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Key Takeaways HomeGoods delivered 9% comparable sales growth in fiscal Q1, outpacing TJX's larger banners.Net sales in the HomeGoods U.S. division rose 11% to $2.51B as demand broadened across regions.Segment margin expanded 270 basis points to 12.9%, signaling rising efficiency and scale. The TJX Companies, Inc.’s (TJX - Free Report) HomeGoods banner is increasingly looking like more than just a complementary business within the retailer's portfolio. The chain is emerging as a meaningful earnings contributor as its scale, sales momentum and profitability continue to improve.

The latest quarter highlighted that shift. HomeGoods posted a 9% comparable sales increase in the first quarter of fiscal 2027, outpacing the company's larger banners and demonstrating broad-based demand across regions and customer income groups. Net sales in the HomeGoods (United States) division rose 11% year over year to $2,506 million. More importantly, profitability improved at an even faster pace, with segment margin expanding 270 basis points to 12.9%.

The performance also reinforces the strength of HomeGoods' merchandising proposition. The banner continues to attract shoppers with an eclectic assortment of home fashions and furnishings sourced from around the world and offered at compelling values through its off-price model. The broad-based growth across regions and income demographics suggests that its appeal extends well beyond a specific customer segment.

Just as importantly, strong sales momentum is translating into higher profitability. The expansion in segment margin indicates that HomeGoods is not only growing faster but also becoming a more efficient business as it gains scale. The latest results suggest the banner is strengthening the contribution to TJX's earnings mix and establishing itself as an increasingly important profit engine within the portfolio.

TJX and Peers See Similar DynamicsRoss Stores (ROST - Free Report) achieved strong growth through disciplined execution of its off-price model. Driven by robust customer traffic, Ross Stores delivered a stellar 17% comparable store sales increase in the first quarter of fiscal 2026. The broad-based gains across income levels, age groups and ethnicities underscore the banner's wide consumer appeal. Importantly, Ross Stores translated this sales momentum into stronger profitability, with operating margin expanding 120 basis points to 13.4%.

Burlington Stores, Inc. (BURL - Free Report) has been benefiting from the disciplined execution of its off-price model. In the first quarter of fiscal 2026, Burlington Stores reported 6% comparable store sales growth and a 14% increase in total sales. Disciplined inventory management, faster inventory turns and an ability to chase trends enabled Burlington Stores to convert sales growth into margin expansion and consistent earnings growth.

TJX’s Price Performance, Valuation and EstimatesShares of The TJX Companies have gained 1.8% in the past month compared with the industry’s growth of 2%.

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From a valuation standpoint, TJX trades at a forward price-to-earnings ratio of 28.93X, down from the industry’s average of 30.91X.

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The Zacks Consensus Estimate for The TJX Companies’ fiscal 2027 and 2028 earnings per share has inched up 2 cents and 1 cent to $5.17 and $5.67, respectively, in the past 30 days.

Image Source: Zacks Investment Research

TJX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It has been about a month since the last earnings report for TJX (TJX - Free Report) . Shares have added about 4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is TJX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

TJX Q1 Earnings and Sales Beat Estimates, Fiscal 2027 Guidance RaisedThe TJX Companies posted first-quarter fiscal 2027 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Both metrics also increased from the year-ago quarter. The company raised its fiscal 2027 guidance.

The TJX Companies’ fiscal first-quarter earnings per share (EPS) were $1.19, up 29% from the year-ago quarter. The metric also beat the Zacks Consensus Estimate of $1.01 per share.

Net sales came in at $14,323 million, registering an increase of 9% year over year and surpassing the Zacks Consensus Estimate of $13,998 million.

In the Marmaxx (the United States) division, the company’s net sales were $8,650 million, up 7% year over year. Net sales amounted to $2,506 million, up 11% year over year, in the HomeGoods (the United States) division. TJX Canada’s net sales were $1,285 million, up 12% from the figure reported in the year-ago period. TJX International’s (Europe & Australia) net sales were $1,882 million, up 13% year over year.

The company witnessed a 6% jump in consolidated comparable store sales, supported by strong performance in every division. Comparable store sales rose 6% at Marmaxx (the United States), 9% at HomeGoods (the United States), 7% at TJX Canada and 4% at TJX International (Europe & Australia).

The TJX Companies’ pretax profit margin was 12%, up 1.7 percentage points from the year-ago quarter’s level. The increase is driven by expense leverage from stronger-than-planned sales, favorable fuel hedges and better-than-anticipated merchandise margins.

