September 24, 2026
Department stores are closing. TJX is signing the leases. That is the trade buried in last quarter’s numbers.
The headline numbers from TJX’s most recent quarter were good. The deeper story is what management announced alongside them.
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When TJX reported Q2 fiscal 2027 results in August, net sales came in at $15.2 billion, up 5% year over year, with comparable sales growing 4%. That met expectations. What did not was the company’s decision to raise its long-term global store target by 500 locations, to 7,500, and to accelerate annual store openings to 4% beginning in fiscal 2028.
At 4% annual growth, that is more than 200 net new stores per year. The 7,500-store target represents approximately 42% potential expansion from the current base of 5,285 stores, using TJX’s existing banners in countries where it already operates.
The location strategy is the part traders should focus on. CFO John Klinger said on the August earnings call: “Again, for Marmaxx, we’re seeing opportunities in rural markets where we see department stores are closing.” That is not incidental. Department store closures have accelerated sharply over the past two years, leaving behind large-format retail vacancies in secondary markets that TJX is structurally positioned to absorb at favorable lease economics.
Where the Growth Is Coming From
The extra 500 stores break down as 300 for TJ Maxx and Marshalls, and 200 for HomeGoods. That split matters because HomeGoods has been the division doing the heavy lifting recently. HomeGoods comparable sales jumped 7% in Q2, TJX International rose 7%, and TJX Canada gained 6%. Marmaxx, which includes TJ Maxx, Marshalls, and Sierra in the U.S., posted more modest comparable-sales growth of just 1%.
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That divergence deserves attention heading into Q3 results. Marmaxx is still the company’s largest division. If foot traffic in the core U.S. apparel banners stays soft while the company accelerates store openings, the square footage growth could get ahead of per-store productivity.
The Tariff Wildcard Turned Tailwind
On tariffs, TJX’s position is structurally different from every full-price retailer. With more than 1,300 buyers sourcing from over 21,000 vendors across 100-plus countries, TJX has become a critical channel for manufacturers looking to move surplus inventory. Tariffs and excess inventory create exactly the buying opportunities TJX needs.
TJX has said it is not assuming tariff-refund benefits in its guidance, and has also suggested that periods of tariff uncertainty can create opportunities for its buyers on merchandise margin. That showed up in the numbers. TJX received $331 million in tariff refunds in the fiscal second quarter alone.
The Valuation Question
Full-year fiscal 2026 results showed EPS of $4.87, revenue of $60.4 billion, and net income of $5.5 billion, up 13% from the prior year. For fiscal 2027, TJX’s Q2 update lifted its full-year outlook for adjusted diluted EPS to $5.15 to $5.20, excluding an expected net benefit of $0.16 from tariff refunds.
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Depending on the data source, the stock’s forward P/E is in the mid-20s to low-30s range, well above typical industry multiples, and the stock is not cheap. The question for investors is whether the current valuation already reflects everything that needs to go right: HomeGoods reaching its store target, an international ramp-up, and continued market share gains.
The case for TJX is not that the stock is undervalued. It is that the business has a repeatable model pulling from a growing pool of distressed retail inventory and rural real estate vacancies. The company generally prices merchandise 20% to 60% below comparable items at full-price retailers, and that gap looks wider, not narrower, as tariff costs ripple through department store pricing.
Levels to Watch
- Q3 FY2027 earnings (November): Marmaxx comparable sales is the key line. A second consecutive quarter below 2% would test the bull case for the core U.S. business.
- Store productivity: Watch net sales per square foot as the opening pace accelerates to 4% in fiscal 2028. Expansion into rural markets lowers average productivity if traffic assumptions miss.
- Tariff refunds: The $331 million Q2 refund boosted results, and TJX said it is excluding an expected $0.16 net benefit from tariff refunds from its full-year adjusted EPS guidance. If refunds stop, the adjusted EPS comparison gets harder.
TJX is the rare retailer building into economic uncertainty rather than retracting. The bear case is not that the model breaks. It is that at today’s multiple, you are paying for several years of good execution upfront.
