stores. Third, product availability continues to be off the charts across all categories and from a wide range of brands. Further, there continues to be more availability in the marketplace than we could ever buy. I am convinced that our team of more than 1.4 thousand buyers will bring shoppers the right assortments at the right values. Lastly, we are excited about the marketing we have planned for fall and holiday season. We will continue to follow consumer viewing habits, by employing a variety of channels with a strong emphasis on digital and social media. Our campaigns will continue to reinforce our value leadership with insightful and entertaining creative content that connects with shoppers across a wide range of age and income shopper demographics. We believe that our thoughtful, integrated marketing approach will help us attract new customers and keep us top of mind with our existing shoppers. Beyond this year, I am confident that TJX has significant opportunities to capture additional market share over the long term. I will briefly cover the key characteristics of our business that give us confidence. First is our reputation as a trusted value leader in The United States, Canada, Europe and Australia. We believe this is a tremendous advantage and our top priority remains offering great value every day to our customers. Second, we are a global sourcing machine We work with the universe of approximately 21 thousand vendors every year. To curate an unmatched mix of good better, best merchandise for our customers. Third, we are convinced that we have some of the strongest vendor relationships in retail. We have decades long relationships with many of our vendors, both domestically and internationally. Further, we believe vendors love to work with us as we are in the market buying consistently throughout the year, we can introduce their brand to new consumers and we offer them a very attractive way to grow their business. Next, we attract shoppers across a wide range of income and age demographics. In the United States, Canada, Europe and Australia. With our proprietary planning and allocation systems and expertise, we can create a differentiated treasure hunt shopping experience that appeals to a broad range of shoppers across each of our markets. Yet, many aspects of our business are driven by flexibility which we see as a key advantage. This includes our buying, our store formats and our supply chain and systems. Next, we continue to see tremendous opportunity to significantly grow our store base around the world. Today, we are increasing our long term store growth potential by 500 stores to a total of 7.5 thousand stores, or over 2.2 thousand more stores. With just our existing retail banners within our current 10 countries. This now reflects the long term potential for our TJ Maxx and Marshalls banners to expand an additional 300 stores to a combined 3.3 thousand stores And for the home goods division, expand an additional 200 stores to 2,000 stores. Further, we are planning to accelerate our store openings to 4% starting next year to take advantage of the growth opportunities we see out there. I want to assure you that we are extremely confident that there will be plenty of quality merchandise available to us to support our growth plans. Last and most importantly, is our exceptional talent around the world. I truly believe that the depth of our off price knowledge and expertise and the longevity of our talent within TJX is unmatched. Talent development has always been a priority, and we remain laser focused on teaching and training the next generation of TJX leaders. Also, I am very proud of our culture and believe that it will be a tremendous advantage as we continue our growth around the world. I am convinced that the combination of all these core strengths of our business set us apart from many other major retailers. Further, I believe these have allowed us to successfully navigate many different kinds of retail and macro environments over our nearly 50 years as a company. And I am confident they will continue to benefit us. Summing up, we are pleased with the overall performance of TJX in the second quarter. Again, our above plan results demonstrate the power and benefits of our global diversified business. I want to reiterate that at Marmaxx, we have seen a sales improvement to start the third quarter and are confident we will see greater improvement by the holiday selling season. The third quarter is off to a strong start and we believe we are strongly positioned in today's consumer environment. We are excited about the initiatives we have planned for the remainder of the year. Importantly, over the near and long term, we plan to continue to play offense in our approach to marketing, merchandising the in store shopping experience, global store growth and our investment in talent. I am convinced that TJX is set up extremely well to capitalize on the growth opportunities that we see around the world from many years to come. Now I will turn the call back to John to cover our guidance then we will open it up for questions. John Klinger: Thanks again, Ernie. As I recap our guidance for the remainder of the year, I am going to speak to everything on an adjusted basis which excludes the benefit from tariff refunds that we received in the second quarter and expect to receive in the third quarter. Our adjusted guidance also excludes incremental compensation expense accruals related to the tariff refunds for the second, third and fourth quarter. Again, reconciliations can be found on the Investors section of our website. Starting with the third quarter, are planning overall comp sales to be up 2% to 3%, consolidated sales to be in the range of $15.6 billion to $15.8 billion up 3% to 5% versus last year Adjusted pretax profit margin to be in the range of 12.3% to 12.4%, down 30 to 40 basis points versus last year's 12.7%. Adjusted gross margin to be in the range of 32.1% to 32.2%, which would be down 40 to 50 basis points versus last year's 32.6%. This would be primarily driven by higher fuel costs. Adjusted SG&A to be 20%, 10 basis points favorable versus last year's 20.1%. Assuming net interest income of $28 million, which we expect will be neutral to our third quarter pretax profit margin versus last year. This assumes that we will pay off the $1 billion note maturing in September. Our third quarter guidance assumes a tax rate of 24.6%, and a weighted average share count of approximately 1.11 billion shares. As a result of these assumptions, we are expecting third quarter adjusted diluted earnings per share to be in the range of $1.30 to $1.32, up 2% to 3% versus last year's $1.28. Moving to the full year. We continue to expect overall comp sales growth of 3% to 4%. We expect full year consolidated sales to be in the range of $63.4 billion to $63.8 billion up 5% to 6% versus last year. We are increasing our full year adjusted pretax profit margin guidance to be in the range of 12% to 12.1%, up 30 to 40 basis points versus last year's adjusted 11.7%. We now expect full year adjusted gross margin to be in the range of 31.2% to 31.3%, up 20 to 30 basis points versus last year's adjusted 31%. We now expect full year adjusted SG&A to be 19.5%, flat versus last year's adjusted 19.5%. We are assuming net interest income of about a $131 million, which we expect to be neutral to our full year pretax profit margin versus last year. Our full year guidance also assumes a tax rate of 24.6% and weighted average share count of approximately 1.12 billion shares. As a result of these assumptions, we are increasing our full year adjusted diluted earnings per share to be in the range of $5.15 to $5.20, up 9% to 10% versus last year's adjusted $4.73. Lastly, our implied guidance for the fourth quarter assumes no further tax refunds and excludes the incremental expense accruals related to the third and fourth quarter tariff refunds. For the fourth quarter, we are expecting overall comp sales to be up 2% to 3% adjusted pretax profit margin to be in the range of 11.9% to 12%, down 20 to 30 basis points versus last year's adjusted 12.2%. And adjusted diluted earnings per share to be in the range of $1.44 