TJX vs Ross Stores: Q2 2026 Earnings Compared

Ross outgrew TJX on sales, shoppers and underlying earnings

TJX (TJ Maxx, Marshalls, HomeGoods) and Ross Stores are both U.S. off-price retailers. Off-price means they buy brand-name goods cheaply and sell them below department-store prices. Both reported the same 13-week quarter, May 3 to August 1, 2026. TJX calls it the second quarter of fiscal 2027, and Ross calls it the second quarter of fiscal 2026. Both had a one-time refund of tariffs the Supreme Court had ruled invalid, which lifted headline earnings. Once the refunds are removed, the gap between the two is clear. Ross grew comparable sales 10% with more shoppers coming in. TJX grew them 4%, and its biggest division lost shoppers.

Full analyses: TJX Q2 (quarter ended Aug 1, 2026) and Ross Stores Q2 (quarter ended Aug 1, 2026).

Side by side

Comparable sales measure growth at stores (and, for TJX, websites) open long enough to compare with last year, so they leave out the effect of new stores. TJX does not report an operating income line, so our TJX report calculated its operating margin. TJX's own ex-refund margin figure is pre-tax (after $31 million of net interest income), while Ross's is an operating margin. The two "excluding refund" margin rows are therefore not measured exactly the same way. The change in each is the fairer comparison.

The refunds were not the same size

TJX received $331 million in tariff refunds. It then set aside $112 million in extra employee bonuses because of the windfall, leaving a net pre-tax benefit of $219 million, or $0.14 per share. Ross booked about $253 million as a reduction in cost of goods sold. That accounted for 405 basis points (4.05 percentage points) of its margin increase and about $0.60 per share. As a share of EPS, the refund was about a tenth of TJX's $1.36 and more than a fifth of Ross's $2.66. The Ross comparison is also flattered from the other side: last year's quarter carried about $0.11 per share of tariff-related costs.

So Ross's 71% EPS jump overstates its lead. Even with the refunds removed, though, Ross's EPS rose about 32% ($2.06 against $1.56, our arithmetic from its report's figures), while TJX's rose 10.9%.

What drove TJX

The TJX result is really two stories. HomeGoods grew comparable sales 7%. Even without the refund, its segment margin rose from 10.0% to 12.4%, which the filing credits to better markon (buying goods more cheaply relative to selling price), "lower freight costs" and "lower supply chain and store costs." TJX Canada and TJX International grew comparable sales 6% and 7%, with more transactions and bigger baskets. Part of International's margin gain came from favorable currency moves on imported goods.

Marmaxx (TJ Maxx and Marshalls) is 60% of sales, and it grew comparable sales only 1%. The filing says that came from "a higher average basket, partially offset by a decrease in customer transactions." Fewer shoppers came in, each spending more. The CEO said Marmaxx sales "were below our expectations." Excluding the refund, Marmaxx's margin was flat at 14.2%. That is why TJX's overall ex-refund margin gain was a modest 0.5 points.

What drove Ross

Ross's 10% comparable-sales gain came from about 7% more transactions and about 3% bigger baskets. Management said the growth came from both new and existing customers and credited merchandise, marketing and in-store improvements. Of the $736 million sales increase, $534 million came from existing stores and $202 million from newer ones. The ex-refund margin gain of about 205 basis points had specific sources. Merchandise margin rose 110 basis points. Distribution costs fell 100 basis points, helped by the timing of packaway costs (packaway is merchandise bought opportunistically and stored to sell later). Occupancy costs fell 25 basis points as a share of sales. Higher fuel-driven freight and incentive pay offset part of the gain. Before counting the refund, EPS of about $2.06 beat the company's own guidance of $1.85–$1.93.

Where they diverge, and why

Traffic. This is the clearest difference. Ross's growth came mainly from more shoppers, while TJX's largest division lost shoppers and grew only because each one spent more. The TJX divisions the filing says added shoppers were Canada and International, not its core U.S. apparel stores.

Margins. Ross's ex-refund margin gain (about 2.05 points) was roughly four times TJX's (0.5 points). At Ross, costs grew more slowly than a 13% sales increase, so margins widened. At TJX, higher store wages and weak sales at Marmaxx ate up the gains from better buying.

Inventory. The two companies are managing stock differently. TJX's inventory was only 2% higher per store. Ross's inventory rose 18.4%, faster than its 13% sales growth, although a smaller share of it is packaway (36% against 38%). Ross's report flags this as the main risk: it is fine if fall sales land near guidance, but it could force markdowns (price cuts) if they don't.

Takeaway: Both refunds make headline EPS look better than the underlying business, but they don't explain the gap between the two. Excluding the refunds, Ross grew EPS about three times as fast as TJX. It did so on a comparable-sales gain driven by more shoppers, while TJX's biggest division, Marmaxx, lost shoppers. TJX's strength this quarter was HomeGoods and its overseas divisions, not its core U.S. apparel stores.

What to watch next quarter

• TJX guides third-quarter comparable sales of +2% to +3% and EPS of $1.30–$1.32 excluding an expected further $0.06 refund benefit. Full-year comparable sales stay at +3% to +4%, while EPS guidance was raised to $5.15–$5.20 excluding refunds. The CEO said the third quarter was "off to a strong start" with "improvement at our Marmaxx division." Whether Marmaxx's traffic actually recovers is the claim to test.
• Ross guides third-quarter comparable sales of +6% to +7% with EPS of $1.75–$1.83, and fourth-quarter comparable sales of +4% to +5%. Full-year EPS is $8.61–$8.77, including the ~$0.60 refund. Management attributes the slowdown from 10% to tougher comparisons with last year rather than weaker demand. The things to watch are whether traffic keeps growing and whether the 18% inventory build sells through without heavy markdowns.
• For both companies, next year's EPS comparisons will look weaker because the refunds won't repeat: about $0.16 of full-year EPS at TJX, by its own estimate, and about $0.60 at Ross.