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F500-2023-087-TJX

The off-price department store chain brought in nearly $3.5 billion in profits in 2022, a 7% increase over 2021. TJX dropped 12 spots on the Fortune 500 list after a 22-spot jump last year. 
<ul> 
 	<li>Marmaxx, TJX’s apparel unit, was its biggest revenue driver, bringing in $30 billion of the $49.9 billion the company generated overall. Its HomeGoods division, however, saw slower sales after two years of expansion during the pandemic.</li> 
 	<li>TJX continues to lag in the e-commerce space, which held the company back at COVID’s height.</li> 
 	<li>Still, TJX has outlasted many of its competitors; Bed Bath &amp; Beyond’s bankruptcy may lead to more foot traffic at TJX stores.</li> 
</ul>

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F500-2022-075-TJX

TJX is the parent company of off-price retailers like T.J.Maxx, Marshalls, HomeGoods, Sierra, and Homesense, operating almost 4,700 stores in nine countries. The pandemic initially had a severe impact on revenue for TJX, which gets only a small percentage of its sales from e-commerce. But as lockdowns ended, the company rebounded, and in 2021, it grew revenue by 51% year over year, enabling it to jump 22 spots on this year’s list. In March 2022, TJX announced it would sell its 25% stake in Russian apparel retailer Familia in response to Russia’s invasion of Ukraine. In April 2022, the company announced that it is aiming to achieve net-zero greenhouse gas emissions in its operations by 2040.

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<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;TJX took a particularly brutal beating from the pandemic last year, hit by the double whammy of having almost no e-commerce to fall back on when its stores were closed for long periods, and the precipitous drop in spending on fashion. Sales fell 23% to $32.1 billion—but the damage could have been worse. For one thing TJX’s HomeGoods business slipped only 4%. And when its other banners, T.J. Maxx and Marshalls, reopened, business rebounded quickly. There are signs of pent-up demand for fashion apparel that should give TJX a boost this year (barring any new outbreaks that close stores en masse again), and spending on the home continues apace.&quot;}" data-sheets-userformat="{&quot;2&quot;:14723,&quot;3&quot;:{&quot;1&quot;:0},&quot;4&quot;:{&quot;1&quot;:2,&quot;2&quot;:16777215},&quot;10&quot;:2,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Arial&quot;,&quot;16&quot;:11}">TJX took a particularly brutal beating from the pandemic last year, hit by the double whammy of having almost no e-commerce to fall back on when its stores were closed for long periods, and the precipitous drop in spending on fashion. Sales fell 23% to $32.1 billion—but the damage could have been worse. For one thing TJX’s HomeGoods business slipped only 4%. And when its other banners, T.J. Maxx and Marshalls, reopened, business rebounded quickly. There are signs of pent-up demand for fashion apparel that should give TJX a boost this year (barring any new outbreaks that close stores en masse again), and spending on the home continues apace.

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F500-2021-97-TJX

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G500-2020-292-TJX

The off-price discount fashion and home goods retailer continued its long march toward retail dominance, with sales up 7% in 2019, to $41.7 billion, making it bigger than Macy’s and J.C. Penney combined. In the early days of the pandemic, TJX revenues fell off nearly entirely, with all stores closed and only a tiny e-commerce business in operation. But coming out of the lockdowns, TJX's strong financials should make its stores even more desirable to fashion brands as department stores continue to wither, analysts say. What’s more, TJX’s home furnishings chain HomeGoods has been booming alongside the more apparel-oriented T.J. Maxx and Marshalls.

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F500-2020-080-TJX

The off-price discount fashion and home goods retailer continued its long march toward retail dominance, with sales up 7% in 2019, to $41.7 billion, making it bigger than Macy’s and J.C. Penney combined. In the early days of the pandemic, TJX revenues fell off nearly entirely, with all stores closed and only a tiny e-commerce business in operation. But coming out of the lockdowns, TJX's strong financials will make its stores even more desirable to fashion brands as department stores continue to wither. What’s more, TJX’s home furnishings chain Home Goods has been booming alongside the more apparel-oriented T.J. Maxx and Marshalls.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Founded in 1962, TJX is an off-price retailer known for its portfolio of discount department stores, including T.J. Maxx, Marshalls, and HomeGoods, as well as various international brands like Winners and TK Maxx. It operates in the U.S., Canada, Europe, and Australia.