The gross profit margin was 31.3%, up 1.8 percentage points year over year, mainly driven by higher merchandise margins, favorable inventory and fuel hedge impacts, and expense leverage from stronger sales performance.

The company’s selling, general and administrative costs, as a percent of sales, were 19.5%, a 0.1 percentage point increase.

TJX’s Financial Health SnapshotDuring the first-quarter fiscal 2027, the company increased its total store count by 48, reaching 5,262.

The TJX Companies ended the quarter with cash and cash equivalents of $5,580 million, long-term debt of $1,871 million and shareholders’ equity of $10,403 million. It generated an operating cash flow of $1,119 million in the first quarter of fiscal 2027.

In the fiscal first quarter, the company returned $1.1 billion to shareholders, including $604 million used to repurchase 3.8 million shares and $471 million paid in shareholder dividends. The company also increased its fiscal 2027 share repurchase plan to be between $2.75 billion and $3 billion.

What to Expect From TJX Moving Forward?For fiscal 2027, The TJX Companies now expects consolidated comparable store sales growth of 3% to 4%, up from the previously estimated 2% to 3% rise. The company also raised its pretax profit margin outlook to 11.9% to 12% compared with the prior range of 11.7% to 11.8%, and now anticipates earnings per share of $5.08 to $5.15, above the earlier forecast of $4.93 to $5.02.

For the second quarter of fiscal 2027, management expects consolidated comparable store sales to grow 2% to 3%. The company projects a pretax profit margin between 11.4% and 11.5%. The quarterly EPS is expected in the range of $1.15 to $1.17.

How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.

VGM ScoresAt this time, TJX has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, TJX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Key Takeaways TJX International posted a 4% comp sales gain, led by strong trends in Europe and Australia.TJX opened its first store in Spain and plans more locations after encouraging initial customer response.TJX sees room for 1,700 more stores and is exploring joint ventures and strategic investments. The TJX Companies, Inc. (TJX - Free Report) appears to be strengthening its position to capture additional share in overseas markets, aided by steady momentum across Europe and Australia. In the first quarter of fiscal 2027, TJX International posted a 4% comparable sales increase, while management highlighted strong trends in Europe and particularly robust demand in Australia.

A notable development was the opening of the company’s first store in Spain. Management described the initial customer response as highly encouraging and indicated plans to add more locations in the country this year. The expansion suggests confidence that the off-price retail model can resonate with consumers beyond TJX’s existing markets.

The company also sees opportunities through partnerships. Its joint venture with Grupo Axo in Mexico is progressing well, combining TJX’s merchandising expertise with local operating capabilities. Though still in the early stages, management expressed optimism about the long-term potential of the Mexican market. Similarly, TJX remains constructive on its investment in Brands For Less in the Middle East despite geopolitical challenges.

Importantly, management emphasized that the company now operates in 10 countries and believes there is room for more than 1,700 additional stores within its existing markets. TJX is exploring adjacent countries and multiple expansion avenues, including joint ventures and strategic investments.

These initiatives suggest TJX is leveraging both organic expansion and partnerships to deepen its international footprint and pursue greater market share overseas.

TJX and Its Peers Seek Growth Through Store ExpansionRoss Stores (ROST - Free Report) remains focused on domestic expansion. With the Northeast emerging as a key growth area, Ross Stores continues to broaden its footprint across new and existing U.S. regions. Ross Stores plans to open about 110 new stores this year and sees opportunities to further penetrate underpenetrated markets, underscoring its emphasis on capturing additional market share within the United States.

Burlington Stores, Inc. (BURL - Free Report) remains focused on strengthening its domestic footprint. Supported by strong productivity initiatives, Burlington Stores continues to add new locations and expects 115 net new stores in 2026. Burlington Stores also sees a robust pipeline for 2027 and 2028, underscoring its emphasis on capturing additional market share across the United States.

TJX’s Price Performance, Valuation and EstimatesShares of The TJX Companies have gained 3.5% in the past month against the industry’s decline of 2.4%.

Image Source: Zacks Investment Research

From a valuation standpoint, TJX trades at a forward price-to-earnings ratio of 30.54X, down from the industry’s average of 31.26X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for TJX’s current and next fiscal-year earnings per share implies a year-over-year rise of 9.3% and 9.7%, respectively.

Image Source: Zacks Investment Research

TJX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.