TJX Companies Inc

“Further, we are pleased to share that we are planning to accelerate our store openings to 4% starting next year and now believe we can grow our overall global store base to a total of 7,500 stores in our existing retail banners in our current countries over the long term. We remain very confident in the long runway for growth ahead for TJX and we are excited about the opportunities we see to bring great values to even more consumers around the world.

A raised long-term store target on the fiscal Q2 call tells you TJX sees runway while U.S. retail sales slip, and the faster build pace next year lands squarely on Ross and Burlington's turf. Off-price share is being taken store by store.

“I am very pleased with our above-plan consolidated results in the second quarter. Overall comparable sales increased 4%, above our plan, and both profitability and earnings per share well exceeded our expectations. While sales at Marmaxx were below our expectations, HomeGoods, TJX Canada, and TJX International all delivered terrific comp sales increases of 6% to 7%, which underscores the strength of our global diversified business.

Marmaxx, the biggest piece of the business, came in soft, and the quarter still beat plan because HomeGoods, Canada and International picked up the slack. That is the diversification case investors have been paying a premium for, and profitability and EPS both landed ahead of management's own expectations.

“With our strong second quarter profit results, we are raising our pretax profit margin and earnings per share outlook for the full year. Looking ahead, the third quarter is off to a strong start, and we are seeing improvement at our Marmaxx division to start the quarter. Availability of branded, quality merchandise continues to be outstanding, and we have many initiatives in place to drive sales and traffic in the upcoming fall and holiday shopping seasons.

Herrman raised guidance on both margin and EPS, betting the off-price merchandise pipeline holds through holiday, with the flagship Marmaxx division already improving in the current quarter. Watch whether that early Q3 momentum shows up in holiday comps.