Q2 2027

Q1 2027

Q4 2026

Q3 2026

Q2 2026

Q1 2026

Q4 2025

Q3 2025

TJX (TJX): Company Profile, Stock Price, News, Rankings

legacy

Ladies and gentlemen, thank you for standing by. Welcome to The TJX Companies Third Quarter Fiscal 20 25 Financial Results Conference Call. As a reminder, this conference call is being recorded, November 20, 2024. I would like to turn the conference call over to Mr. Ernie Hermann, Chief Executive Officer and President of The TJX Companies Inc.

Thanks, Sheila. Before we begin, Deb has some opening comments.

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 Investors section of our website, tjx.com. We've 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 the reconciliations to non GAAP measures we discuss.

Thank you. And now I'll turn it back over to Ernie.

Good morning. Joining me and Deb on the call is John. I want to begin our call today by saying that our hearts go out to all of our associates, their families and everyone who has been affected by Hurricane Selene and Milton. To help with relief efforts, we made essential emergency supplies and resources available to our associates in the impacted areas. We also made emergency donations to the World Central Kitchen and the American Red Cross through our TJX Foundation.

We take our commitment to supporting communities seriously and try to help local communities during times of need through our long standing relationships with organizations that provide critical support. Now to our business update and 3rd quarter results. I am very pleased with our Q3 performance. I want to personally thank all of our global associates for their continued hard work and commitment to TJX. Comp store sales growth of 3% came in at the high end of our plan.

I am particularly pleased with the operational execution across all of our divisions as each delivered comp store sales increases entirely driven by customer transactions. I want to specifically highlight our European team for their efforts and strong results, which drove the 7% comp increase at our TJX International division. Clearly, our terrific assortment and great values across our retail banners resonated with many of our shoppers when they visited our stores. In terms of profitability, pre tax profit margin and earnings per share both well exceeded our plans. With our Q3 performance, we are once again raising our full year outlook for pre tax profit margin and earnings per share.

John will talk to our profitability performance and guidance in more detail in a moment. Looking ahead, the 4th quarter is off to a strong start. We continue to see outstanding availability of goods across a wide range of brands, which gives us great confidence in flowing fresh exciting assortments to our stores and online this holiday season and beyond. Longer term, we are excited about the opportunities we see to gain additional market share and continue our successful growth in the United States and internationally. I'll talk more about our holiday plans and our opportunities for global growth in a moment.

But first, I'll turn the call over to John to cover our Q3 results in more detail.

Thanks, Ernie. I also want to add my gratitude to all of our global associates for their continued dedication to TJX. Now I'll share some additional details on the Q3. As Ernie mentioned, our consolidated comp sales increased 3%, which is at the high end of our plan and entirely driven by customer transactions. Once again, both our apparel and home categories saw comp sales increases this quarter.

Pre tax profit margin of 12.3 percent was up 30 basis points versus last year. Pre tax profit margin was 40 basis points above the high end of our plan, primarily due to a benefit from the timing of certain expenses, most of which we expect will reverse out in the Q4, expense savings and higher net interest income. Gross margin was 50 basis points was up 50 basis points versus last year. This favorability was primarily due to an increase in merchandise margin. SG and A increased 10 basis points versus last year.

This increase was due to incremental store wage and payroll costs, which largely offset the year over year benefit from closing HomeGoods e Commerce business last year and lower incentive compensation expense this year. Lastly, we're very pleased that diluted earnings per share of $1.14 were up 11% versus last year and also well above plan. Now to our Q3 divisional performance. Again, this quarter across all of our divisions, the comp increases were entirely driven by customer transactions. We see this as a great indicator of the strength of our value proposition.

At Marmaxx, comp store sales increased 2% and segment profit margin was 14.3%, up 30 basis points versus last year. During the Q3, Marmaxx's sales were negatively impacted by store closures due to the hurricanes. Marmaxx's apparel and home categories both saw comp sales increases. We are excited about the initiatives we have planned to drive sales and customer transactions at TJ Maxx and Marshalls this holiday season. Further, we have some great merchandise plans for our U.

S. E commerce sites and our Sierra business. Long term, we remain confident that Marmaxx, our largest division, can further grow its customer base and increase its market share. HomeGoods comp store sales increased 3%. Segment profit margin grew to 12.3%, up 200 basis points versus last year.

