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TJX Poised for In-Line Second-Quarter Earnings Amid 'Ok' Sales Momentum, UBS Says

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TJX Poised for In-Line Second-Quarter Earnings Amid 'Ok' Sales Momentum, UBS Says

TJX (TJX) is expected to post fiscal second-quarter earnings in line with Wall Street's estimates amid "Ok" sales momentum, likely prompting the off-price retailer to raise its full-year outlook, UBS Securities said Tuesday.

The brokerage expects the parent of TJ Maxx and Marshalls to log earnings of $1.19 a share for the quarter when it reports results Aug. 19. That would match the Street's views and be above the company's own guidance range of $1.15 to $1.17. UBS projects revenue at $15.16 billion, reflecting roughly 2.4% comparable sales growth and benefit from 145 net store openings over the last 12 months.

"We believe TJX had Ok sales momentum through July, and we believe this sets TJX up to deliver an in-line (second-quarter) EPS report," UBS analysts, including Jay Sole, said in a note to clients. "We expect sales growth to be strong across all banners."

This could prompt TJX to lift its fiscal 2027 EPS guidance to between $5.10 and $5.17 from its current outlook range of $5.08 to $5.15, according to the note. The Street is looking for $5.23.

"Google data highlights TJX's US search growth trends accelerating (quarter over quarter), particularly for HomeGoods," the analysts said. "We view these as positive signals for HomeGoods' sales growth trends leading into (the third quarter)."

For the ongoing quarter, TJX is expected to "maintain its habit of providing beatable quarterly guidance" and provide an EPS estimate of $1.30 to $1.32, compared with the Street's $1.35 view, UBS said.

"Our conversations with investors indicate they view TJX as having the best combination of defensiveness and growth among softlines stocks," the analysts wrote. "While TJX probably doesn't deliver great Marmaxx division (second-quarter) comp growth, we don't believe this will change the market's TJX thesis."

Overall, UBS sees TJX's sales growing at a 7.5% compound annual growth rate through 2030, driven by store expansion and market share gains. "We believe this should drive solid (mid-single-digit percentage) comp sales growth," the analysts said.

Discount retailers Dollar Tree (DLTR) and Dollar General (DG) are scheduled to report their respective fiscal second-quarter results Aug. 27.

Price: $156.43, Change: $-2.39, Percent Change: -1.50%

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