to $1.47, up 1% to 3% versus last year's $1.43. In closing, want to reiterate that we are excited about the growth and market share opportunities we see in the near and long term. We are in an excellent position to continue to invest in the growth of TJX while simultaneously returning significant cash to our shareholders. Thank you, and now we are happy to take your question. Operator: Thank you. Our first question comes from Matthew Boss Your line is open. Matthew Boss: Great. Thanks. So 2 questions. Ernie, first, could you speak to the progression of same store sales at Marmaxx during the second quarter? Elaborate on the sales improvement that you cited in August at Marmaxx and drivers of the strong start to the third quarter. And then, John, could you talk to the recent new store performance metric that you have seen and just the opportunity you see today to raise your store target? John Klinger: Sure. Okay, Matthew. I think, John, you want to I mean, I will start with the quarter and then I will take over. So across the board, we came out stronger in May. And then we saw consistent sales in June and July. Pretty much across the board. Ernie L. Herrman: And then, Matthew, on, I think you are referring to talking about the strong start to the quarter and what we are seeing there. Yes, across all of the businesses, And we mentioned the, you know, 1 of the strengths that you see here, and, obviously, there is a concern about the Marmaxx comp that we had as well. But I think what we exemplified here on this quarter is the ability to be consistent by having all of our other businesses outperform and significantly from Canada to Europe to HomeGoods, and then, you know, Marmaxx underperforming due to some execution issues. I would tell you all of them. I like the way we are trending with all of them starting off this, Q3 in August. Marmaxx, we are seeing improvement from where we were trending before. And then I am really looking for Marmaxx, as we move ahead, to see more significant improvement as we get to fourth quarter. But I think you are asking about the overall strong start across the board And then to answer your second question, so we look at this, obviously, very frequently, our store potential. John Klinger: And we have been seeing for, you know, for a bit of time that we had some opportunity in Marmaxx and HomeGoods to continue to grow our store base. So we took the opportunity this quarter to increase Marmaxx by 300 stores HomeGoods by 200 stores. And, again, for Marmaxx, we are seeing opportunities in rural markets where we see department stores are closing. We are seeing the opportunity as the store, as we have experienced strong comp growth for so many quarters that we are seeing the ability to put stores closer together than we thought before. And then the small format store that allows us to expand in a lot of densely populated urban areas as well. And so we have been seeing the opportunities to increase our store growth potential and the annual growth from what we were saying before, a 3% unit growth to 4% growth based on the availability that we are seeing pretty much across the board. And so when we look at where we see the opportunities, we see it across every single brand that we have. Yeah. Ernie L. Herrman: So we are, to John's point, Matthew, we are seeing that additional 1% store growth across the board also. that is not just a 1 division or 2 division driving that. Yeah. The other thing I think the teams have done a good job is getting more flexible in our approach to these smaller formats. Looking at what John's talking about is our teams, whether it is planning and allocation that ships the goods to the stores, and our real estate division, which designs and constructs the stores, finds the locations, We are getting more flexible based on population density, etcetera, in some of these locations, as John mentioned. Which I think is also opening up opportunity. Right. John Klinger: And then just to, you know, I know you asked this, and I did not answer it. The performance of our new stores, for a long time. We have been exceeding our expectations on our new store openings for quite a while. And so we see no concern there either. Matthew Boss: it is great color. Best of luck. Operator: Thank you. Our next question comes from Lorraine Hutchinson. Your line is open. Lorraine Hutchinson: Thank you. Good morning. Just wanted to get a little more insight on things. I was hoping to get a little more insight on what went wrong at Marmaxx. The steps you have taken to fix it. Yep. And then how quickly do you think you will be back to a more normal 2% to 3% comp cadence at Marmaxx specifically? Ernie L. Herrman: Yeah. Great question, Lorraine. Obviously, this is 1 that we thought would be important to discuss on the call, which is why we had it in the script as well. where, well, without giving specifics to the families of business, which you know, we can never do that, if you go back, you have covered us for a while, you know, even a number of years ago. We had execution issues. We did not give the areas specifically because of competitive reasons. However, what we can say is we have identified it was pretty obvious to which areas they are in, where we did not have I would say, the right mix, merchandise mix. In TJ Maxx and in Marshalls. And it was really entirely self-inflicted and within our control. To the point that I have been involved and all teams have been involved in those areas, which involves the merchants, buyers, merchandise managers, GMMs, senior merchants. Our planning and allocation teams were involved. In identifying the execution issues, I mean, all the way from, all the way from, you know, the buyers and planning all the way up to me. Everyone's involved. We have identified them. And I think we are well on our way to fixing the issues. I think, you know, from our past that when we focus on a missed execution issue, we are able to fix it pretty readily. I would say when and you started to hint that in your question, what type of timing gets us back to the 2% to 3%. I would say we are seeing a trend improvement already in August versus in Q2. I am most confident that we will be seeing what you are talking about by Q4. And I think a transition toward that over the next couple of. I hate to lock myself in on an exact number right now. But, we are feeling really good about it. Again, everyone is involved. We know exactly where we fell down. I would tell you it had nothing to do with if there is any question on did this have to do with any competition out there of any sorts? It had nothing to do with that. We have measured, we have actually gone out and measured where our stores are versus direct off price competitors, and our comps are actually at pretty much identical to wherever direct off price competitors are near us versus away from us. Our stores are comping identically. So which, by the way, the good and the bad of that is it tells us it is our own execution. So I guess, you know, in the past, we, I always talk to the teams it is really, always up to us generally when we have had a tough business. So I go back to on a much larger scale, John and I talk about this always, when you go back to Europe, a number of years ago, as you know, we were we did not have strong execution there. In fact, we put in a objective of sales and getting to a more profitable bottom line that took it took a little longer than this will take by far. But that was something we identified execution issues there, and we fixed it on a large scale total business situation. So, hopefully, that answers your question, but, you know, obviously, a very pertinent question. Thanks, Ernie. Paul Lejuez: Our next question comes from Paul Lejuez Hey, thanks guys. Just a clarification, I think you said May started stronger and then June, July was similar. Curious if June, July were both positive in this quarter to date. Is positive. And then on the small decline in transactions that you referenced, Ernie, on the Marmaxx side, curious if that was traffic driven or conversion. And if there is anything that might be a little off from a price point perspective, that might be impacting your conversion, maybe