The TJX Companies story

What drives the business

• TJX's discount retail model pairs rapidly changing branded merchandise with prices generally 20% to 60% below comparable merchandise at full-price retailers, encouraging frequent visits rather than relying on promotional pricing.
• Approximately 21,000 vendors worldwide support flexible purchasing close to the selling season, while adaptable store layouts and rapid inventory turnover help TJX respond to changing customer preferences.
• Marmaxx, which includes TJ Maxx, Marshalls and Sierra, is the largest segment, generating $9.1 billion, or 60% of revenue, in the quarter to August 2026.
• HomeGoods and Homesense in the United States, Winners, HomeSense and Marshalls in Canada, and TK Maxx and Homesense internationally diversify the business, with comparable sales growth of 6% to 7% across those segments in the quarter to August 2026.
• TJX ended the quarter to August 2026 with 5,285 stores and plans annual store opening growth of 4% beginning in fiscal 2028, with long-term potential for 7,500 stores across existing banners and countries.

What the price assumes

At $130.25, the reverse DCF implies free cash flow after stock-based pay grows 10.7% a year for ten years, using a 10.2% discount rate.

That compares with delivered growth of 8.8% a year over the last 10 years and the TenQ check's 6.4% bar, which assumes the historical pace slows halfway to 4%.

The price therefore assumes faster cash growth than TJX's record, while its 4.1% free cash flow yield is below its historical 4.6%, contributing to only 1 of 6 Value checks passing.

Value TJX on your own assumptions

What could change the story

• Marmaxx's 1% comparable sales growth in the quarter to August 2026 fell below management's expectations, making continued strength in the other segments important to consolidated growth.
• Tariff refunds added $219 million to pretax profit after related compensation accruals in the quarter to August 2026, and the amount, timing and likelihood of further recoveries remain uncertain.
• Incremental store wages and payroll costs pushed adjusted selling, general and administrative expenses to 19.7% of sales in the quarter to August 2026, up 0.2 percentage points, creating a cost hurdle as expansion accelerates.
• The near-term liquidity check fails at 1.15 against a 1.50 bar, although $6.0 billion in cash and short-term investments exceeds $2.9 billion in total debt.

What to watch next

• The next release will test management's reported early improvement at Marmaxx against its 1% comparable sales growth in the quarter to August 2026 and consolidated comparable sales guidance of 2% to 3% for the third quarter of fiscal 2027.
• For the third quarter of fiscal 2027, TJX expects adjusted pretax profit margin of 12.3% to 12.4% and adjusted diluted earnings per share of $1.30 to $1.32, excluding the expected net tariff refund benefit.
• For fiscal 2027, management expects comparable sales growth of 3% to 4%, adjusted pretax profit margin of 12.0% to 12.1% and adjusted diluted earnings per share of $5.15 to $5.20.
• Store additions and inventory per store will show how expansion is progressing, following reported per-store inventory growth of 2% in the quarter to August 2026 and ahead of planned store opening growth of 4% beginning in fiscal 2028.

Sources

• TJX Companies's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The TJX stock report, for every figure and check