TJX Reports Strong Q2 FY25 Results: Sales Growth and Profit Margin Up

The TJX Companies, Inc. (NYSE: TJX), a global leader in off-price apparel and home fashion retail, has reported impressive results for Q2 Fiscal Year 2025, showcasing notable growth across key performance metrics. With increased customer transactions, enhanced profit margins, and a significant milestone in store expansion, TJX continues to strengthen its market position.

Impressive Q2 Performance: Sales, Profit Margins, and EPS Growth

TJX delivered strong second-quarter results for FY25, exceeding expectations:

• Net Sales: $13.5 billion, a 6% increase over the same period in FY24.
• Comparable Store Sales: Increased by 4%, driven entirely by customer transactions.
• Net Income: $1.1 billion, with diluted earnings per share (EPS) rising to $0.96, a 13% increase from $0.85 in Q2 FY24.
• Pretax Profit Margin: 10.9%, up by 0.5 percentage points from the previous year.
• Gross Profit Margin: 30.4%, a 0.2 percentage point increase compared to last year.

TJX's strong Q2 results were largely attributed to strategic pricing, improved sales, and lower freight costs. These factors enabled the company to outperform its plan for the quarter.

CEO Ernie Herrman: Optimism for Future Growth

Ernie Herrman, CEO and President of TJX, expressed optimism about the company's future, highlighting strong sales and profitability, with all divisions experiencing growth in customer transactions. He emphasized TJX’s commitment to offering great value and exceptional merchandise to consumers, particularly as the company enters the fall and holiday seasons. Herrman also noted that the company opened its 5,000th store during the quarter, marking a significant milestone in TJX's global expansion.

Store Growth and International Expansion

TJX Expands to 5,001 Stores Worldwide

During Q2 FY25, TJX reached a major milestone by opening its 5,000th store. The company increased its total store count by 29, bringing the total to 5,001 stores across its various brands and regions, including the U.S., Canada, Europe, and Australia. This expansion reflects TJX’s strategic focus on growing its footprint in existing and new markets.

Investment in Brands For Less

As part of its international expansion strategy, TJX signed a definitive agreement to acquire a 35% ownership stake in Dubai-based Brands For Less (BFL) for approximately $360 million. BFL operates over 100 stores in the UAE and Saudi Arabia and has a growing e-commerce business. This investment provides TJX with a unique opportunity to penetrate the Middle Eastern market and leverage BFL's growth potential. The deal is expected to close by the end of FY25 and will positively impact TJX’s earnings starting in FY26.

Financial Performance by Division

Marmaxx and HomeGoods Lead U.S. Growth

• Marmaxx (U.S.): Reported a 7% sales increase with net sales of $8.4 billion. Comparable store sales grew by 5%.
• HomeGoods (U.S.): Sales increased by 4%, reaching $2.1 billion, with comparable store sales up by 2%.

International Performance: Steady Growth in Canada and Europe

• TJX Canada: Achieved a 2% increase in net sales to $1.2 billion, with 4% growth on a constant currency basis.
• TJX International (Europe & Australia): Saw a 4% increase in net sales to $1.68 billion, driven by steady performance in Europe and Australia.

Cash Flow and Shareholder Returns

Strong Cash Flow and Share Repurchases

TJX generated $1.6 billion in operating cash flow during Q2 FY25, ending the quarter with $5.3 billion in cash. The company returned $982 million to shareholders through stock repurchases and dividends. TJX plans to repurchase between $2.0 and $2.5 billion worth of stock by the end of FY25, demonstrating its commitment to returning value to shareholders.

Outlook for Q3 and Full Year FY25

Increased EPS and Profit Margin Guidance

TJX has raised its guidance for full-year FY25, expecting consolidated comparable store sales to increase by approximately 3%. The company also increased its pretax profit margin outlook to 11.2% and projects diluted earnings per share to be between $4.09 and $4.13 for the fiscal year.

Looking ahead to Q3 FY25, TJX anticipates a 2-3% growth in comparable store sales, with diluted EPS expected to range from $1.06 to $1.08.

Source: TJX