going a little bit too high. Curious if you could talk about that dynamic. John Klinger: Yeah. So just to clarify, I believe you are you are specifically asking about Marmaxx. Marmaxx started the quarter. Slightly stronger in May June and July were consistent. All 3 months were positive. Comps. Yep. Ernie L. Herrman: The, decline in transactions from what we can see, had nothing to do with conversion. And more to do in cases of where we did not have-- we had it was not a like item where retails went up and the value was not good, We have comp shopped aggressively. Our values are really the best around. Nobody is underselling us. And what it is, without giving specifics, it is more about what we did not have in the mix. And so, what that does is it you do not necessarily capture that sale. And it was not really an execution on what we had in the mix. So that would apply to, really, all of those handful of areas that I spoke about earlier. And so that is when you are just not you are not selling the customer when she's in. I guess you could say, if we had it would we have converted on the visit a little higher? Hard to measure that. But we know, again, what the problem was there. Yeah. Paul Lejuez: So are you just not having that it is more of a traffic issue that customers knew that the product was not there? Right? Ernie L. Herrman: No. Because, again, our traffic's driven off of every day. A lot of our traffic is word-of-mouth is just constant traffic. Right? We have a regular frequency of traffic. We do not do instant institutional price and item advertising. So and people know that we are a treasure hunt operate. Right? We are treasure hunt. So they know we are gonna sometimes have things or not have things. The issue is if we do not have some of these things that are kind of impulse driven, they are in the store, and maybe they would have picked it up anyway. They do not necessarily know we are gonna that is why we lost some. Then we did lose some on categories that were more basic. I cannot, again, I cannot give you what they are. For competitive reasons. Where we did not have the appropriate mix. I do not think the customer knew we did not have it but they probably came in and were not able to buy it. So Yeah. John Klinger: I mean, our transactions we quote our transactions through the register. Right. it is not footfall. We do not have we do not have people counters. Yeah. Yeah. Paul Lejuez: Alright. Got it. Okay. Ernie L. Herrman: Thank you, You are on, Paul, definitely the right I would be asking the same question. Thank you. Good luck. Operator: Thank you. Our next question comes from Brooke Roach Your line is open. Brooke Roach: Good morning, and thank you for taking our question. Ernie, a moment ago, you spoke to execution issues as more of a factor of what you did not have in the mix than what you did Your buyers typically have a very strong knowledge in knowing exactly what the customer wants and what categories and items are trending. What do you think led to this miss step on their knowledge of the pulse of the customer And what changes are you implementing in buying and allocation to be a little bit more consistent as you move into that important holiday season? Ernie L. Herrman: Yeah. So we have again, I cannot give you the, exact thing. We have instituted 2 more systematic changes. In planning. I cannot tell you what they are. But planning has a is putting in something that will help monitor the situation so that it does not happen to that degree. We are all again, remember, we are a bit of an art form secret sauce situation where things so rigid. Merchants are making their best calls at the time. And, you know, sometimes I like everyone to realize, you know, Marmaxx has quarter after quarter of really strong business And the last time maybe that we had something like this might have been about 8 years ago. So I wanna be careful on overreacting to what was a definitely a lack of execution in a handful of areas. Because, you know, this is something that can happen in a business that is a bit of an art form. And you look for certainly, closeouts in certain areas, and we plan a little bit ahead. And sometimes we do not put in place the right plans and the right combination of executing to those plans. So there is a lot of moving parts. You know, it is it is it is rare, but it can happen. So we put some basically systematic processes in place. Some of it in really is involved from the planning side, ironically, which is supposed to help the buyers. On this. And I think that is really gonna help mitigate this going forward. As well as, by the way, as I think I mentioned earlier, we had everyone involved on these discussions about these areas from buyers to MMs, to GMMs, to the president of Marmaxx, the head merchants in Marmaxx, myself, the senior ex executive vice president also mean, like, everyone has been involved. The heads of planning, etcetera. To get it institutionalized. So good question, Brooke. But I think I think we have it all kinda circled. Great. Thanks, Ernie. we. Operator: Our next question comes from Alex Straton. Your line is open. Alex Straton: Perfect. Maybe I will move on to another division here and then talk about HomeGoods. Could you maybe unpack that really strong comp result by traffic or ticket as well as the categories and whether you think it is sustainable for that business to continue doing high single digit comps into the back half? And similarly, just on this division as well, it is been delivering great substantial underlying margin expansion. Can you talk about what is driving that improvement? If there is any structural constraints as you think about that business potentially becoming a mid teens margin segment over time? Thanks a lot. Ernie L. Herrman: that is very good. Question, Alex, across the entire HomeGoods business. I like it. First of all, that team has been executing, as you as you said there when you asked the question, consistent for a while now and somewhat bucking the trend in the industry. Right? I think they, have been succeeding more, really over the last number of years at creating a level of excitement and impulse treasure hunt shopping across anything from, you know, domestic categories, which are really second to none in value. That we deliver anywhere from you could go to, you know, our kitchen department with gadgets to kitchen linens to, towels, sheets, giftware, gourmet food from Europe to, seasonal decor, wall decor, everything is hitting on all cylinders. They, and we have talked about this before. They are consumable business, items that get replenished You probably can guess what those categories are. This team has put in place something that I think is continuing to drive additional steady traffic because people are now aware not only all the impulse that, you know, everyone for years has written about in HomeGoods, they are getting day in, day out consumable staple product that they need to replenish on a regular basis. That is, that these teams have done an amazing job at that. I think the store execution also in terms of easing the ease of shopping, our store team's there. Have done an amazing job on the presentation. Within HomeGoods. it is such an easy store to shop. In what in some cases, is difficult categories to shop. And I think our store execution there is different. And I think our home merchants across the corporation I know you are asking about HomeGoods. Our home business across the corporation which is, again, is over a third of our business, over 35%, give or take now. Is healthy across the board. And I think that is because HomeGoods and a lot of the home merchants collaborate in a strong way. And what that has created is an even stronger diversity of mix throughout our home business and home goods and across the rest of the divisions in TJX. So I think, yeah, I think we have, way more opportunity as we move ahead By the way, admittedly helped by, I think, the execution of competition in home, around the board. In every country and specifically in The United States, competition there is just not, I would say, up to par and does not give you the fashion utilitarian approach of goods that