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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' Q4 fiscal 2026 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you do have a question, you may press star one. As a reminder, this conference is being recorded February 25, 2026. I would like to turn the conference over to Mr. Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc. Please go ahead, sir.

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

Thank you, Ernie. 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 investor 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 investor section of tjx.com, along with reconciliations to non-GAAP measures we discuss. Thank you. Now I'll turn it back over to Ernie.

Good morning. Joining me and Deb on the call is John. I want to start today by acknowledging our global associates for their excellent work in 2025. I truly appreciate their ongoing commitment to both TJX and our customers every day. Now, to an overview of our results, beginning with the Q4. I'm extremely pleased with our excellent Q4 results. Q4 sales, profitability, and earnings per share were all well above our expectations. Overall, comp sales were up a very strong 5%, with comp sales strength at each of our divisions. I am convinced that our exciting assortment of merchandise and great values resonated with shoppers across all of our retail banners this holiday season.

Further, our teams did an excellent job transitioning our stores post-holiday to the categories and trends that appealed to consumers, and I am confident that our merchandise mix positions us well as we start the year. For the full year, overall net sales surpassed $60 billion, making a major milestone for our company. We are even more excited about the future and the global opportunities we see to keep growing our customer base and to capture additional market share by bringing excitement to shoppers with our values. Full-year comp sales increased a very strong 5%. Profitability increased significantly, and earnings per share grew double digits, all well above our initial guidance for the year. Importantly, we are confident that we attracted new shoppers to our stores in every country that we operate in.

I want to again recognize the excellent execution of our teams and the collective efforts of our associates across the company, which led to this terrific performance in 2025. As we begin 2026, the Q1 is off to a strong start. We have many initiatives planned that we believe will keep driving sales and traffic this year. We remain confident that in-store shopping is not going away and believe our focus on offering customers an exciting treasure hunt shopping experience every day will continue to serve us well. Additionally, we are always looking at ways to further improve our in-store shopping environment and remain committed to investing in store remodels and new prototypes that we believe will enhance the customer shopping experience.

In fact, I believe that our organization has done such a great job in this area that it has helped drive the remarkable consistency of comp increases across our store base. Availability of quality branded merchandise in the marketplace continues to be outstanding, and we are in a terrific position to flow a fresh assortment of goods to our stores and online this spring and throughout the year. Longer term, we're convinced that the flexibility of our business and our unwavering commitment to value will continue to be a winning retail formula. I'll speak more about our performance and our confidence in gaining additional market share over the long term in a moment. But first, I'll turn the call over to John to cover our Q4 and full-year financial results in more detail. John?

Thanks, Ernie. I also want to add my gratitude to all of our global associates for their hard work and commitment to TJX this year. I'll share some additional details on the Q4. As I recap our Q4 results, I'm gonna speak to everything on an adjusted basis, which excludes the net impact from a litigation settlement related to the credit card interchange fees and the related expenses associated with that settlement. Reconciliations detailing the net impact of these settlement-related items on our results can be found in today's press release and on the investor section of our website. Net sales grew to $17.7 billion, a 9% increase above last year. As Ernie mentioned, our Q4 consolidated comp sales increased 5%, which was well above our plan and on top of a 5% increase last year.

I wanna note that our quarterly comp was trending higher prior to the winter storms that swept across North America at the end of the quarter. Importantly, we saw sales pick up again after the storms passed. Our Q4 comp was driven by a combination of a higher average basket and an increase in customer transactions. Further, we saw strong comp sales increases in both our apparel and home categories, as we have all year long. Adjusted pre-tax profit margin at 12.2% was up 60 basis points over last year's 11.6%, and well above our plan. Adjusted gross margin was 31.1%, up 60 basis points over last year's 30.5%. This increase was primarily driven by a higher merchandise margin and expense leverage on sales, partially offset by unfavorable inventory hedges.

