TJX talks about home, tariffs after Q1 sales beat expectations

Higher transactions propelled sales and comp growth for every nameplate in TJX Cos.’ retail portfolio during the first quarter.

TJX talks about home, tariffs after Q1 sales beat expectations

FRAMINGHAM, Mass. – Higher transactions propelled sales and comp growth for every nameplate in TJX Cos.‘ retail portfolio during the first quarter.

Company comps were up in both apparel and home, with home turning in the stronger performance.

“Bucking a trend in the home industry now is our home business, especially HomeGoods. We’re quite proud the way they’re beginning Q2 as well,” TJX president and CEO Ernie Herrman told investors during this morning’s Q1 call.

Although the company is working hard to mitigate tariffs over the coming months, it does expect to take a hit during the second quarter on goods it committed to before additional tariffs were announced in March and April.

The impact for Q2: consolidated comp sales up just 2% to 3%, with pre-tax profit down 0.4 to 0.5 percentage points against the prior year’s 10.9%.

Fluid Merchandising, Price Adjustments on the Horizon

TJX sees “plentiful” buying opportunities in the marketplace, Herrman said. At the same time, he acknowledged that the vendor shipment delays which followed President Trump’s announcement of steep tariff hikes on April 2 might require a few work-arounds.

“In the vendor community you definitely have an uneasiness in what’s happening now and going forward because the situation is not crystal clear,” he said.

The company will flex its assortments where necessary by expanding some product categories to fill the space. On product pricing, TJX will ensure that it maintains a gap between its own retails and those offered by traditional retailers, “which means they could go up on some items,” Herrman said.

For the time being, the company’s business assumptions for the remainder of the year are that tariffs will continue at the current rate under Trump’s 90-day pause, which for most countries raises tariffs 10%.

Q1 Results Best Company Expectations

Total net sales for the first quarter, ended May 3, rose 5% to $13.1 billion. Consolidated comparable sales were up 3%, hitting the high end of the company’s guidance.

Results by nameplate included:

Marmaxx U.S.: Sales were up 4% to $8.052 billion. Comp rose 2% on top of a 2% gain in the prior-year quarter. NOTE: The original version of this story incorrectly reported the sales figure.

HomeGoods U.S.: Sales climbed 8% to $2.25 billion. Comp rose 4% on top of a 4% gain in the year-ago quarter.

TJX Canada: Sales rose 3% (or 7% on a constant currency basis) to $1.1 billion. Comp was up 5% on top of a 4% gain in last year’s Q1.

TJX International (Europe and Australia): Sales were up 8% (or 7% on a constant currency basis) to $1.66 billion. Comp climbed 5% compared to a 2% gain in the year-ago period.

Net income slipped 3% to $1.0 billion and diluted earnings per share were $0.92 versus $0.93 in last year’s first quarter. Those results beat the company’s Q1 expectations.

TJX is standing pat on the full-year guidance it issued earlier this year: comp sales up 2% to 3%; pre-tax profit margins down 0.1 to 0.2 percentage points; and earnings per share up 2% to 4%.