we deliver in home goods. So we are we are as you can imagine and you mentioned the margin. I know John will probably talk to that briefly. But also part of the team, they are driving top line and margin expansion at a rate that is helping to move the needle, within TJX. And I know you are asking about HomeGoods. I just also have to mention, Canada has Carol and Europe are also sometimes they do not get in a lot of airtime, and I am only bringing it up because you are bringing up 1 of the other divisions. Those divisions, in Canada specifically is the size of getting close to the size of, HomeGoods. And those divisions, profit increases and sales increases Europe as well are continuing to just all those teams are executing at a very high level and taking market share in their geographies as is HomeGoods here domestically. John, I do not if you have Yeah. John Klinger: Just to expand a little bit on what Ernie was talking about there. Far as HomeGoods. You know, the biggest driver that Ernie mentioned was, again, the top line growth. I mean, we you know, a 7 comp is certainly gonna expand margin. We also had nice operational that we saw in the division. Then, of course, the largest item, which is the merchandise margin improvement, mainly driven by lower tariff costs Perfect. Thanks so much. Good luck. Operator: Thank Our next question comes from Michael Binetti. Your line is open. Michael Binetti: Hey, guys. Thanks for taking our questions. Let me ask with a quick 1 on the gross margin. I think with the strong start to the year before today, there is some potential for maybe upside to the gross margins that you guys are thinking about in the back half. Think you are more or less keeping the second half the same today for gross margin, maybe 10 basis points lower at the low end or something small like that. But can you maybe just walk us through the changes to the second half gross margin plan that net out to holding it flat? And maybe it is a boring question, but you added some freight and I would assume maybe there is some Marmaxx markdowns. It seems like maybe there potential for some new positives that we should be considering. John Klinger: Yeah. So, Michael, if I if I am comparing the first half to the second half, you know, the biggest piece is gonna be the fuel and the fuel the freight rates that we are seeing. So in the first half, we had favorability on our freight accruals that we excuse me. The freight mark to market of our hedges that we had out there. And, again, we have to mark to market those at every quarter. So the back half, we are seeing higher fuel rates comparatively speaking. Freight rates also due to due to what we are what the trucking companies are seeing, they are seeing less driver availability, which is driving up price. And so that is that is due to either younger kids that are not going into truck driving or a combination of that. And you know, some of the things that we have seen as far as foreign drivers, you know, leaving the country. And some of the pressure that we have seen there. Certainly, first half having a 5 comp in the first half versus guiding to a 2% to 3% in the back half is a piece of it. And then merchandise margin, you know, favorability in the first half that we saw. So when look at the institution of the IEPA tariffs, last year, there were goods that were placed before the tariffs were put in place, so we did not have an opportunity to negotiate those tariffs. So we are anniversarying that. And that is the exact opposite happened this year where the we had goods that had negotiated a tariff out, and then the tariff was it was eliminated before the goods were landed. So those are the 3 main things that differentiate the first half from the second half. Does that does that And then maybe Does that answer your question? Michael Binetti: Yeah. I guess what I think so. Is there was there any new positives versus where we were days ago as you think about the back half? John Klinger: I know you are doing front half and back half. I mean our front half and back half is, again, is very similar to what we had guided to underlying, guided to at the second quarter, which is why the $0.05 beat, we flowed the $0.05 on the full year. So we are well, obviously, there is puts and takes, but for the most part, we are consistent. Michael Binetti: Okay. And then if I could sneak 1 more in on profitability since you made me think about this here. I was pretty pleasantly surprised to see Marmaxx able to hold the segment margin at the 1 comp Is there if you just let us know for our models, is there any shift or any transitory benefits we should be mindful of in the second half? John Klinger: No. No. Nothing there. You know, we again, we have called this out in our in our prepared remarks. We did experience lower tariff costs in the second quarter. So I would say that, you know, what we what we put out there as far as our guidance is what we believe in, and we are gonna work hard to beat that guidance during the quarter. Michael Binetti: Okay, guys. Great to hear about the improvement in August. Thank you very, very much. Thanks. Operator: Thank you. Our next question comes from Jay Sole. Your line is open. Jay Sole: Great. Thank you. Ernie, I want to ask you about the 7.5 thousand long-term store target. Can you just tell us about Sierra? And also HomeSense? And maybe a little bit about Europe as well, how those fit into the plans. Then you I think you very specifically called out within your existing countries Why not sort of talk about maybe new potential countries that you know, the company might be going to over time? Thank you. Ernie L. Herrman: it is very good, Jay. Yeah. Well, first of all, let me talk to the last thing first, which is we typically well, I would say we are always looking at new countries, for potential as we did with, and it is not always the same structural deal. Right? But as you know, we went into Mexico, in our JV and then our investment in, Brands 4 Less. And Spain, which, John talked to, is doing really well. And I think, by the way, part of our new store upping is we are pretty bullish on new Spain openings down the road realizing that, the customer base is reacting even stronger than we anticipated there. John Klinger: that is not part of our that is not part of our no. Not even part of our numbers. Potential opportunity in the future. Yep. Ernie L. Herrman: Yep. The other 1 the other ones you are asking about is Sierra is, you know, disproportionate that adds disproportionately into the growth, right? it is a higher growth rate Yes. Than the 4% by far. And so is HomeSense. So, those are both well above 4%. Growth because they are both doing well. And we are always looking at new market potential, so you know, because we have shown, as witnessed by Australia, also, any new market we have gone into, if we have, brought the TJX secret sauce and TJX tenured associates to lead it. We have done very well. So, you know, again, I cannot say enough about what we are showing internationally. I am glad you are asking about this. What we are showing is the ability, I think we are better than ever at showing that we can grow our model wherever there is a market in an So as much as I cannot tell you what the next country is, you can be assured that we are looking. Yeah. Okay. Thank you so much. Yep. Operator: Thank you. Our next question comes from Marni Shapiro Hey, guys. Marni Shapiro: Hi, Marni. I am curious. Could we talk a little bit about some of the other categories at Marmaxx? I know you do not want to get into too many details. You talked about you know, missing things that were not there. Are those fashion things that were not there, or is it know, you mentioned impulse items. How is beauty doing? You know, things like that to me feel like more impulse And I think you talked about at HomeGoods across the board, things are doing well and things like staples that people need to replenish. And I remember being on the store and talking about how people were buying their dinner. At HomeGoods to make that night. Are consumables still doing well? Can you just talk a little bit about the kind of nonapparel categories and non-traditional home