TJX Cuts Guidance After Q4 Beat
TJX cuts guidance after a Q4 beat, setting FY27 EPS below Street and forcing traders to weigh slower growth against buybacks and dividend lift.
KEY TAKEAWAYS
- Beat Q4 estimates with $17.7B sales and $1.43 adjusted EPS.
- Set FY27 diluted EPS at $4.93-$5.02, midpoint roughly 3.6% below consensus.
- Authorized $2.5-$2.75B buyback and announced a 13% dividend increase.
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TJX Companies said on Feb. 25, 2026, that it beat fourth-quarter estimates but cut guidance for fiscal 2027 after management warned that budget-conscious consumers were trimming discretionary spending, signaling slower growth next year.
Q4 and FY26 Results
For the quarter ended Jan. 31, 2026, TJX reported net sales of $17.7 billion, up 9% year-over-year, and adjusted diluted earnings per share (EPS) of $1.43, a 16% increase excluding a litigation settlement benefit. Consolidated comparable sales rose 5% in both the fourth quarter and the full fiscal year, exceeding the company’s plan. TJX described the quarter as a strong finish to a fiscal year marked by broad-based comparable sales gains across its divisions.
Inventories at fiscal year-end increased to $7.3 billion from $6.4 billion a year earlier. The company recorded a litigation settlement that produced a net pretax benefit of $221 million but reduced reported pretax margins by 130 basis points in the quarter and 40 basis points for the full year. CEO Ernie Herrman said, "I am extremely pleased with our excellent performance in 2025!"
FY27 Guidance and Capital Returns
TJX set fiscal 2027 diluted EPS guidance at $4.93 to $5.02, with a midpoint roughly 3.6% below pre-announcement consensus. The company authorized a $2.5 billion to $2.75 billion share-repurchase program and announced a 13% dividend increase. Management attributed the cautious outlook to budget-conscious consumers reducing discretionary spending amid macroeconomic uncertainty.
The contrast between the above-plan fourth quarter and the below-consensus guidance highlights the gap between recent momentum and management’s expectations for the year ahead. Investors will weigh the strong comparable sales and one-time settlement benefit against the inventory build and the company’s warning about consumer selectivity. The board’s approval of significant capital returns despite trimmed growth expectations adds complexity to the outlook.
This combination of solid near-term sales and earnings with a tempered FY27 EPS outlook frames the immediate investor debate: whether TJX’s off-price positioning will sustain demand or if cautious consumer behavior will slow sales and margins in the coming year.
