The two largest off-price retailers reported financial results for the same 13-week period, yet market reactions diverged sharply despite both companies exceeding their own guidance.
TJX Companies (NYSE:TJX), operator of TJ Maxx, Marshalls, and HomeGoods, posted a 4% increase in same-store sales for its fiscal second quarter of 2027 (ended August 1, 2026), surpassing its forecast. The stock declined 4% on the reporting day and continued falling, trading near its 52-week low.
Ross Stores (NASDAQ:ROST) reported a 10% rise in same-store sales for the identical period, triggering a 4.1% stock surge on Friday.
Market divergence stems from second-half growth projections. Ross anticipates 6%–7% same-store sales growth in Q3 and 4%–5% in Q4, reflecting strong operational momentum. TJX forecasts 2%–3% growth in Q3 and 3%–4% for the full year, signaling deceleration in its core U.S. division.
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Image source: The Motley Fool.
Ross: Sustained Traffic-Driven Growth
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Ross delivered robust performance with total sales rising 13% year-over-year to $6.3 billion. The 10% same-store sales increase was fueled primarily by higher customer traffic, with growth driven by both new patrons and increased spending among existing shoppers. This builds on a modest 2% gain in the prior year’s quarter.
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Net income surged to $851 million from $508 million year-over-year, with earnings per share (EPS) of $2.66 exceeding the company’s $1.85–$1.93 guidance. While $0.60 of the beat stemmed from tariff refunds under the International Emergency Economic Powers Act, the adjusted EPS still rose significantly. Ross also raised its full-year guidance, projecting 6%–7% same-store sales growth in Q3 and 4%–5% in Q4.
TJX: Quality Metrics Improve Amid Structural Slowdown
TJX reported 5% revenue growth to $15.2 billion, with EPS of $1.36 (up 24%) surpassing forecasts. Excluding a $0.14 tariff-related benefit, adjusted EPS still rose 11%. Management raised full-year margin and earnings targets and increased its long-term store count goal to 7,500 locations.
Despite these gains, the stock fell, as growth momentum in its flagship Marmaxx division—which includes TJ Maxx and Marshalls—slowed to 1% comparable sales growth, down from 3% in the prior year. International markets, including HomeGoods, TJX Canada, and TJX International, posted 6%–7% comparable sales increases, highlighting global diversification.
For Q3, TJX projects 2%–3% comparable sales growth, with full-year guidance unchanged at 3%–4%. The earnings raise primarily reflected margin improvements and tariff refunds. CEO Ernie Herrman noted early Q3 strength at Marmaxx but acknowledged the division’s deceleration.
Market Valuation Disparity
Both companies trade at similar P/E ratios—TJX at ~26x and Ross at ~29x earnings—despite Ross growing same-store sales at more than double TJX’s rate. With TJX valued at $155 billion vs. Ross’s $78 billion, investors are effectively paying comparable prices for profit but reacting differently to second-half outlooks.
Analysts conclude the market’s contrasting responses align with forward-looking trajectories. Ross’s traffic-driven growth and conservative yet optimistic guidance contrast with TJX’s maturing U.S. dominance and stabilizing international strength, positioning Ross as the favored second-half performer based on its own projections.