categories? Ernie L. Herrman: Non So, but, Marni, I cannot obviously, I cannot give you in Marmaxx the ones I cannot tell you, whether it was fashion. I it is a bit of a mix. And I cannot get too specific on which family or categories there we felt on only because of competitive environment we are in. And giving that information externally. I can tell you it was not any 1-dimensional. It was a combination of different things in Marmaxx. And then at the same time, as witnessed by the fact, in Marmaxx, that we ran a 1 and not a -3 is we had a lot of categories that were performing well. So, you know, we had a handful of areas that when they get hit, it pulls you down from what could be a 2 or 3 down to a 1 is what happens because in Marmaxx, as you know, in this and clearly, the street thinks this. The differences between a 1 and a 3 is just a very that is kind of what we are talking about here, not a, you know, a -3 to a +4 or So it can be a pretty-- you can have, excuse me, a handful, and it throws you off where you are just missing the 2 comp by a little bit. And then HomeGoods, the, reply yeah. Across the board, I probably should not just emphasize the, the replenishment, as you call them, categories. Because it is really, it is not just the consumables. it is across the board. A lot of the decorative and even some of the higher ticket areas are doing really, really well And I am talking, you know, from lighting to wall, categories to, without giving anything away. I think they are just executing almost every mix at a very high level. And I again, I think what the merchants are doing in HomeGoods and planning and the stores and executing distribution. They have all cylinders clicking marketing. Is they are giving the customer an experience they really it is difficult to find that experience in any other retailer. it is a different type of treasure hunt, and some of the goods, as you know, are very unique that only HomeGoods has. In a different type of manner. Whereas you go to a apparel across the board. You know, we apparel that we would have in whether it is a TJ Maxx or Marshalls or Sierra, you know, that apparel fortunately is in other places where better value want it. I think in HomeGoods, you have some just unique product categories that creates a whole other reason to shop them. So that is the innovation that I think I do not think anybody else in the home industry, and I am not just talking The United States, I am talking Europe, Canada. As you know, in Canada, we over index. that is our largest 1 of our largest market share geographies in the corporation. And now that you have had closures with the bay, it etcetera, we just continue to, the Canadian merchants are doing an amazing job in HomeSense. And in, Winners and in Marshalls in Canada. And I think, we do not talk about Canada a lot, but they just continue to gain major market share there as well. Similar to what HomeGoods is doing here, Canada's doing there. K. Marni Shapiro: I have 1 follow-up on HomeGoods. Your back to college set was unbelievable. I mean, stop me in my tracks. Unbelievable. And I am just curious if you saw a pickup in traffic and in trends at HomeGoods when that set. Ernie L. Herrman: Yes. They have been, very pleased. I do not have the specifics in front of me, but I know the team has talked about their back to campus is what they call it. The set and the results have been, have been very healthy. Yep. And I think to your point, the timing was perfect. And it looked, I think, better than better than ever. I am glad you noticed it. It was Yeah. Stunning. Took my breath away. Congrats to that team. Thank you, Ernie. Yeah. No. Congrats. Thank you. And they will by the way, Marni, they will appreciate that comment. On that. Fab. Marni Shapiro: Thanks, guys. Thank you, Marni. Operator: Our next question comes from Ike Boruchow Your line is open. Ike Boruchow: Hey, Ernie. I guess I was going to ask I guess my first question is, how are you doing? On the freight side, I think you meant mentioned this to Michael already, but has the freight expectation in the back half changed versus 3 months ago? Or is this kind of what you thought it would be then the follow-up to that is, not so much August and back to school, but for the fourth quarter, there is more and more red flags around Super El Nino weather impacts to the quarter. You guys have kinda done really well in those past couple times we have had these Super El Ninos going back to the model. Just curious if it is starting to affect the way that you are planning product, planning merchandise mix. Just kinda curious how you are starting to think about the holiday even though I know it is early. Thanks. Ernie L. Herrman: Yep. I will let So I will let John I will I will start with a great question. Yeah. John Klinger: I mean, it is in line with what we were expecting. I mean, obviously, the at the beginning of the year, we the first quarter, when we mark to market fuel hedges, we knew that, that was taking a lot of benefit that so that when the actual we got to the later the next 3 quarters, it was gonna be a negative impact. So, it was it was all expected. Yeah and on Got it. It. Ernie L. Herrman: Icon, the on the weather thing, we so what we do is, you know, we try not to, get specific on the weather, but the liquidity and I think you said this before, we have tended to no pun intended, weather the storm on these things pretty well. Right? We because we keep our liquidity and our shipping out of our warehouses is something we control a little better than traditional retailers. Our goods do not have to necessarily go straight to the lanes and go to the stores if we think there is going to be an unusual weather pattern in a certain region, So where we this is a benefit of our model where we stage goods our warehouses versus goods that most brick and mortar retailers come into the warehouse and have to go out We have racks where we can manipulate in our planning organization is really good at reacting to any, wild swings in weather or natural disasters or any of those red flags. I think that is what you are talking about. So yeah, I think, for now, they are just they just stay aware. And as you get as we get closer in, we can maneuver. Again, we are set up to maneuver better than most brick and mortar. Ike Boruchow: Got it. Thanks, guys. Operator: Thank you. The final question of the day comes from Aneesha Sherman. Your line is open. Aneesha Sherman: Okay. Thank you so much. Hi, Ernie and John. So you have seen positive ticket growth you know, all through most of last year and year to date this year. You have a stronger mix of better items, premium brands than you had a few years ago. Do you see more runway on this growth in ticket and AUR in the current consumer environment? And then a quick follow-up, Ernie, on your comment on marketing, playing offense on marketing. You have been really active on digital and social media marketing now for the last couple of years. Is there anything meaningfully different in terms of your type of marketing or your budget percent of sales that is changing this year? Thank you. Ernie L. Herrman: Okay, Aneesha. Yeah. Well, on the first, on your first question there, which was AUR and ticket. Yeah. I yes. We have seen increases. I would tell you in this environment to what you said, I we are gonna moderate there. And I think it might you know, we might be up a few is the way it is been kind of tracking, but I do not see a long term trend there heading that way. it is probably gonna moderate a little bit, and that is our best guess. The only reason, then I would tell you I think we have talked about this before. it is bottom up. In our organization, so we do not dictate ticket from top down. And so, if certain exciting categories or vendor deals come down, and some of the better vendors that can throw us for a little surprise in a good way where we have some crazy deals from better vendors that can have our ticket go up short term. And then you have category mixes, and that is what I think we have talked about in the past is the mix of certain categories within the whole store is what sometimes has made our mix go up. it is not like