TJX (NYSE:TJX) Surprises With Q3 CY2025 Sales

Off-price retail company TJX (NYSE:TJX) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 7.5% year on year to $15.12 billion. On the other hand, next quarter’s revenue guidance of $16.76 billion was less impressive, coming in 3.2% below analysts’ estimates. Its GAAP profit of $1.28 per share was 5% above analysts’ consensus estimates.

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Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., stated, “I am extremely pleased with our third quarter performance and the excellent execution of our off-price business model by our teams across the Company. Sales, pretax profit margin, and earnings per share all exceeded our expectations. Overall comp sales grew 5%, with strength at every division. We believe this is a testament to our value proposition and treasure-hunt shopping experience, which continue to draw consumers to our retail banners worldwide. With our outperformance in the third quarter, we are raising our sales, pretax profit margin, and earnings per share guidance for the full year. The fourth quarter is off to a strong start, the availability of merchandise continues to be outstanding, and we are excited about the deals we are seeing in the marketplace. With our compelling values and ever-changing, fresh assortments of good, better, and best brands, we are convinced that our stores and e-commerce sites are strongly positioned as gifting destinations for value-conscious shoppers this holiday season. Going forward, we see great potential to continue capturing market share and successfully growing TJX around the globe.”

Company Overview

Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE:TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $58.98 billion in revenue over the past 12 months, TJX is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. For TJX to boost its sales, it likely needs to adjust its prices or lean into foreign markets.

As you can see below, TJX’s 6.4% annualized revenue growth over the last six years (we compare to 2019 to normalize for COVID-19 impacts) was tepid, but to its credit, it opened new stores and increased sales at existing, established locations.

This quarter, TJX reported year-on-year revenue growth of 7.5%, and its $15.12 billion of revenue exceeded Wall Street’s estimates by 1.5%. Company management is currently guiding for a 2.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 5.2% over the next 12 months, similar to its six-year rate. We still think its growth trajectory is attractive given its scale and indicates the market sees success for its products.

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Store Performance

Number of Stores

A retailer’s store count often determines how much revenue it can generate.

TJX operated 5,191 locations in the latest quarter. It has opened new stores quickly over the last two years, averaging 2.6% annual growth, faster than the broader consumer retail sector.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Same-Store Sales

A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.

TJX’s demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 4% per year. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives TJX multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.

In the latest quarter, TJX’s same-store sales rose 5% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.

Key Takeaways from TJX’s Q3 Results

We liked that TJX's revenue, gross margin, and EPS all outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 2.7% to $149.46 immediately after reporting.

So do we think TJX is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.