Adjusted SG&A was 19.1%, favorable 10 basis points versus last year's 19.2%. Net interest income negatively impacted pre-tax profit margin by 10 basis points versus last year. All of this led to adjusted diluted earnings per share of $1.43, up 16% over last year's $1.23, and well above our plan. Q4 adjusted pre-tax profit margin and adjusted diluted earnings per share were both well above plan. This was primarily due to lower shrink and expense leverage on above-plan sales, partially offset by higher incentive compensation accruals. As for our divisional performance in the Q4, each of our divisions saw comp sales growth of 4% or better and had strong adjusted segment profit margins. To our fiscal 26 results.

Once again, for our full year financial results, I'm gonna speak to everything on an adjusted basis, which excludes the net impact from a litigation settlement related to credit card interchange fees and the related expenses associated with that settlement. Net sales grew to $60.4 billion, a 7% increase over last year. Consolidated comp sales were up 5% and driven by both a higher average basket and an increase in customer transactions. Adjusted pre-tax profit margin was 11.7%, up 20 basis points over last year's 11.5%. Full year adjusted gross margin was 31%, up 40 basis points over last year's 30.6%. This increase includes a 20 basis point benefit from shrink favorability. We once again saw shrink favorability across all of our segments.

I want to take a moment to acknowledge the outstanding efforts of our associates, who worked hard all year long to drive this improvement. I'm also pleased to share that shrink is essentially back to our pre-COVID level. We believe this speaks to our culture of working to quickly address issues that come up and our commitment and laser focus on fixing them. Full year adjusted SG&A was 19.5%, 10 basis points unfavorable to last year's 19.4%. Net interest income negatively impacted full year pre-tax profit margin by 10 basis points versus last year. All of this led to full year adjusted diluted earnings per share of $4.73, up 11% over last year's $4.26. Ernie will talk about our full year divisional highlights in a moment. Moving to inventory.

Balance sheet inventory was up 14%, and inventory on a per store basis was up 10%. We feel great about our inventory levels and the excellent availability we are seeing in the marketplace. I'll finish with our liquidity and shareholder distributions. For the full year, we generated $6.9 billion of operating cash flow and ended the year with $6.2 billion in cash. In fiscal 26, we returned $4.3 billion to shareholders through our buyback and dividend programs. I'll turn it back to Ernie.

Thanks, John. I'll cover some full year divisional highlights. I'm extremely pleased with the strong and consistent sales performance across each of our divisions. All of our businesses delivered comp sales growth of 4% or better this year. Importantly, each division drove increases in customer transactions and attracted new shoppers throughout the year. I truly believe our value proposition appeals to a wide customer demographic across our retail banners, which differentiates us from so many other major retailers. I am convinced that each of our divisions is set up extremely well to continue capturing market share around the world for many years to come. At Marmaxx, overall sales for the full year grew to $36.6 billion. Marmaxx's comp sales grew a strong 4%, with increases in both their apparel and home categories.

Further, comp sales were up across each of Marmaxx's regions and consistent across all customer income demographics. At Sierra, we were very pleased with their performance as they delivered healthy sales growth while accelerating their store openings across the United States. Additionally, our U.S. online businesses continued to add new categories and brands to deliver even more freshness and excitement for our e-commerce shoppers. As to Marmaxx's profitability, adjusted full-year segment profit margin increased to an outstanding 14.4%. Going forward, we are very excited about the opportunities we see to open more stores, attract more shoppers, and increase sales at our largest division. At HomeGoods, annual sales surpassed $10 billion, a great milestone in this division. Comp sales increased a very strong 5%, with broad strength across all regions of the country.

During the year, we opened 27 stores for this division, bringing our eclectic mix of home fashions to even more consumers across the United States. As to profitability, HomeGoods' full-year adjusted segment profit margin increased to an outstanding 12%. Long term, we see plenty of opportunities for HomeGoods and HomeSense to capture an even bigger share of the United States home market. At TJX Canada, full-year sales increased to $5.6 billion, and comp sales increased an outstanding 7%. It was great to see consistent and strong performance at all three of our Canadian retail banners, which each delivered similar comp increases. Adjusted segment profit margin on a constant currency basis increased to a strong 13.8%.