for like items or categories where the retail has changed. it is the mix within the store has changed to more higher average retail categories. So I think our escalation ticket will probably moderate and that is just an educated guess over the next 6 months. And then your question on advertising spend. So we plan very consistently year over year. And then in the in the year, if we are having a strong year, oftentimes, we will we will commit a little more dollars to the to push that message, continue to feed the fire. Aneesha, though, so you have an idea about which this current is. In the first half of the year, we had 1.1 billion paid video views across Facebook, Instagram, TikTok, Pinterest, YouTube, which shows you that would not have looked that way on the last couple of years, shows you how aggressive by the way, we had over 300 million in HomeGoods. So 1.4 billion video views across, those venues of Facebook, Instagram, Pinterest and YouTube. And that is just in the first half. Our customers are. And the neat thing about it is, we see t the TJX brand c video completion rates on TikTok and YouTube that are significantly above the industry benchmarks which that is really demonstrating that our content is really highly engaging to the customer. So they are staying on watching the content through most of the video, which is not always the case with a lot of competition out there. They will show it as a view, but they do not necessarily watch the entire thing like our customers are watching. that is really good color. Aneesha Sherman: Thank you. we. Thanks for the question. Ernie L. Herrman: And I think that was our last question. Thank you all for joining us today. We look forward to updating you again on our third quarter earnings call in November. Thank you, everybody. Operator: Ladies and gentlemen, that concludes your conference call for today. You may all disconnect Thank you for participating. Before you buy stock in TJX Companies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and TJX Companies wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends TJX Companies. The Motley Fool has a disclosure policy. TJX (TJX) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

As Burlington Stores, Inc. BURL prepares to unveil its second-quarter fiscal 2026 earnings on Aug. 27, before the opening bell, investors are eager to see if the company can beat market expectations. The Zacks Consensus Estimate for revenues stands at $3.03 billion, indicating 12% growth from the prior-year quarter. The consensus mark for earnings has inched up a penny to $2.18 per share over the past seven days, suggesting a 37.1% increase from the year-ago period.BURL has a trailing four-quarter earnings surprise of 14%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 13.6%. Image Source: Zacks Investment Research As investors prepare for Burlington Stores’ second-quarter results, the question looms regarding an earnings beat or miss. Our proven model predicts that an earnings beat is likely for Burlington Stores this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.Burlington Stores has a Zacks Rank #3 and an Earnings ESP of +1.84%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Burlington Stores’ second-quarter performance is likely to have benefited from the inherent strength of its off-price model. The company entered the quarter with positive customer trends across income groups and favorable access to off-price merchandise, enabling it to offer recognizable brands at compelling values. Its value-focused positioning is likely to have supported traffic as shoppers remained selective about discretionary spending. Burlington Stores’ ability to respond quickly to demand through opportunistic buying and a frequently refreshed assortment may have provided support to comparable-store sales. We expect comparable store sales to increase 2.7% during the quarter under discussion.The company has been strengthening its allocation and localization capabilities, allowing it to tailor merchandise more closely to regional and store-level demand and respond more effectively to changing trends. At the same time, disciplined inventory management, better buying and efficient markdown execution are likely to have supported merchandise margins. Faster inventory turns and a focus on flowing fresh receipts should also have helped maintain assortment relevance and support sales trends.Another likely sales driver has been Burlington’s ongoing store expansion and improvement initiatives. The company planned for the majority of its new-store openings to occur in the first half of the year, supporting continued expansion of its store base. At the same time, relocations and downsizes of legacy stores have been aimed at improving productivity by shifting the business toward smaller, more efficient locations. Burlington Stores has also continued upgrading its existing store environment through its Store Experience 2.0 initiative to make stores easier to shop and more engaging, with prior retrofits generating positive customer feedback and a sales lift.However, the second quarter also carried some headwinds. Burlington Stores was lapping its strongest quarterly comparison from the prior year, and the company had cautioned that comparisons would become more difficult as the quarter progressed. Higher fuel costs are expected to have put pressure on freight expenses, while start-up costs associated with the new Savannah distribution center are likely to have partly offset supply-chain productivity gains. Burlington Stores, which competes with Ross Stores, Inc. ROST and The TJX Companies, Inc. TJX, has seen its shares jump 16.5% over the past year compared with the industry’s 11.5% rise. While shares of Ross Stores have surged 62.2%, those of TJX Companies have advanced 3.7% over the same time frame. Image Source: Zacks Investment Research Burlington Stores’ valuation remains discounted relative to the industry. The stock currently trades at a forward 12-month P/E multiple of 24.66, below the industry average of 30.14. BURL is also trading below its 12-month median P/E of 26.83, suggesting that the stock is available at a relatively attractive valuation compared with both its historical trading level and the broader industry.BURL is trading at a discount to Ross Stores (forward 12-month P/E ratio of 28.50) and TJX Companies (25.54). Image Source: Zacks Investment Research Burlington Stores appears well-positioned heading into its second-quarter earnings release, supported by continued momentum in its off-price model, improving merchandise execution and ongoing store transformation initiatives. The company’s ability to deliver value, manage inventory effectively and expand margins provides a favorable backdrop, while recent estimate trends and earnings indicators suggest the potential for a positive outcome. However, investors should remain mindful of comparison pressures and cost headwinds that could influence quarterly results. Given the company’s strong fundamentals, improving operating model and relatively attractive valuation, current investors may consider holding their positions, while potential investors could look for opportunities around the earnings event while monitoring management’s outlook. 