The TJX Companies (NYSE: TJX) delivered a quarter that off-price retail bulls will point to for the rest of the year. On May 20, 2026, the parent of TJ Maxx, Marshalls, HomeGoods, Sierra, Winners, and TK Maxx reported first-quarter fiscal 2027 net sales of $14.3 billion, up 9% year over year, with consolidated comparable sales up 6% — well above the company’s own plan and roughly double last year’s Q1 pace. Diluted earnings per share came in at $1.19, a 29% jump from $0.92 a year earlier.
Pretax profit margin expanded 170 basis points to 12.0%, the kind of operating leverage that has separated off-price from the rest of softlines for years. CEO Ernie Herrman called out “broad comparable sales gains, higher customer transactions and improved margins” across every division — and management raised FY27 guidance across sales, margin, EPS, and the buyback envelope.
The Quarter, By the Numbers
| Metric | Q1 FY27 | Q1 FY26 | YoY |
|---|---|---|---|
| Net sales | $14.32B | $13.11B | +9% |
| Comp sales | +6% | +3% | — |
| Gross margin | 31.3% | 29.5% | +180 bps |
| Pretax margin | 12.0% | 10.3% | +170 bps |
| Diluted EPS | $1.19 | $0.92 | +29% |
| Net income | $1.3B | — | — |
| Capital returned | $1.1B | — | — |
Every Division Comped Positive
The cleanest read on TJX’s quarter is that it wasn’t one banner doing the heavy lifting. Every division comped positive, every division grew transactions, and the home concept that struggled across the broader market actually accelerated.
HomeGoods at +9% comp stands out. The home category has been a soft spot across mainstream retail since the post-pandemic furniture pull-forward unwound. TJX’s price model, which lets it offer branded home goods at meaningful discounts to specialty stores, appears to be drawing customers back — net sales at HomeGoods US grew 11% to $2.51 billion. Marmaxx, the flagship U.S. apparel block (TJ Maxx, Marshalls, Sierra), pulled in $8.65 billion of sales on +6% comps. Canada added $1.29 billion at +7%. The European and Australian operations comped +4%, slower than the U.S. but still solid against a tougher consumer backdrop overseas.
Where the Margin Came From
The 180-bps jump in gross margin to 31.3% — the line that ultimately drove the EPS beat — came from three places, per the company: better merchandise margin, favorable inventory and fuel hedges, and expense leverage on above-plan sales. SG&A rose only 10 bps to 19.5% of sales, so virtually all of the gross-margin gain flowed through to the pretax line. That’s an unusually clean print.
Inventory matters too. Total inventories ended the quarter at $7.7 billion, up from $7.1 billion a year ago, with constant-currency per-store inventory up 6%. Management was explicit about why: “We are well-positioned to take advantage of the outstanding availability of quality merchandise and flow fresh assortments to our stores and online this spring and summer.” Translated: there is plenty of branded inventory floating around the wholesale channel, and TJX is buying it.
Capital Return: $1.1B Out the Door, More Coming
TJX returned $1.1 billion to shareholders in Q1 alone — $604 million in buybacks (3.8 million shares) and $471 million in dividends. The company ended the quarter with $5.6 billion of cash and $1.1 billion of operating cash flow.
More importantly, management raised the FY27 buyback range to $2.75–$3.0 billion. That sits on top of an already-generous dividend program, and signals confidence that the off-price model is generating cash faster than it needs to reinvest in stores or systems. For comparison, TJX has spent the past five years steadily expanding its global footprint — ending Q1 at 5,262 stores after adding 48 net new locations in the quarter — without straining the balance sheet.
Guidance: Raised, But Not the Full Beat
The raised outlook is the headline that matters for the rest of the year:
- FY27 consolidated comp sales: now 3%–4% (up from prior guide)
- FY27 pretax profit margin: 11.9%–12.0%
- FY27 diluted EPS: $5.08–$5.15
- FY27 share buybacks: $2.75B–$3.0B
- Q2 FY27: comps +2% to +3%, pretax margin 11.4%–11.5%, diluted EPS $1.15–$1.17
One nuance: management did not flow through the entirety of Q1’s above-plan performance. The release notes that the FY27 outlook now assumes “a higher cost of fuel will be in place for the remainder of the year and that it will be unfavorable to pretax profit margin and diluted earnings per share versus its previous outlook.” That conservatism is on-brand for TJX, which has historically guided cautiously and beaten its own plan — today’s print is the latest in that pattern.
Off-Price vs. Mainstream: The Valuation Gap Persists
| Company | Price | Market cap | TTM P/E |
|---|---|---|---|
| TJX Companies (TJX) | $156.05 | $172.6B | 30.3x |
| Ross Stores (ROST) | $230.93 | $74.4B | 32.2x |
| Burlington (BURL) | $319.52 | $20.1B | 33.6x |
| Target (TGT) | $126.04 | $57.4B | 16.7x |
The three publicly traded U.S. off-price specialists — TJX, Ross, and Burlington — all trade above 30x trailing earnings. Target sits at less than half that multiple. The market continues to pay a meaningful premium for the off-price business model, which has structurally lower lease costs per square foot, more flexible buying that can capitalize on whichever brands have inventory issues in a given quarter, and fewer markdown risks than full-price retail.
The Stock Reaction and What’s Next
Shares of TJX traded around $156 on May 22, slightly off ahead of the long Memorial Day weekend after running into the print. The stock sits within a few percent of its 52-week high of $165.82, and the year-to-date setup — comps accelerating, margins expanding, guidance going up, capital return increasing — is exactly the combination that has historically supported a premium multiple.
Three things to watch from here. First, the Q2 print in August: management has guided to comps of +2% to +3%, which is a deceleration from Q1’s +6%; a beat versus that conservative guide is the path to another guidance raise. Second, fuel and freight: the explicit call-out that higher fuel costs will weigh on the back half is a reminder that off-price’s distribution-heavy model is exposed to input-cost cycles. Third, the consumer: every TJX division comped positive and transactions were up across the board, which sits awkwardly alongside cautious commentary from full-price peers about a “stretched” consumer.
For now, off-price retail keeps doing what it has done for the better part of two decades — quietly out-comping its more glamorous neighbors in the mall.
Sources
- TJX Q1 FY27 earnings press release (SEC 8-K Exhibit 99.1, May 20, 2026)
- SEC EDGAR — TJX Companies 8-K filings
- Google Finance — TJX (NYSE: TJX) quote
- Google Finance — Ross Stores (NASDAQ: ROST)
- Google Finance — Burlington Stores (NYSE: BURL)
Disclosure: This article was produced with AI assistance and reviewed before publication. It is for informational purposes only and is not investment advice.