As a reminder, last year we had a significant negative impact from the costs associated with the closing of our HomeGoods online business. During the Q3, we were proud to open our 1,000 store in our HomeGoods division, a terrific milestone. With a highly differentiated mix of eclectic merchandise from around the world, we believe that both HomeGoods and HomeSense are well positioned to capture additional share of the U. S. Market over the long term.

At TJX Canada, our comp store sales were up 2%. Segment profit margin on a constant currency basis was 15.2%, down 170 basis points versus last year. I want to mention that most of the year over year decline in Canada's margin was due to some non reoccurring items last year and this year that impacted our year over year comparability. That along with increased freight costs due to the rail shutdown. We are the only major off price retailer in Canada.

We have a very loyal customer base and are offering well recognized retail brands across good, better and best categories. We believe that this sets us up well to attract even more customers to all three of our Canadian banners. At TJX International, comp store sales increased 7% with strong increases in both Europe and Australia. Segment profit margin on a constant currency basis improved 7.2%, up 180 basis points versus last year. As Ernie said, we are very pleased with our European results, which drove this division's overall performance.

Going forward, we are confident that we can gain additional share of both the European and Australian retail markets and increase this division's profitability. Ernie will have more to say on our international growth opportunities in a moment. Moving to inventory. Balance sheet inventory was up 1% and inventory on a per store basis was down 2% driven by lower holdings at our distribution centers. We feel great about our liquidity and the outstanding availability we're seeing in the marketplace.

We are very well positioned to flow fresh assortments to our stores and online throughout the holiday season. I'll finish with our capital buyback and dividend programs. Now I'll turn it back to Ernie.

Thanks, John. Now I'll highlight the opportunities we see that give us confidence that we can keep driving sales and customer transactions in the 4th quarter. First and most importantly, we remain committed to delivering outstanding value to our shoppers every day. This holiday season, consumers can expect to see great value throughout our stores every time they shop us. We see this as a meaningful advantage as consumers can shop our excellent values every day and not have to wait for sales or promotional days elsewhere.

2nd, with the outstanding availability we have been seeing in the marketplace, we are well positioned as a destination for gifts this holiday season. Each of our banners are set up extremely well to offer shoppers across a broad range of income demographics, and exciting selection of gifts at price points that can meet their budgets. With gift offerings in every department, we believe our stores are an appealing one stop shopping destination for consumers to buy for everyone on their list. Further, after the holiday season, we'll continue our focus on being a year round gifting destination. Next, as we do all year long, we plan to flow fresh merchandise to our stores and online multiple times a week, which we believe is a key differentiator of our business.

With our ever changing assortment of merchandise, we are confident that shoppers can see something new every time they visit. In addition, we feel great about our plans to flex our stores after the holidays to the categories and trends we believe consumers will be looking for to start the new year. Lastly, we feel great about our holiday marketing campaigns, which launched earlier this month. Each of our brands are emphasizing gift giving and reinforcing our value leadership. We plan to showcase a wide selection of quality products to highlight that there is something for everyone and demonstrate that our great values are available to everyone every day.

Further, we plan to advertise through a variety of media channels with an emphasis on digital to reach consumers across a wide range and income demographic who are seeking gifting inspiration. Moving on, we believe we are in an excellent position to continue capitalizing on the growth of Off Price around the world and further grow our leadership position. Giving me confidence is our very long track record of executing our flexible business model and our value leadership. We strongly believe that our decades of off price expertise and knowledge is a tremendous advantage and will allow us to continue delivering comp store sales growth, driving customer transactions and attracting new shoppers. Next, we continue to see a significant opportunity to follow to further grow our store base in our existing countries.

With over 5,000 stores today, we continue to see the potential to open another 1200 plus stores with just our current retail banners in our current countries. Beyond this, you've heard me say before that we believe our off price model can work wherever consumers seek fashion and brands at great prices. With that said, I'm excited to announce today that we are planning to expand our TK Maxx banner in Spain. We've been looking at the Spanish market for quite some time and are confident that the timing is right and that we have a strong understanding of the marketplace and the consumer. Importantly, other than a small field office in Spain to effectively serve the local market, we plan to leverage our existing European infrastructure and organization.

