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Amid a tough business climate for retailers, TJX (TJX) continues to thrive, achieving strong financial results that indicate that the owner of the HomeGoods, TJ Maxx, and Marshall brands continues to gain market share. Earlier this morning, the off-price retailer reported upside 2Q25 results and raised its FY25 guidance, while CEO Ernie Herrman stated that Q3 is off to a strong start. Clearly, the back-to-school shopping season has been a success for TJX as its lower prices and newer/on-trend product assortments resonate with both parents and kids alike.

• The top and bottom-line beat is great, but the metric that really stands out to us is TJX's same store comps. On a blended basis, comps came in at +4%, exceeding TJX's guidance of +2-3% and beating analysts' expectations. Like last quarter, the growth was entirely driven by transactions, illustrating the strength of its brands.
  • Marmaxx, which combines TJ Maxx and Marshalls and is the company's largest segment, performed exceptionally well with comps increasing by 5%, despite lapping growth of 8% in the year-earlier period.
  • Despite a sluggish demand environment for the home decor category, HomeGoods still posted a positive comp of +2% for the quarter.
• Another notable metric is pretax profit margin, which improved by 500 bps yr/yr to 10.9% and is well above the company's plan. In addition to the solid sales growth, lower freight costs helped drive pretax margin higher.
• If there is any blemish, it's that TJX's Q3 EPS guidance of $1.06-$1.08 fell a bit short of expectations. However, the company has a tendency to guide conservatively, so investors are taking the downside guidance in stride. For instance, last quarter, TJX guided for Q2 EPS of 0.88-$0.94 -- which missed expectations -- but the company ultimately surpassed that outlook as EPS came in at $0.96.
• The Q2 results and guidance aren't the only news items of the day for TJX. In the earnings press release, the company announced that it signed an agreement to make a $360 mln investment in Dubai-based off-price retailer Brands for Less (BFL). The 35% ownership stake is only a minority position, but the investment provides TJX with exposure to the off-price retail market in the Dubai region with minimal risk. Beginning in FY26, the investment in BFL is expected to be slightly accretive to EPS.

The main takeaway is that TJX's brands are really resonating with consumers, including younger shoppers who are seeking higher quality products at affordable prices. A trade-down effect from more expensive retailers is also helping TJX to gain market share. Unless macroeconomic conditions seriously deteriorate, TJX should continue to flourish as consumers continue to tighten their spending budgets.