Episode Details

The TJX Companies (TJX) Q2 FY2027 — TJX released Q2 FY2027 BEFORE THE OPEN on Wednesday August 19 (Form 8-K 0000109198-26-000045, EDGAR 'Accepted 2026-08-19 09:09:11' ET; call 11:00 AM ET). Shares closed USD150.85 on Aug 18, OPENED USD144.14 (-4.45 pct) and traded USD146.35 (-2.98 pct) at 12:48 ET on 1.23x volume - an INTRADAY reading. The TJX Companies is the world's largest off-price apparel and home fashions retailer - TJ Maxx, Marshalls, HomeGoods, Sierra, Winners, Homesense and TK Maxx - 5,285 stores in ten countries. Q2 FY2027 net sales were USD15.18bn (+5 pct) on comparable sales of +4 pct. THE CALL: HOLD (3/5, MEDIUM - A VERY GOOD BUSINESS AT A FULL PRICE) — base-case value ~$131.21 vs ~$146.35 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value USD131.21 vs USD146.35 (-10.3 pct). Bear USD105.54 / base USD128.66 / bull USD176.07, weighted 30/50/20. A ten-year free-cash-flow DCF: FY2026's actual USD4.92bn grown by the guided +9.4 pct to USD5.38bn, then 8 pct for five years, 5 for five more, 3 for ever at 8.25 pct, plus USD3.13bn net cash over 1,117M shares. - THE PRINT: net sales USD15.18bn (+5 pct) vs a USD15.17bn bar; comps +4 pct vs a plan of +2 to +3. Adjusted diluted EPS USD1.22 vs a USD1.19 consensus and vs the company's own May plan of USD1.15-1.17. GAAP EPS USD1.36. Adjusted pretax margin 11.9 pct; adjusted gross margin +0.7 points on merchandise margin; adjusted SG&A +0.2 on store wages. - THE ANGLE: Marmaxx is 60.0 pct of net sales (USD9,109M) and 64.8 pct of adjusted segment profit - and it comped +1 pct, down from +3, with sales the CEO called below expectations. Its adjusted segment margin was FLAT at 14.2 pct. Adjusted segment profit rose USD195M; Marmaxx supplied ~USD39M. Four fifths of the growth came from the other 40 pct. - THE OTHER THREE: HomeGoods comped +7 pct and took its adjusted segment margin 10.0 to 12.4 - ~43 pct of the whole gain. TJX International comped +7 and went 5.2 to 7.3. TJX Canada comped +6, down from +9. Of USD779M of extra net sales Marmaxx supplied USD268M, 34 pct of the growth from 60 pct of the base. Stores 5,262 to 5,285; sq ft +0.4 pct. - TESTED AND REJECTED: the buyback did NOT make the quarter. Diluted shares fell 0.98 pct (1,128M to 1,117M) while adjusted EPS rose 10.9 pct, so underlying profit rose 9.8 and the repurchase is worth ~1.1 of the 11 points. Nor a cut bar: FY guidance went USD4.93-5.02 (Feb 25) to USD5.08-5.15 (May 20) to USD5.15-5.20 adjusted today. - THE RAISE, LIKE FOR LIKE: headline FY guidance rose to USD5.31-5.36, +22 cents at the midpoint - but USD0.16 of that is expected tariff refunds. The adjusted USD5.15-5.20 against May's USD5.08-5.15 is +6 cents. And the comp guide was left UNCHANGED at +3 to +4 pct despite a +5 pct first half, implying +1.3 to +3.2 pct in the back half. - WHAT YOU PAY: 28.3x the midpoint of the raised adjusted guide. The reverse solve says the tape needs 9.7 pct free-cash-flow growth for five years; Wall Street's USD177.40 average needs 12.2. TJX compounded free cash flow 6.5 pct a year FY2024-FY2026 while GAAP EPS compounded 12.3. Street: 22 analysts, 20 buy / 1 hold / 1 sell, low USD125. What to watch: UP: two quarters of Marmaxx comps back above 3 pct (management says Q3 has already improved); HomeGoods holding its new 12.4 pct adjusted segment margin. DOWN: full-year comps landing at the bottom of the unchanged 3-4 pct guide; capital spending outrunning free cash flow as the estate expands toward 7,500 stores. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.