Through our Winners, Marshalls, and HomeSense banners, we are one of the top destinations for apparel and home fashions in Canada. We continue to see a long runway for growth and are excited to further grow our footprint across this country. At TJX International, full-year sales grew to $8 billion, and comp sales increased a strong 4%, with strength in both Europe and Australia. In Europe, we are the largest brick-and-mortar off-price retailer and believe our size and scale allow us to offer consumers an unmatched mix of merchandise at great value. Further, we are on track to open our first stores in Spain this spring and are excited to deliver our values to more shoppers in Europe. In Australia, sales were once again outstanding, and we continue to open stores across the country.

As to profitability, I am extremely pleased with the TJX International Division's improvement in 2025. Adjusted segment profit margin on a constant currency basis increased significantly to 7.3%. Going forward, we are confident that we can continue capturing more shoppers in each country that we operate in. We continue to be very pleased with our joint venture in Mexico and minority investment in the Middle East. In Mexico, we've made excellent progress on the merchandising side of the business and continue to see opportunities to further optimize the store assortment. In the Middle East, Brands For Less stores continue to perform well, and they have plans to continue opening stores across that region. We're excited to be participating in the growth of off-price in these regions of the world.

Moving on, I'd like to highlight some of the key reasons why we are confident that we can continue to grow our company and gain market share around the world for well into the future. First is our relentless focus on delivering value for our customers every day. Availability of merchandise continues to be exceptional, as our team of more than 1,400 buyers source from a universe of approximately 21,000 vendors every year, including thousands of new ones. We have developed very strong relationships with our vendors and believe they look to us to clear their excess inventory and to grow their business and introduce their brands to new customers. This gives us great confidence that we will have plenty of access to goods going forward, and that we are in an excellent position to continue bringing shoppers joy and terrific value every time they visit.

Second, we believe our strategy of operating stores across a wide customer demographic will continue to serve us well. With outstanding access to good, better, and best merchandise, we can curate our stores with an assortment that appeals to various income and age demographics. This allows us to reach a broad range of shoppers, which we believe differentiates us from many other major brick-and-mortar retailers. We continue to see an outsized number of new, younger customers visiting our retail banners at each of our divisions. All of this gives us confidence that we can continue to open stores in new markets in each of our geographies. This leads me to my next point, which is the significant opportunity we see to grow our global store base. We see the long-term potential to grow to 7,000 stores with our existing retail banners in our current countries and Spain.

We have an excellent track record of opening stores in the right locations, in the right markets, and are convinced that we will continue to do so. With the long-term opportunity to open 1,700+ additional stores globally, we see a very strong path ahead for continued global growth. Fourth, we believe we are a retail leader in flexibility. Our business is centered around being flexible, including our buying, our store formats, and our supply chain and systems. This allows us to quickly pivot to take advantage of hot categories and trends in the marketplace and get the right goods to the right stores at the right time, which we believe drives shopper excitement when they visit. Going forward, we are confident that our flexibility will allow us to successfully navigate ever-changing macro environments and economic landscapes, just as it has throughout our 50-year history.

Lastly, I am convinced that the strength of our talent and our focus on culture have been major contributors to our success and will continue to drive the business for many years to come. I truly believe that the tenure, depth of expertise, and off-price knowledge of our teams are unmatched. Further, we continue to invest in teaching and training our associates to develop the next generation of TJX leaders. I am confident that our global talent base and consistency of our culture will be tremendous advantages as we continue our growth around the world. In closing, we feel great about our terrific performance in 2025. We are confident in our plans for 2026, and as always, we will strive to beat them. Our value perception remains very strong.

