TJX delivered a quarter that aligned with Wall Street’s main expectations, posting growth in comparable store sales and profitability across its core divisions. Management pointed to higher average basket sizes and increased customer transactions as key contributors, with both apparel and home categories showing notable momentum. CEO Ernie Herrman highlighted the company’s ability to attract value-conscious shoppers across various demographics, stating, “Our value proposition continued to resonate with consumers in the United States, Canada, Europe, and Australia.” Lower freight costs and effective expense management also contributed to margin improvements, offsetting external cost pressures such as tariffs.
Is now the time to buy TJX? Find out in our full research report (it’s free for active Edge members).
TJX (TJX) Q3 CY2025 Highlights:
- Revenue: $15.12 billion vs analyst estimates of $14.9 billion (7.5% year-on-year growth, 1.5% beat)
- EPS (GAAP): $1.28 vs analyst estimates of $1.22 (5% beat)
- Adjusted EBITDA: $2.20 billion vs analyst estimates of $2.08 billion (14.6% margin, 5.7% beat)
- EPS (GAAP) guidance for the full year is $4.65 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 12.5%, in line with the same quarter last year
- Locations: 5,191 at quarter end, up from 5,057 in the same quarter last year
- Same-Store Sales rose 5% year on year (3% in the same quarter last year)
- Market Capitalization: $169.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From TJX’s Q3 Earnings Call
- Brooke Roach (Goldman Sachs) asked about drivers behind comp sales momentum and plans for pricing into the holiday season. CEO Ernie Herrman cited the unique value proposition and ongoing focus on maintaining a price gap below competitors, while John Klinger noted basket growth driven by ticket size.
- Paul Lejuez (Citi) inquired whether higher basket sizes were due to price increases or product mix, and about demographic trends. Herrman and Klinger responded that selective price increases, aligned with broader market moves, played a role, but value perception remained strong across all income groups.
- Alex Straton (Morgan Stanley) questioned gross margin guidance for the next quarter and the company’s AI strategy. Klinger attributed margin trends to annual shrink adjustments, while Herrman detailed AI use in fraud, HR, and marketing, stressing a cautious, tailored approach.
- Matthew Boss (JPMorgan) sought clarity on new customer acquisition versus expanded basket size at Marmaxx and the outlook for the holiday quarter. Herrman highlighted balanced growth in both new and existing customers, with strong inventory positioning underpinning confidence.
- Lorraine Hutchinson (BofA) asked about categories where price increases were less successful and the company’s ability to pivot. Herrman noted that only one category required a pricing rollback, emphasizing the company’s data-driven and responsive approach.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will closely track (1) the effectiveness of TJX’s holiday marketing campaigns and gifting initiatives, (2) the company’s ability to sustain same-store sales momentum amid broader retail headwinds and competitive pressures, and (3) the ongoing execution of tariff mitigation strategies and flexible inventory management. Supply chain efficiency and signs of traffic growth across key banners will also be critical markers of progress.
TJX currently trades at $152.75, up from $145.58 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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