TJX’s first quarter results prompted a negative response from investors, despite revenue and profit meeting or exceeding Wall Street’s expectations. Management attributed the quarter’s performance to steady growth in customer traffic across all divisions and categories, with particular strength in the HomeGoods and international segments. CEO Ernie Herrman emphasized, “Comp sales grew 3% at the high-end of our plan, with every division, both in the U.S. and internationally, driving increases.” However, management acknowledged margin pressures from unfavorable inventory hedges and rising payroll costs, factors that weighed on profitability.
Is now the time to buy TJX? Find out in our full research report (it’s free).
TJX (TJX) Q1 CY2025 Highlights:
- Revenue: $13.11 billion vs analyst estimates of $13.02 billion (5.1% year-on-year growth, 0.7% beat)
- EPS (GAAP): $0.92 vs analyst estimates of $0.91 (in line)
- Adjusted EBITDA: $1.61 billion vs analyst estimates of $1.57 billion (12.3% margin, 2.5% beat)
- Revenue Guidance for Q2 CY2025 is $13.8 billion at the midpoint, below analyst estimates of $14.08 billion
- EPS (GAAP) guidance for the full year is $4.39 at the midpoint, missing analyst estimates by 2.7%
- Operating Margin: 10%, in line with the same quarter last year
- Locations: 5,121 at quarter end, up from 4,972 in the same quarter last year
- Same-Store Sales rose 3% year on year, in line with the same quarter last year
- Market Capitalization: $139.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions TJX’s Q1 Earnings Call
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Lorraine Hutchinson (Bank of America) asked about inventory availability amid shipping delays and tariff uncertainty. CEO Ernie Herrman explained that while some categories may see less supply, TJX’s flexible buying model enables shifts to alternative categories, and inventory levels are strong.
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Matthew Boss (JPMorgan) inquired about the progression of sales at Marmaxx and gross margin outlook. CFO John Klinger noted that sales improved as weather disruptions eased, and margin headwinds in the first half are expected to moderate with mitigation efforts in the back half.
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Adrienne Yih (Barclays) questioned the company’s approach to vendor price negotiations and margin management in a high-tariff environment. Herrman described leveraging vendor relationships, adjusting price points, and using category flexibility to maintain value for shoppers.
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Alex Straton (Morgan Stanley) sought clarity on HomeGoods margin trajectory and tariff impacts on home and toys. Management anticipates continued profitability improvement in HomeGoods and is closely watching sourcing risks for toys, with flexibility to adjust product mix as needed.
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Michael Binetti (Evercore) asked about the potential for trade-down behavior and customer acquisition trends. Herrman reported no clear signs of basket trade-down, with transaction-driven sales increases and new category introductions attracting shoppers from other retailers.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) TJX’s effectiveness in mitigating tariff and supply chain headwinds, (2) continued momentum in customer transactions across U.S. and international segments, and (3) execution of category mix and sourcing strategies, particularly in HomeGoods and toys. Performance in new markets and results from targeted marketing campaigns will also be important markers.
TJX currently trades at $124.56, down from $135 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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