Discount retailer TJX (TJX.US) reported Q2 sales and profits that exceeded expectations, but concerns have been raised over its accelerated expansion plans.

U.S. discount clothing and home goods retailer TJX Companies (TJX.US) released its second-quarter financial report for fiscal 2027 on Wednesday, revealing that several key metrics exceeded market expectations, although its plans to accelerate new store openings have left investors unsettled. According to the data, TJX's net sales for the second fiscal quarter ending August 1 reached $15.2 billion, up 5% year-over-year; same-store sales grew by 4%, and adjusted earnings per share increased by 11% year-over-year to $1.22, all of which performed better than market expectations. In the first half of fiscal 2027, the company reported net sales of $29.5 billion, a 7% increase year-over-year, with same-store sales rising by 5%. The net profit for the first half was $2.9 billion, and after excluding a net gain of $0.14 from duty refunds, the adjusted earnings per share was $2.41, representing a 19% increase from the same period last year. As of August 1, the company increased its total number of stores by 23 locations to 5,285, with total square footage growing by 0.4% compared to the previous quarter. TJX's CEO Ernie Herrman stated in the financial report, I am very pleased with our overall results for the second quarter, which surpassed expectations. Same-store sales grew by 4%, and both profit margins and earnings per share exceeded our forecasts. While Marmaxx's sales fell short of expectations, HomeGoods, TJX Canada, and TJX International all achieved significant same-store sales growth of 6% to 7%, highlighting the strength of our diverse global business. In the second quarter, the company returned $1.3 billion to shareholders through stock buybacks and dividends. The company also received $331 million in IEEPA duty refunds during the quarter. Previously, the U.S. Supreme Court ruled that the Trump administration's tariffs under the International Emergency Economic Powers Act (IEEPA) were illegal, initiating a large-scale refund process. TJX also announced plans to increase its store growth rate to 4% starting in fiscal 2028 and raised its long-term global store goal to 7,500 locations. However, amidst inflation eroding consumer purchasing power, TJX's expansion plans have raised concerns in the market. As for performance guidance, TJX expects same-store sales in the third quarter of fiscal 2027 to grow by 2% to 3%, with adjusted earnings per share projected to be between $1.30 and $1.32. The company anticipates receiving additional IEEPA duty refunds in the third quarter, which will help lower sales costs. For the full year, the company maintained its guidance for same-store sales growth of 3% to 4% for fiscal 2027. Excluding the estimated net gain of about $0.16 from duty refunds, the company raised its adjusted earnings per share guidance for the year to between $5.15 and $5.20. As of the time of publication, TJX's stock was down 3.97% in pre-market trading, having dipped as much as 5% earlier.