I am convinced that our focus on value and delivering an exciting treasure hunt shopping experience will continue to bring joy to shoppers around the world. I am so excited about the growth opportunities we see in both the near and long term, and I'm confident we can achieve them. The entire TJX team is laser-focused on executing our business model to grow our top and bottom lines, and to continue our global growth, and to capture additional market share. Now I'll turn the call back to John to cover our full year and Q1 guidance, and then we'll open it up for questions.

Thanks again, Ernie. I'll start with our full year fiscal 2027 guidance. We are planning overall comp sales growth of 2%-3%. For the full year, we expect consolidated sales to be in the range of $62.7 billion-$63.3 billion, up 4%-5%. We're planning full-year pre-tax profit margin to be in the range of 11.7%-11.8%, flat to up 10 basis points versus last year's adjusted 11.7%. Moving to full year gross margin, we expect it to be in the range of 31.1%-31.2%. This will be up 10-20 basis points versus last year's adjusted 31%, due to an expected increase in merchandise margin.

We are expecting full year SG&A to be 19.5%, flat versus last year's adjusted 19.5%. We're expecting incremental store wage and payroll costs to be offset by lower incentive compensation accruals this year. We're planning net interest income of $76 million, which we expect to delever fiscal 2027 pre-tax profit margin by 10 basis points. Our full year guidance assumes a tax rate of 25.0% and a weighted average share count of approximately 1.12 billion shares. As a result of these assumptions, we're expecting full-year diluted earnings per share to be in the range of $4.93-$5.02, up 4%-6% versus last year's adjusted $4.73.

Lastly, I wanna mention that we are evaluating the potential impact of last Friday's ruling on tariffs and monitoring the changing tariff environment. That said, our full year guidance assumes that we will be able to offset the tariff pressure on our business this year. Moving to the Q1. We're planning overall comp sales to increase 2%-3%, consolidated sales to be in the range of $13.8 billion-$13.9 billion, up 5%-6%. Pre-tax profit margin to be in the range of 10.3%-10.4%, flat to up 10 basis points versus last year's 10.3%. Gross margin to be in the range of 29.9%-30%, up 40-50 basis points versus last year's 29.5%.

This would be due to an expected favorable inventory hedge comparison to last year and an expected increase in merchandise margin. SG&A to be 19.8%, 40 basis points unfavorable versus last year's 19.4%. This would be primarily due to incremental store wage and payroll costs. We're also planning net interest income of $22 million, which we expect to have a neutral impact to our year-over-year Q1 pre-tax profit margin. Our Q1 guidance also assumes a tax rate of 23.1% and a weighted average share count of approximately 1.12 billion shares. Based on these assumptions, we expect Q1 diluted earnings per share to be in the range of $0.97-$0.99, up 5%-8% versus last year's diluted earnings per share of $0.92. Moving to our fiscal 2027 capital plans.

We expect capital expenditures to be in the range of $2.2 billion-$2.3 billion. This includes opening new stores, remodels, and relocations, as well as investments in our distribution network and infrastructure to support our growth.

For new stores, we plan to add 146 net new stores, which would bring our year-end total to well over 5,300 stores. This would represent a store growth of about 3%. In the U.S., our plans call for us to add 45 net new stores at Marmaxx, 35 new stores at HomeGoods, which includes 11 HomeSense stores, and 24 new Sierra stores. In Canada, we plan to add 13 new stores. At TJX International, we plan to add 19 net new stores in Europe, which includes our first 5 stores in Spain and 10 new stores in Australia. Lastly, we're planning about 540 remodels and plan to relocate approximately 40 stores in fiscal 2027. As to our fiscal 2027 cash distribution plans, we remain committed to returning cash to shareholders.

As we outlined in today's press release, we expect that our board of directors will increase our quarterly dividend by 13% to $0.48 per share. Additionally, in fiscal 2027, we currently expect to buy back $2.5 billion-$2.75 billion of TJX stock. In closing, I want to reiterate that we are excited about the growth opportunities we see in the 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're happy to take your questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please unmute your line and press star one. You will be prompted to record your name. To withdraw your question, you may press star two. Again, press star one to ask a question, and one moment, please, for our first question. Our first question comes from Lorraine Hutchinson. You may ask your question.