We expect our first stores to open in early 2026. And long term, we see the potential to open more than 100 stores in Spain. In addition to our current countries and our planned expansion in Spain, we are extremely pleased to gain off price exposure in new markets as well. Through our JV with Grupo Axo and our investment in Brands 4 Less, we'll now be participating in the growth of off price in Mexico, the UAE, Saudi Arabia and beyond. We are always looking for ways to increase shareholder value and we see these two investments as a good use of cash with an attractive growth and return profile over the long term.

All of this gives me confidence that even as a $50,000,000,000 plus global retailer, significant opportunities remain to capture additional market share around the world going forward. Summing up, I am very pleased with our Q3 performance and we feel great about our initiatives for the holiday selling season. I want to reiterate that we are always looking at ways to increase both our top line and our profitability. Longer term, we are confident that our value leadership, treasure hunt shopping experience and flexibility will continue to be key advantages and allow us to increase our market share. Further, I'm convinced that our global talent is unmatched and that our focus on culture, teaching and training will continue to be major contributors to our success for many years to come.

Finally, we have many initiatives underway in our corporate responsibility programs and I encourage anyone to learn more about our efforts on our corporate website, tjx.com, in the responsibility section. Now I'll turn the call back to John to cover our Q4 and full year guidance and then we'll open it up for questions.

Thanks again, Ernie. As a reminder, adjusted numbers for last year's Q4 and full year exclude the benefit from the extra week in our fiscal calendar last year. Now I'll start with the Q4 guidance where we are expecting overall comp store sales growth to be up 2% to 3%, consolidated sales to be in the range of $15,900,000,000 to $16,100,000,000 pre tax profit margin to be in the range of 10.8% to 10.9%, down 10 basis points to flat versus last year's adjusted 10.9%. Gross margin to be in the range of 29.4% to 29.5%. This would be down 10 basis points to flat versus last year's adjusted 29.5%.

As a reminder, this year's 4th quarter gross margin assumes a negative impact from our year over year shrink accrual. SG and A to be 18.8%, which would be 10 basis points favorable to last year's 18.9 percent net interest income of $35,000,000 which we expect to delever pre tax profit margin by 10 basis points. Our 4th quarter guidance also assumes a tax rate of 26.0 percent and a weighted average share count of approximately 1,140,000,000 shares. Lastly, we're expecting 4th quarter diluted earnings per share to be in the range of $1.12 to $1.14 versus last year's $1.12 adjusted $1.12 Moving to the full year, we continue to expect overall comp store sales to increase 3%. We expect consolidated sales to be in the range of $55,900,000,000 to $56,100,000,000 We're increasing our pre tax profit margin guidance by 10 basis points to 11.3%.

This would be up 40 basis points versus last year's adjusted 10.9%. We now expect gross margin to be 30.3%, a 40 basis point increase versus last year's adjusted 29.9%. We expect this increase to be driven by a higher merchandise margin, partially offset by higher supply chain costs. We continue to plan shrink to be flat versus last year. We continue to expect SG and A to be 19.3%, flat versus last year's 19.3%.

We're planning incremental store wage and payroll costs to be offset by lower incentive compensation costs and a benefit from items that negatively impacted us last year. We're now assuming net interest income of $174,000,000 which would have a neutral impact on our year over year pre tax profit margin. Our full year guidance assumes a tax rate of 25.0 percent and a weighted average share count of approximately 1,140,000,000 shares. We now expect fully diluted earnings per share to be in the range of $4.15 to $4.17 This would represent an increase of 10% to 11% versus last year's adjusted diluted earnings per share of $3.76 It's important to note that we are not flowing through the entire Q3 earnings per share beat of $0.06 to the full year as we expect $0.02 of timing expenses benefit in the Q3 to reverse out in the Q4. In closing, I want to reiterate that we are very pleased with the execution of our teams across the company in the Q3.

We are confident in our plans for the Q4 and always will strive to beat them. We have a very strong balance sheet in an excellent position to continue investing in the growth of TJX while simultaneously returning significant cash to our shareholders. Now we're happy to take your questions. As a reminder, please limit your questions to 1 per person, so we can answer as many questions as we can. Thanks.

Thank you. We will now begin the question and answer session. Our first question will come from Matthew Boss with JPMorgan. Your line is open.

Great, thanks and congrats on another nice quarter.

