Consolidated comparable store sales increased 3% for the first quarter of fiscal 2026, mirroring the 3% growth seen in the prior year's first quarter. This growth was driven by an increase in customer transactions.

As of May 3, 2025, both the number of stores in operation and the selling square footage increased 3% compared to the end of the first quarter last year, indicating ongoing physical expansion as a key growth lever.

During fiscal 2025, TJX completed investments in a 49% stake in Multibrand Outlet Stores S.A.P.I. de C.V. (Mexico) for $193 million and a 35% stake in Brands for Less (UAE/Saudi Arabia) for $358 million, signaling international expansion via strategic partnerships.

While HomeGoods' segment profit margin increased to 10.2% (from 9.5%) due to lower supply chain costs, Marmaxx and TJX Canada saw declines in their margins (Marmaxx to 13.7% from 14.2%, TJX Canada to 10.7% from 12.3%), impacted by expense deleverage and foreign exchange.

The cost of sales ratio increased by 0.5 percentage points to 70.5%, primarily due to unfavorable mark-to-market adjustments on inventory hedges. SG&A expenses also rose by 0.2 percentage points to 19.4%, partly due to incremental store wage and payroll costs.

Management returned $1 billion to shareholders in Q1 fiscal 2026 through share repurchases ($613 million) and dividends ($424 million), demonstrating a commitment to shareholder value despite a slight dip in net income.

The company continues to monitor changes in international trade relations and tariffs, particularly from China, acknowledging their potential impact on sourcing, operations, and pricing. The extent and duration of these impacts remain uncertain.

The net fair value of derivative financial instruments shifted to a negative $65.2 million as of May 3, 2025, from a positive $35.0 million on February 1, 2025. This resulted in a $97 million loss recognized in income from derivatives in Q1 fiscal 2026, compared to a $7 million gain in the prior year.

The SEC adopted new rules requiring climate-related information disclosures, effective January 1, 2025, but subsequently stayed them due to legal challenges. TJX is continuing to monitor the status, indicating potential future compliance burdens.

The company's off-price model, offering merchandise 20% to 60% below full-price retailers, continues to drive customer transactions, which was the primary driver for the 3% consolidated comparable store sales increase in Q1 fiscal 2026.

TJX increased its total store count and selling square footage by 3% year-over-year, indicating continued physical market penetration and a commitment to its brick-and-mortar presence as a competitive advantage in the retail landscape.

Operating across four segments (Marmaxx, HomeGoods, TJX Canada, TJX International) with multiple banners (TJ Maxx, Marshalls, HomeGoods, Winners, TK Maxx, etc.) and e-commerce sites, TJX maintains a broad market reach and diversified competitive exposure.

The cost of sales, including buying and occupancy costs, as a percentage of net sales, increased to 70.5% in Q1 fiscal 2026 from 70.0% in Q1 fiscal 2025. This rise was primarily attributed to unfavorable mark-to-market adjustments on inventory hedges.

Selling, general and administrative expenses as a percentage of net sales increased to 19.4% in Q1 fiscal 2026 from 19.2% in Q1 fiscal 2025. This was driven by incremental store wage and payroll costs, partially offset by a prior year employee retention credit reserve release benefit.

Consolidated average per store inventories, excluding e-commerce sites, were up 7% at the end of Q1 fiscal 2026 compared to the prior year. This increase contributed to the $343 million decrease in operating cash flows.

Capital expenditures for Q1 fiscal 2026 totaled $497 million, an increase from $419 million in the prior year, with a portion allocated to investments in information technology. This indicates ongoing efforts to enhance technological capabilities.

E-commerce sales represented approximately 2% of total sales for both Q1 fiscal 2026 and Q1 fiscal 2025. While not a primary growth driver, the consistent contribution suggests stable digital presence supporting the overall business model.

In April 2025, TJX implemented a new human resources system to simplify and standardize global HR processes and enhance the control environment. This digital transformation effort aims to improve operational efficiency and governance.

TJX repurchased 5.1 million shares for $613 million in Q1 fiscal 2026, an increase from $509 million in the prior year. The Board authorized an additional $2.5 billion repurchase program in February 2025, bringing the total available to $3 billion, signaling strong confidence in valuation.

Capital expenditures increased to $497 million in Q1 fiscal 2026 from $419 million in Q1 fiscal 2025. The company anticipates full fiscal year 2026 capital spending to be approximately $2.1 billion to $2.2 billion, focusing on store improvements, new stores, distribution centers, and IT.

The company declared quarterly dividends of $0.425 per share for Q1 fiscal 2026, an increase from $0.375 per share in Q1 fiscal 2025. Cash payments for dividends totaled $424 million, up from $380 million, indicating a growing return to shareholders.

The implementation of a new global HR system in April 2025 aims to simplify and standardize processes while enhancing the control environment surrounding HR-related activities. This contributes to improved governance practices.

TJX acknowledges the SEC's new rules on climate-related information, which were adopted but subsequently stayed. The company is monitoring the status, indicating awareness and potential future engagement with environmental reporting standards.

The filing states no material changes to critical accounting estimates or primary risk exposures, including those related to evolving corporate governance and public disclosure regulations concerning environmental, social, and governance matters, from the prior 10-K.

The company continues to face uncertainty from changes in international trade relations, economic and monetary policies, and tariffs, particularly on imports from China. Management is implementing measures to mitigate these impacts, but the overall effect remains uncertain.

Operating results are affected by foreign currency exchange rates, impacting net sales, net income, and earnings per share, as well as merchandise margins. Unfavorable transactional foreign exchange notably impacted TJX Canada's segment profit margin.

Despite external macroeconomic factors, TJX's core off-price model continues to resonate, evidenced by a 3% increase in consolidated comparable store sales driven by customer transactions. This suggests resilience in consumer demand for value-oriented retail.