Thank you. Good morning. Ernie, can you update us on pricing actions that you've taken? How is the customer reacting to some of the higher ticket prices? Is that reaction any different for different demographics?

A great question, Lorraine. First of all, it's all done along with knowing what the out-the-door retails are at competition around us, right? When we, on an existing item, if that price is moving around us, we want to ensure that we're maintaining the appropriate value gap, we could take a pricing action where it's changed. It's not, I wanna call out that it's been selective on certain categories or items. We've have when you call pricing action, where if you're referring to sometimes, you know, our ticket is going up, right? That can also be pricing action related to a change in our mix, or you might that shows up as maybe an average retail change because our mix is changing.

For example, we in Marmaxx, for Q4, had a lot of better goods at higher prices. That had nothing to do with what we would have had before. It was a change in the mix, and so there, the prices went up on certain items. It's a combination of a couple things. We have not seen, I think, Lorraine, when you were asking at the beginning. We have had very consistent success across the board, as you can see from our business. Our turns are all representative of our value. Our out-the-door value is still exceptionally strong. We do the survey. We always, and I think I've talked about this before, we do surveys to ensure customer perception of the value is still where in fact, it's actually improved over the last six months.

The neat thing about our model is we don't dictate, in many cases, the retail change. We kind of follow the market. When the market moves, down or up on an item, we wanna maintain the proportional gap in value, exciting gap in value, and we'll adjust and take an action accordingly. I hope I answered your question there.

Thank you, our next question comes from Matthew Boss. Your line is open. You may ask your question.

Thanks, congrats on another nice quarter.

Ernie, what's your ability to further accelerate your offense globally? If we're thinking about this year, maybe to take advantage of disruption in the marketplace, whether that's from tariff volatility and what it's doing to sourcing and supply chains or even the consolidation that's happening at luxury retail. I've got to ask my near-term question, which is: Could you just elaborate on the strong start to the Q1? Have you seen any moderation relative to the Q4 at any of your segments?

That's very good, Matt. Let me start with your first question first, on the offense, because, by the way, I can't, you're like a mind reader here because I was going to talk about some of the things we're doing that I think we're in a mode right now where the consumer is so open to trying new venues, as clearly they've been disappointed in some of their in-store shopping experience or merchandise content at various other retailers. I believe our teams have taken advantage of that. Let me give you a few things that are offensive plays, because this is why when you asked the question, I was thinking, Man, this is exactly one of the things I was hoping to talk about.

First of all, on offense, we want to continue to drive our top line, right? We feel as though the customer's really open to trying other things. Our marketing, and we talked about this at our last meetings and a couple times during the year, our marketing teams are very aggressive. We are using marketing as an offensive weapon more than we ever have before. In fact, I don't know if you've noticed, we have a new campaign in HomeGoods that just launched. We have a new campaign in T.J.Maxx that will be, and in Sierra, that are gonna be launching in the near term. We've been doing things like we've had Maxx linked up with the Olympics, had great promotions, promotional spots with the Olympics.

We are on all the fronts, we're using marketing mix modeling methodology there to look at where are we driving top line with our marketing approach. This is a very sophisticated approach that I think I've also talked about before, which the teams have been all over the last few years. But they are ramped up on this even greater so in fiscal 27, to continue to look at where we're spending and what the creative is like to try to capture, you know, additional market share. Secondly, we are going after brands, I would say, in a in a, in this, more aggressive manner than we also have ever had before. We mean more to the branded vendor community than ever, as witnessed by some of the closures you're talking about.