So Ernie, could you speak to the cadence of comps at Marmaxx or maybe outside of hurricane and weather disruption? Any change in business or market share momentum in the holiday in 2025? And then John, if you could just outline or elaborate on the drivers of the 3rd quarter merchandise margin expansion, maybe just walk through continued drivers of merchandise margin looking forward?

Yes. Sure. Good questions, Matt. Yes. So the we were actually starting off stronger than where we ended up in Marmaxx at the beginning of the quarter.

And in addition to the hurricanes that hit us later, it was really some unseasonably warm weather in Marmaxx that kept pulling us down. In fact, we pretty much rounded down to the 2. We were heading in a good place. And I'll tell you this, I'm extremely happy with where Marmaxx is starting off Q4, starting off strong as we enter November here. And I know you're not asking about Europe, but this is where the weather and you've probably seen all the different reports at the unseasonably warm weather has affected other retailers and shopping patterns beyond just the hurricanes.

Our Europe business had a benefit from weather. So the 7 comps that we have there, that team over there who did a great job on executing, I think would tell you though that they were helped by some favorable cooler weather actually in Europe. So it's a tale of 2 cities. Again, the cadence was kind of like that the way Marmaxx went. So we're feeling ultimately feeling very good about the Marmaxx business and where we're headed for Q4.

Yes. And as far as your question about the gross margin, most of it was in the merchandise margin line. We also had some expense savings in the DC line. And that's really from, as we said that, the inventories, I mean, they were on an average per store basis were down in the DCs and up in our stores. We're very comfortable with where the inventories landed.

So the DCs were processing closer to need and that gives us savings in our DCs on the processing side.

Next we will hear from Brooke Roach with Goldman Sachs. You may proceed.

Good morning and thank you for taking our question. With tariffs and supply chain top of mind, I was hoping you could elaborate on how you're thinking about your current exposure to direct imports from certain countries such as China and what impact a potential tariff scenario could have on your business, both in terms of inventory availability, but also costs to merchandise sourcing? Thank you.

Sure, Brooke. Obviously, something we're aware of, potential situations out there and all along we watch these things. We've also as you remember, we've dealt with this before a number of years ago. We are I would tell you this is one of the places where our model is such a benefit because our priority is maintaining our value gap, right, on our goods relative to the out the door retails at competition. So while we won't speculate on exactly what will happen with certain items or certain categories, if it does happen, we are set up to ensure that we maintain our value gap between us and the out the door.

No matter what those categories are that could get hit with tariffs, everything's relative. We will make sure our values are proportionately below them as they always have been. Again, we have the flexibility that we're not buying so far so far early and out. The other opportunity ironically that tends to surface in times like this is we could have other manufacturers or retails that do more of their own direct imports. And I know you mentioned our direct imports.

That's a very small portion of our business. And so that is and we've already a number of years ago started diversifying out of China. As an aside by the way on this topic as you know the bulk of our inventory is bought from to the it's back to the value gap that we retail those goods out relative to competition. So if a brand were to get hit with tariffs, increased tariff on a category and that brand had to raise their price and then that price gets carried on to another retailer, could that price on that one SKU for us be up a little? It might, but it will never be at any issue with the value gap that we have relative to the competition.

On the direct back to the imports, that's such a small number for us that we're really not concerned on that piece, same idea. I would say what was the last part of your question there, folks?

Just whether or not there is any benefits or opportunities that tariffs could present to your buying Oh,

yes, I'm sorry. So, with the vendors could bring in good

manufacturers could bring in goods early and what

that and this is what manufacturers could bring in goods early and what that and this is what happened last time, that could create, actually even additional availability of goods at advantageous prices for us because we can take advantage of that opportunistically. And that's as likely a scenario as anything. So once again, this is where the novel, the model when there's chaos out there in the market, a little bit that happens a little bit on certain categories, ultimately, usually that's an opportunity for us.

And then Brook, just to add on, you had questioned the supply chain. So we are anticipating a little bit of freight headwind in the 4th quarter, which we have reflected in our forecast.

Our next question will come from Lorraine Hutchinson with Bank of America. Your line is open.

Good morning. Thank you. Ernie, the comp continues to be driven by transactions. Can you talk to the composition of the new customers that you're gaining by age and income level? And any changes you've seen in recent quarters or signs of trade down in that customer cohort?

Right. No, great question, Lorraine. It's interesting, John, the team and our marketing team, we look at this all of the time. We have over the last few years started to more of our customers are skewing a little bit younger as consistent. We've talked about age 18 to 34 has been a growing segment for us.