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 Burlington Stores, Inc. (BURL) : Free Stock Analysis Report The TJX Companies, Inc. (TJX) : Free Stock Analysis Report Ross Stores, Inc. (ROST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Overall Comparable Sales: Increased 4% in the second quarter, above plan. Adjusted Pre-Tax Profit Margin: 11.9%, up 50 basis points versus last year. Adjusted Gross Margin: 31.4%, up 70 basis points versus last year, driven by an increase in merchandise margin. Adjusted SG&A: 19.7%, unfavorable by 20 basis points versus last year, driven by incremental store wage and payroll costs. Adjusted Diluted EPS: $1.22, up 11% versus last year. Marmaxx Comparable Sales: Increased 1%, driven by a higher average basket partially offset by a small decrease in customer transactions. HomeGoods Comparable Sales: Increased 7%, with adjusted segment profit margin of 12.4%, up 240 basis points. TJX Canada Comparable Sales: Increased 6%, with adjusted segment profit margin on a constant currency basis of 16.3%, up 30 basis points. TJX International Comparable Sales: Increased 7%, with adjusted segment profit margin on a constant currency basis of 7.3%, up 210 basis points. Inventory: Balance sheet inventory up 7%, inventory on a per store basis up 2%. Capital Allocation: Returned $1.3 billion to shareholders through buyback and dividend programs in the second quarter. Third-Quarter Guidance: Overall comp sales expected to be up 2% to 3%; consolidated sales in the range of $15.6 billion to $15.8 billion; adjusted diluted EPS in the range of $1.30 to $1.32. Full-Year Guidance: Overall comp sales growth of 3% to 4%; consolidated sales in the range of $63.4 billion to $63.8 billion; adjusted diluted EPS in the range of $5.15 to $5.20. Long-Term Store Growth: Increased long-term store growth potential by 500 stores to a total of 7,500 stores. Warning! GuruFocus has detected 5 Warning Signs with BSP:LPSB3. Is TJX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Overall comparable sales increased 4%, exceeding the company's plan, driven by strong performance in three of four divisions. Adjusted pre-tax profit margin rose 50 basis points to 11.9%, and adjusted EPS increased 11% to $1.22, both well above expectations. HomeGoods delivered an outstanding 7% comp sales increase with a 240 basis point improvement in segment profit margin, showcasing strong execution. TJX International and Canada posted excellent comp sales growth of 7% and 6%, respectively, with significant margin expansion in Europe and Australia. The company raised its long-term store growth potential by 500 stores to 7,500, and plans to accelerate store openings to 4% next year, reflecting confidence in growth opportunities. Merchandise availability remains 'off the charts,' with a strong inventory position (up 2% per store) to capitalize on buying opportunities. Management is confident in fixing Marmaxx's execution issues, citing improvement in August and a strong start to Q3, with expectations of greater improvement by the holiday season. Marmaxx, the largest division, underperformed with only a 1% comp sales increase, below expectations, due to self-inflicted execution issues in merchandise mix. Marmaxx experienced a small decrease in customer transactions, indicating a failure to capture potential sales due to missing key items in the mix. Third-quarter guidance implies a slowdown in comp sales growth to 2%-3%, down from the 4% achieved in Q2, and a decline in pre-tax profit margin. Higher fuel and freight costs are expected to pressure gross margin in the second half, with a 40-50 basis point decline in Q3 gross margin guidance. The company faces increased SG&A costs from store wage and payroll investments, which were unfavorable by 20 basis points in Q2. Management acknowledged that Marmaxx's issues were 'self-inflicted' and within their control, highlighting a lapse in execution that could impact near-term performance. The company's guidance for Q4 assumes no further tariff refunds, and EPS growth is expected to moderate to 1%-3%, reflecting a cautious outlook. Q: Could you speak to the progression of same-store sales at Marmaxx during the second quarter and elaborate on the sales improvement cited in August? Also, can you discuss the recent new store performance metrics and the opportunity to raise the store target? A: Ernie Herrman (CEO) and John Klinger (CFO) noted that Marmaxx started the quarter stronger in May, with June and July consistent, all positive. They are seeing improvement in August and are confident of greater improvement by Q4. The issues were self-inflicted execution problems, not competition. Regarding store growth, they increased the long-term store potential by 500 stores to 7,500, driven by opportunities in rural markets, the ability to place stores closer together, and small-format stores in urban areas. New store performance has been exceeding expectations. Q: Can you provide more insight into what went wrong at Marmaxx, the steps taken to fix it, and how quickly you think you'll return to a more normal 2% to 3% comp cadence? A: Ernie Herrman (CEO) explained that the issues were entirely self-inflicted and within their control, related to merchandise mix execution in a handful of areas. They have identified the problems and involved everyone from buyers to senior management in fixing them. He is confident they will see significant improvement by Q4, with a trend improvement already visible in August. He emphasized that the issues had nothing to do with competition, as their stores comp identically whether near or far from direct off-price competitors. Q: Was the small decline in transactions at Marmaxx traffic-driven or conversion-driven, and is there anything off from a price point perspective impacting conversion? A: Ernie Herrman (CEO) clarified that the decline in transactions was not conversion-driven or related to value or price points. It was more about what they didn't have in the mix in specific areas. Customers may not have known the product wasn't there, but they couldn't buy it, leading to lost sales. John Klinger (CFO) added that transactions are measured through the register, not footfall. Q: What led to the misstep in buyers' knowledge of the customer, and what changes are being implemented in buying and allocation to be more consistent into the holiday season? A: Ernie Herrman (CEO) stated they have instituted two more systematic changes in planning to monitor the situation and prevent it from happening to that degree. He noted that Marmaxx has had strong business for many quarters, and this is a rare occurrence in a business that is "a bit of an art form." Everyone from buyers to the President of Marmaxx has been involved in institutionalizing the fixes. Q: Can you unpack the strong comp result at HomeGoods by traffic or ticket, discuss the categories driving it, and whether it's sustainable? Also, what's driving the margin expansion, and are there structural constraints to reaching mid-teens margins? A: Ernie Herrman (CEO) highlighted that the HomeGoods team has been executing consistently, creating excitement and impulse treasure hunt shopping across categories from kitchen to seasonal decor. They have also built a consumable, replenishment business that drives steady traffic. Store execution and presentation are excellent. John Klinger (CFO) added that the margin expansion is driven by top-line growth, operational efficiencies, and merchandise margin improvement from lower tariff costs. Q: Can you walk us through the changes to the second-half gross margin plan that net out to holding it flat, and were there any new positives versus 90 days ago? A: John Klinger (CFO) explained that the biggest difference between the first and second half is fuel and freight rates. The first half had favorability from freight accrual mark-to-market on hedges, while the back half faces higher fuel rates and freight costs due to less driver availability. Additionally, the first half had a 5% comp versus a guided 2% to 3% in the back half, and merchandise margin favorability from tariff negotiations is anniversarying. He noted the guidance is consistent with what they had underlying guided to, with the beat flowed through to the full year. Q: Can you tell us about Sierra, HomeSense, and Europe's fit into the 7,500 long-term store target, and why not talk about potential new countries? A: Ernie Herrman (CEO) stated that Sierra and HomeSense are growing at rates well above the 4% average. They are always looking at new countries, as evidenced by Mexico, Brands for Less, and Spain, where customer response has been extremely positive. He expressed confidence in their ability to grow the model internationally and assured that they are actively looking at new markets, though he couldn't disclose specifics. Q: Can you talk about the non-apparel and non-traditional home categories at Marmaxx, and are consumables still doing well at HomeGoods? A: Ernie Herrman (CEO) couldn't specify which categories underperformed at Marmaxx for competitive reasons but noted it was a combination of different things, not