Our teams are doing a lot more regular meetings with some of the key brands through various levels of their management, with our management. That's not been something that we're initiating all the time. It really comes from a lot of the vendors because they want to do business with us. That's across Matt, good, better, and best product. That's been key. The other thing John mentioned it when he mentioned remodels, store environment. Again, all under the heading and playing offense. You start with marketing. You want the exciting I wanna get them in the stores. When they're in the store, I wanna give them the most exciting value mix possible. That's what we're doing with the branded merchandise market. By the way, availability is off the charts.

I think I mentioned outstanding in the, and I know you guys like to have fun with whatever wording we're using, but today it's outstanding and off the charts. In all seriousness, we're having to slow the buyers down to a large degree in every division that we're operating in. That's telling us something on availability. Store shopping experience, we're very aggressive about testing new remodels. I'm sorry, new prototypes, and being aggressive about refreshing our stores, because that is one of the ways John and I talk about it all the time. That's one of the ways we continue to drive consistent comps across all of our regions and stores, you know, in the world.

When you have 5,000+ stores, it would be easy to let some of that investing go by the wayside, and you could fall, deteriorate in your comp sales. Also another one we play offense on, again, I love your question, sorry, I'm going on, is store payroll. We believe playing offense in our store. I give a lot of credit to our field management. The directors of stores in TJX all are strong believers in staffing our stores to play offense. Get the goods on the floor, take the markdowns aggressively, get the merchandise out where the customers can get at it in a very organized, pleasant shopping experience. Get the customers through the register, and I think that's all part of playing offense, and it shines against what some of the other retailers are doing today.

I think that's, I think that sums up offense. John, you want to on?

On your second part of your question regarding the strong start, again, a lot of what Ernie has talked about here, just the focus on execution. Customers continue to look for value, and our store locations are some, are a place that they're very pleased when they come in. We're just seeing a continuation of strong performance.

Yeah, Matt, to piggyback on John, is another thing that we analyze and the marketing team is also terrific at feeding to John and me, information on income demographics, age demographics. Right, John?

Very, very balanced. We look at basically above 100 and below 100,000.

... U.S., and it was the same comp, both above and below.

By geography, was very consistent in the Q4. It just very consistent performance across all of our divisions.

Another highlight there also is that we skew, versus the general population, we skew and have been, because of some of the new customer acquisitions over the last couple of years, we're skewing a notch younger than the average customer. You know, when you take 18 to 34, and age 35 to 54, and 55 plus, we skew a little younger than the general population, which is, I think, bodes well for our future.

Thank you. Our next question comes from Paul Lejuez. Your line is open. You may ask your question.

Hey, thanks, guys. SG&A leverage came in a little bit lighter than I think what you guided to, despite higher sales. Just curious if you could talk about the flow-through and maybe what the offsets, what drove less leverage than you might have expected, if there was something with The TJX Foundation or incentive comp, marketing. Just second, if you could talk a little bit more about traffic versus ticket, or transactions versus ticket by segment, and how you're thinking about those metrics as the drivers of that 2%-3% comp assumption for 2027. Thanks.

Yeah, on your first question, the Q4 SG&A, compared to our guidance, is essentially the incentive accrual, plain and simple. As far as the traffic and the ticket, both of them were up in the quarter. I would say that across all of our divisions, transactions were up, with the exception of HomeGoods, which was essentially flat. Prior to the storm that swept across the U.S. late in January, HomeGoods transactions were running up. When I look at the driver, the bigger impact was the basket, and within that was average retail that did drive that basket increase. Again, we've seen this, you know, over the last couple quarters, so it's nothing new.

We're quite pleased that, again, that we continue to see customers, you know, the transactions...

... Traffic through our store. To Ernie's point, you know, between the advertising, the age of the customer-

it just, it's leaning into the product mix that we have in our store, and customers are quite happy.

Yeah, Paul, I think the to John's point, and HomeGoods, it was only in Q4. For the year, HomeGoods was still up a little bit in.