This is good based on where we have kind of skewed our business. But I would like to emphasize interestingly Lorraine, one thing I always talk about is how we trade broadly. That's in terms of income and age, all right. And we recently have looked at our breakdown by the age groups and the income groups. And again, it's a competitive advantage for us.

We love the way we are balanced by age and income across every one of our banners. And we've recently looked at the new data on it. And yes, on some of the younger that's moved that way a little bit, it's still extremely in proportion to the different age groups balanced across against the general population. We love that because it allows us to continue to keep growing our customer base on all incomes and demographics as well as you know this, we're all about good, better, best in our product. And so we continue to emphasize that with our merchants, with the way we do our store formats.

We want to appeal to all different incomes and age groups. And so I think I answered your first question about where the growth has been on the customer. But what I would tell you is our objective is to continue, yes, to get younger customers. On the same time, unlike other retailers that kind of narrow in on their customer base from a demographics perspective, we are not doing that. We want to continue to trade broadly.

So if we get more younger, I still don't want us to give up the older age customers or the in between. And so, John, anything else you want to add

With our good, better, best strategy, we trade across all income demographics. And last quarter, we saw positive performance across all the income demographics categories that we track.

And what's I think neat and again for the future as we continue to expand is there is a convenience benefit. Not only do we create more of a treasure hunt by going after this wide range of cost wider than our competition. And I don't mean just off price competition. I mean all competition that tends to trade now where you and I have we've spoken about this many times. I think it's for the future, it continues to allow us to differentiate ourselves from the other retailers and to, when we enter our market, it creates convenience.

Not just creating treasure hunt entertainment type of shopping experience, it creates convenience. Because when somebody shopping in our store, especially for gifts even, you're having different levels of gifts, not just that one not at one age group, one income group. It allows somebody to have a convenient shopping experience as well as an unexpected what are you going to find shopping experience.

Next we will hear from Paul Lejuez with Citi. Please go ahead.

Hey, guys. Two quick ones. Curious if you can talk about whether your view of the consumer has changed versus the last time we heard from you 3 months ago, just given there have been some things that have changed on the macro since, just curious if you're seeing anything on the consumer? And then second, if you can just talk at a high level about how you're thinking on margin expansion opportunities or challenges in 2025, if you can give us an early peek into how you're thinking? Thanks.

I'll start and then I'll let Ernie chime in on the merchandise margin question. As far as the consumer goes, there's really no change in how we're viewing the consumer either by income demographic or by age. We again, as Ernie just mentioned, we're attracting more customers that are in that 18 to 34 age range, which we think is a definite plus when you think of the long term health of the business. But again, again, the merchandising strategies that Ernie has talked about over and over again, we feel that that again differentiates us from a lot of competitors and really gives a broad cross section of the population and interest to shop us.

Paul, I'll throw in 2 other things. I think this might also be helpful based on your question is what's changed since last quarter per se in the view on a macro scale. I don't know if this is a 1 quarter thing or over the last few quarters, but as you can see the health of our home business makes me continue to be very bullish in where we're headed in home. And I don't know if that's a macro trend. I know it probably is inconsistent when you look at the results of the home industry.

But I think on our end, we're seeing for our customer, obviously, you can see from the build. In fact, I am thrilled with what HomeGoods did this past quarter against a very big comp last year. I would say for our customers and by the way, we believe there we gain additional customers, there's a bit of an open to look for a fun, I would say, eclectic fashion home merchandise and an ever changing home assortment that that seems to be picking up over the last few quarters, I would say. Not necessarily Q2 to Q3, but I would say our Q3 versus 3 quarters ago. And you can see we talked about that a bit on the last call, but I'm feeling even more bullish quarter by quarter.

And we've been and I've been talking about it for a year now. And that team, I'm very proud of our home teams across the corporation. I'm talking the stores, the way they've put out the goods, but also our merchants have been so collaborative in the way they've executed from HomeGoods to Marmaxx to Europe, Canada, all the merchants in our home businesses have really been doing a nice job taking advantage of in our home businesses have really been doing a nice job taking advantage of what I think is a bit of a shift.

And then on the margin for next year, any thoughts?