one-dimensional. At HomeGoods, performance is strong across the board, including decorative, higher-ticket areas like lighting and wall decor, and consumables. He praised the unique product categories and the treasure hunt experience that differentiates HomeGoods from other retailers. Q: Has the freight expectation in the back half changed versus three months ago, and is the potential Super El Nino weather impacting how you plan product and merchandise mix for Q4? A: John Klinger (CFO) confirmed the freight expectations are in line with what they expected, as the first-quarter mark-to-market on fuel hedges anticipated the negative impact in later quarters. Ernie Herrman (CEO) added that their model allows them to stage goods in warehouses and react to weather patterns better than traditional retailers, giving them flexibility to maneuver around any unusual weather or natural disasters. Q: Do you see more runway on ticket and AUR growth, and is there anything meaningfully different in marketing type or budget as a percent of sales this year? A: Ernie Herrman (CEO) expects ticket growth to moderate in the current environment, though it could surprise to the upside with exciting vendor deals. The mix of categories within the store has driven ticket up, not like-for-like price increases. John Klinger (CFO) noted advertising spend is planned consistently year-over-year, with potential for additional dollars if the year is strong. Ernie Herrman highlighted their aggressive digital and social media marketing, with 1.4 billion paid video views in the first half across platforms like Facebook, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

The Dow Jones Industrial Average (DJINDICES:^DJI) fell 1.32% to 52,759, the S&P 500 (SNPINDEX:^GSPC) declined 0.85% to 7,642, and the Nasdaq Composite (NASDAQINDEX:^IXIC) dropped 1.00% to 26,067 as rising oil prices and retail earnings pressure snapped Wednesday's relief rally. Retail giant Walmart (NASDAQ: WMT) weighed on the market following a profit report that dampened consumer sentiment, while TJX Companies (NYSE:TJX) fell roughly 3% after reporting a rare miss in its largest business segment. Robinhood Markets (NASDAQ:HOOD) reversed its earlier gains to close lower despite positive sentiment from a White House crypto summit, while Lumentum Holdings (NASDAQ:LITE) shares rose as leadership highlighted surging demand for AI infrastructure components. Walmart shares helped lead the market lower after it reported earnings, with its stock sliding 9%. WMT stock is in the Dow, S&P 500, and Nasdaq-100, so its slide weighed heavily on the broader market today. That said, the company beat analysts' expectations, but same-store sales of 2.6% and its 2026 guidance were weaker than hoped. Furthermore, management noted that $4 gas prices seem to be having a psychological effect on consumers' spending habits. Meanwhile, apparel retailer TJX offered guidance that surpassed Wall Street's expectations -- and the company beat sales and earnings expectations for the quarter -- but the stock retreated 3% anyways. With the U.S. national debt passing $40 trillion yesterday, relations with Iran still tumultuous at best, and bond yields still rising despite the Treasury's plan for a bond buyback, the market has become a bit more iffy than it has been recently. That said, two-thirds of the stocks in the S&P 500 are positive so far in 2026, so it is important to zoom out a bit and realize we are not in a perilous situation just yet. Before you buy stock in Invesco QQQ Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Invesco QQQ Trust wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 20, 2026. Josh Kohn-Lindquist has positions in Robinhood Markets. The Motley Fool has positions in and recommends Lumentum and TJX Companies. The Motley Fool has a disclosure policy. Stock Market Today, Aug. 20: Stocks Slide on Weak Retail Earnings, Rising Bond Yields was originally published by The Motley Fool

The TJX Companies, Inc. TJX used its second-quarter fiscal 2027 earnings call to frame Marmaxx’s softer performance as a correctable execution problem while leaning on stronger results elsewhere and a larger store-growth opportunity. Adjusted earnings of $1.22 per share topped the Zacks Consensus Estimate of $1.18. Revenues of $15.18 billion beat the consensus estimate of $15.14 billion. Management raised its full-year profit outlook but kept comparable-sales (comps) expectations unchanged. The TJX Companies, Inc. price-consensus-eps-surprise-chart | The TJX Companies, Inc. Quote CFO John Klinger said that fiscal 2027 adjusted pre-tax margin is expected at 12-12.1%, suggesting growth of 30-40 basis points from that reported last year. Klinger also raised the adjusted earnings guidance to $5.15-$5.20, indicating 9-10% year-over-year growth. Full-year comps are expected to rise 3-4%. For the fiscal third quarter, Klinger guided comps growth of 2-3% and adjusted earnings of $1.30-$1.32 per share. CEO and President Ernie Herrman said that Marmaxx’s 1% comps increase fell below expectations because the division did not have the right merchandise mix in the right stores at the right time. In response to a BofA Securities analyst, Herrman called the issue self-inflicted and said that management had identified the affected areas. Marmaxx improved in August, with greater improvement expected by the holiday quarter. A Goldman Sachs analyst pressed on prevention. Herrman said that TJX added systematic planning processes while involving buying, planning and senior merchandising leaders in the correction. Herrman revealed that TJX plans to increase annual store-opening growth to 4% beginning in fiscal 2028 and raised its long-term store target by 500 locations to 7,500. Klinger told a JPMorgan analyst that Marmaxx gained 300 stores of long-term potential and HomeGoods gained 200. He cited rural markets, denser store placement and smaller formats as expansion opportunities. Herrman added that Sierra and Homesense are expected to grow well above the 4% corporate pace. Management also said that new stores have been exceeding expectations. Klinger said that HomeGoods delivered a 7% comps increase, while TJX Canada rose 6% and TJX International advanced 7%, helping offset Marmaxx. A Morgan Stanley analyst focused on HomeGoods’ sales and margin momentum. Herrman pointed to broad category strength, consumables, store presentation and a differentiated treasure-hunt assortment. Klinger added that HomeGoods’ adjusted segment margin increased 240 basis points to 12.4%, supported by top-line growth, operating efficiencies and merchandise-margin improvement. Klinger said that fiscal third-quarter adjusted gross margin is expected to be 32.1-32.2%, suggesting a fall of 40-50 basis points from that reported last year because of higher fuel costs. Asked by an Evercore ISI analyst about second-half margins, Klinger informed that higher fuel and freight costs, slower planned comps growth, and merchandise-margin comparisons explain the first-half-to-second-half shift. Herrman told a Bernstein analyst that recent ticket growth should moderate. He added that category mix and branded buying opportunities, rather than top-down pricing targets, drive ticket changes. Herrman said that the second half will focus on merchandising, gifting, marketing and traffic, supported by strong branded-merchandise availability. Management’s posture combined near-term repair work at Marmaxx with broader expansion plans. The raised profit outlook and store target sit alongside unchanged full-year comps guidance. TJX currently carries a Zacks Rank #3 (Hold). Its Growth Score of A, Momentum Score of B and VGM Score of B are favorable, while its Value Score of D indicates weaker value characteristics under the Style Score framework. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Style Scores are designed to complement the Zacks Rank, with A and B grades preferred. A Rank #3 can still be held under the framework, but the Zacks Rank may change as earnings estimates are revised after the reported quarter. 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 The TJX Companies, Inc. (TJX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research