... In transactions. I think one of our reasons and I think you mentioned what's helping, you know, what would we be confident in helping the 2%-3% on the combination of basket and ticket. I think the route that we look at here, again, we're different from traditional retailers. This good, better, best combination, the teams and myself were, in fact, yesterday, with one of the senior leaders at Marsh, we talked about that balance. The word balance, I always like to leave you with, is one of the things that I think our teams do the best, which is they balance good, better, best.

They balance even within those, having the right looks, not having fashion and balance to basic and balance to, you know, contemporary looks in home, in a department, versus basic traditional looks, things like that. The ticket, we don't purposely, top down, drive an average retail situation, or we do it off the value and then driven by having good, better, or best and having a mix within each. That's what gives us a lot of faith that we can meet or actually exceed our going forward plans.

Yeah, Ernie, if you were to exceed that 2%-3%, do you think it's more likely to come from more transactions or ticket? Is there one you would favor and expect it to be?

It's hard for us to predict that going forward. It's based on, you know, the customers.

Yeah. Right now, all I would say, without talking about going forward, is it's just kind of a mix of all of those. There isn't one thing that, if you look over this past year, it was. Right, John? It was kind of a mix of ticket and basket and transactions.

I think once again, like for us, I think that's a good way for us to not plan on any one of those components.

... To us, it really doesn't matter whether it's coming from the basket or the transactions, as long as they're both healthy.

Thank you. Our next question comes from Brooke Roach. Your line is open. You may ask your question.

Good morning. Thank you for taking our question. How favorable was the stronger AUR in margin delivery in the quarter? Looking forward, can you speak to the drivers of merchandise margin improvement that you're forecasting for the year, and the most important areas of opportunity that you see there within the business?

As far as a stronger AUR, you know, we really don't parse that out. I mean, we basically said it when we talked about sales that it so for the quarter, it was more the basket than the transactions that drove the comp, and within that, it was the average retail that drove that. We can't really parse out any more of that.

Then as far as merchandise margin. Yeah. Brooke, in other words, are you asking how are we delivering the merchandise margin improvement, or is that what you're getting at?

I'm asking what the forward merchandise margin improvement is based on, where you see the biggest opportunity.

Oh, okay. Well, one of the biggest opportunities is a couple of things going on in the market, which is good for us. First of all, we have the flexibility to bob and weave with a truly glutted market of merchandise, which allows us to wait out which buys are the best buys. Again, when you have 1,400 buyers in all these locations, so many of the buyers can cover so many categories, and the teams, our merchants are trained to know that we don't have a commitment to have to have anything in stock.

When you operate under that premise, our merchants are able to say: I'm gonna go for the most exciting buy for the customer that delivers the healthy merchandise margin at the same time. We can negotiate it that way. This is really part of the secret sauce, where we're different, I think, than many other retailers, because we have so many tenured merchants here. Again, I mentioned that in my speech. We have a university, we have training. Also our buyers are most of the time getting the first call on excess inventories because the market likes to deal with our buyers. They're straightforward, they're courteous, they're good to deal with.

Yep, pay on time, fair. Now you take those into account, you have a blooded market. By the way, we're in a very good liquidity position as we enter the year, I'm loving that. You know, again, we're off to a strong start, sales-wise. The only thing that could make that better, which is what we have right now, is a really strong liquidity positioning. Every banner is in good shape on their liquidity. In fact, we've recently talked about that. That always bodes well.

As an aside, this isn't key, is when there's confusion, you know, with the whole tariff thing or in and out, generally, one way or the other, I think you've covered us long enough to know, indirectly, our buyers are very good at navigating through that, usually, we figure out a way to benefit in terms of our merchandise margin situation when there's confusion out there, which obviously, you know, that's probably going to happen again. Thank you for your question on that, though. I think it's spot on. I think, by the way, this is how we also drive top line, not just margin, because when those buys benefit us both ways, merchandise margin, but they benefit us on driving sales with a more balanced, exciting value mix.

TJX (TJX) Q4 2026 Earnings Call Transcript

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