We're not giving guidance today on the we're not prepared to give guidance for next year. I mean, we've been very consistent in saying that on a 3% to 4% comp, again, assuming no outsized expense increases and some merchandise margin approval, we can be flat to up 10 basis points. But the biggest lever we have is our top line growth. And when customers are searching for value, we believe our execution in the value we offer will continue to resonate with those customers. So we think that driving that top line is something that we will continue to do.

So again, we'll give guidance on the Q4 call for FY 'twenty six.

Our next question will come from Michael Binetti with Evercore. Your line is open.

Hey guys, great quarter. Thanks for taking our question. Maybe just to double click on Paul's question a little bit. As we think about the typical algorithm you guys speak to, I think last year's 2 to 3 comps with flat to 10 basis points of pretax on that. I know you don't want to get into guidance, but any items or puts and takes we should start thinking about qualitatively to consider with respect to what would be a normal year tariffs, labor or just the mix of business?

And John, you mentioned maybe there was a few thoughts that the international margins improvement you've been seeing lately could be more durable. I'm curious what you thought there. And then, Ernie, glad to hear your confidence on Marmaxx here in November. If you wouldn't mind just double clicking on it for a minute. What do you think is working?

Is that weather just getting out of the way and it always should have been better? Are you seeing the weather sensitive categories improve or are these early reads from the holiday categories?

Yes. I'll go and we'll start. I know that's your last part there, Michael. But yes, I think more of that. Again, we I think Marmaxx would have tracked better if the weather wasn't unseasonably warm.

And so now I think we're getting that weather picture out of the way here a bit and that's helping. As well as I think I talked about in the script, we have so many of our gift giving categories that are now hitting the stores. And if you look, I think now is a place, if you look typically at our Q4 where we've gained market share pretty steadily over a number of years. And I think there's a combination of the weather getting out of the way as well as Marmaxx is looking particularly strong from a mix perspective with gift giving and fresh goods that have been hitting. So I think it's both.

But thanks for that. We don't mind double clicking on that one.

Yes. And then just to get back to the first part of your question, last year we did have a number of one time items that gave us a little bit of a tailwind this year. So that's why this year on a 2 to 3 comp, we've been able to be excuse me, on a 3 to 4 comp, we've been able to be higher or flow more. There really isn't a lot this year that's impacted us. We don't see Spain next year as being a large headwind.

We're trying to be as cost effective as we can going into that market, leveraging as much as we can that European business. So again, I'd just go back to my upfront comment about where we see it until we have more detail for you on the Q4.

Next we will hear from Alex Straton with Morgan Stanley. You may proceed.

Perfect. Thanks a lot for taking the question. I wanted to focus in on HomeGoods again. Those initial comments were super helpful. Can you just talk about the profitability improvement there and how you guys have been able to drive that to such a nice level after a number of years of pressure?

And then just on the international kind of announcements and a number of entries or changes this year. Has something Or how are you guys thinking about that? Thanks a lot.

All right, Alex. Let me start with and then John will probably jump in on the HomeGoods margin. But if I can get to you on what you're asking, which I would figure this would be a question. The international expansions, we're at a bit of a junction here of where we have talent and you've heard me talk about this before. We've always had this great business model, but have wanted to be very careful and strategic about when we roll it out to not dilute our core businesses.

And so what happened is the time so the timing of our model along with entries into markets where nobody is doing a good job or even doing a job on off price has been surfacing at a time when we because of all of the tenure that we have in TJX, which I have to emphasize again, our management team's experience at all different levels from managers all the way up to top executives, we have tenure and experience across this corporation really like never before. So that's allowed me to really work with the teams and identify opportunities and then have a handful of people that were either coming out of their jobs, they could have been nearing retirement or wanted to do something a little different. And we've been able to utilize them to actually help us make these, I guess, joint ventures or investments or new business like in Spain. So, what really, Alex, has happened is we have more talent where I don't have to risk the core businesses to allow us to entertain and then actually get involved with these opportunities than we've ever had before. And so that's why you're seeing us do 3 different things internationally without taking away any focus or execution risk in our core businesses.

Does that make sense? So that's a conscious, really a conscious point of where we're at today. And I go back to, not just the benefit obviously for these new business ideas, there's the benefit for our core businesses that this corporation has so much talent across the board. I think that's a differentiator for us from other retailers is the longevity that we have.

TJX (TJX) Q3 2025 Earnings Call Transcript

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