TJX 2027 회계연도 2분기 실적 발표 콘퍼런스 콜: EPS 전망치 상향, 매장 목표치 상향

TJX 컴퍼니스(NYSE: TJX)는 평균 구매액 증가와 고객 거래 건수 증가에 힘입어 2027 회계연도 2분기 동일 매장 매출이 4% 증가했다고 발표했습니다. 조정 희석 주당순이익(EPS)은 1.22달러로 11% 증가했으며, 조정 세전이익률은 50베이시스 포인트(bp) 확대된 11.9%를 기록했습니다.

핵심 요약

• 연결 동일 매장 매출은 회사의 계획을 상회하며 4% 증가했습니다. 홈(생활용품) 카테고리가 의류 카테고리보다 우수한 실적을 기록했습니다.
• 조정 매출총이익률은 주로 상품 마진 상승과 관세 혜택에 힘입어 70bp 상승한 31.4%를 기록했습니다.
• 마맥스(Marmaxx)의 동일 매장 매출은 상품 구성 및 배분 문제가 실적에 부담을 주면서 1% 증가에 그쳤습니다. 경영진은 이 문제를 자체적 원인에 의한 것으로 설명했으며, 연말 연휴 시즌까지 대폭적인 개선이 이루어질 것으로 전망했습니다.
• 홈굿즈(HomeGoods), TJX 캐나다, TJX 인터내셔널은 각각 7%, 6%, 7%의 동일 매장 매출 성장률을 달성했습니다.
• TJX는 2027 회계연도 조정 희석 EPS 전망치를 5.15~5.20달러로, 조정 세전이익률 가이던스를 12.0%~12.1%로 상향 조정했습니다.
• 회사는 장기 매장 잠재력을 500개 늘어난 7,500개 매장으로 상향 조정했으며, 내년부터 연간 매장 출점률을 4%로 가속화할 계획입니다.

주요 재무 실적

조정 실적에는 2분기 말까지 수령한 관세 환급금 및 이와 관련된 추가 보상 비용 미지급 계상액이 제외되었습니다.

사업 및 영업 실적

마맥스

경영진은 마맥스의 실적 부진 요인으로 일부 매장 및 카테고리의 부적절한 상품 구성을 꼽았습니다. 회사는 이 문제가 가격 책정이나 직접적인 오프프라이스(off-price) 경쟁에서 비롯된 것은 아니라고 설명했습니다.

이번 분기 3개월 모두 동일 매장 매출이 플러스를 기록했으며, 5월이 6월과 7월보다 소폭 강세를 보였습니다. 경영진은 8월에 개선세가 나타났다고 보고했으며, 향후 몇 달 동안 마맥스의 동일 매장 매출 성장률이 2%~3% 수준으로 이동할 것으로 예상하고 4분기에는 개선에 대한 확신이 더욱 커질 것으로 전망했습니다.

TJX는 유사한 상품 구성 및 배분 문제의 위험을 줄이기 위해 추가적인 기획 및 모니터링 프로세스를 도입했습니다.

홈굿즈 및 해외 사업

홈굿즈는 장식용품, 시즌 상품, 소모품, 고가 상품 등 광범위한 카테고리의 호조로 수혜를 입었습니다. 240bp의 영업이익률 확대는 동일 매장 매출 레버리지 효과, 영업 효율성, 관세 비용 감소를 반영한 결과입니다.

TJX 인터내셔널은 유럽에서의 지속적인 호조와 호주에서의 견조한 매출을 기록했습니다. 회사는 이번 분기 동안 스페인에 두 번째 T.K. 맥스(T.K. Maxx) 매장을 오픈했으며, 고객 반응이 예상보다 강했다고 밝혔습니다.

매장 확장

TJX는 현재 진출한 10개국에서 기존 브랜드 파워를 활용해 장기 매장 잠재력을 현재 매장 수보다 2,200개 이상 많은 7,500개로 상향 조정했습니다. 수정된 목표는 다음과 같습니다.

• T.J. 맥스(T.J. Maxx) 및 마샬(Marshalls) 매장의 합산 잠재력 3,300개(300개 증가).
• 홈굿즈 부문 매장의 잠재력 2,000개(200개 증가).
• 시에라(Sierra) 및 홈센스(HomeSense)의 빠른 확장(전사적 목표인 연간 4% 성장을 상회하는 속도).

경영진은 백화점 폐업의 영향을 받는 시골 지역 시장, 기존 시장에서의 매장 밀집 배치, 도심 지역을 위한 소형 포맷 매장을 확장 기회로 꼽았습니다. 신규 매장들은 회사의 기대를 지속적으로 상회하는 실적을 내고 있습니다.

경영진 가이던스

3분기 경영진은 주로 연료비 상승으로 인해 조정 매출총이익률이 전년 동기 대비 40~50bp 하락한 32.1%~32.2%가 될 것으로 예상합니다. 조정 판관비율은 전년 대비 10bp 개선된 20.0%로 전망됩니다.

2027 회계연도에 대해 TJX는 조정 세전이익률 가이던스를 30~40bp 확대된 12.0%~12.1%로 상향 조정했습니다. 조정 매출총이익률은 31.2%~31.3%로 예상되며, 조정 판관비율은 19.5%로 보합세를 유지할 것으로 전망됩니다.

조정 전망치에는 2분기에 수령했거나 3분기에 예상되는 관세 환급 혜택과 관련 추가 보상 비용 미지급 계상액이 제외되어 있습니다. 4분기 가이던스에는 추가적인 관세 환급이 없을 것으로 가정합니다.

위험 요인 및 주시할 부분

• 마맥스 실행력: 부적절한 상품 구성 및 배분이 매출과 거래를 제한했습니다. 회복 속도는 연말 연휴 시즌의 핵심 변수로 남아 있습니다.
• 연료비 및 운송비: 연료비 상승과 운전기사 수급 감소가 하반기 매출총이익률에 압박을 가할 것으로 예상됩니다.
• 매출 레버리지 감소: TJX는 상반기에 5%의 동일 매장 매출 성장을 달성했으나 하반기에는 2%~3%를 가이던스로 제시하고 있습니다.
• 평균 객단가 상승세 둔화: 경영진은 향후 6개월 동안 객단가 증가세가 둔화될 것으로 예상하지만, 카테고리 구성 및 프리미엄 공급업체로부터의 기회주의적 매입이 단기적인 변동성을 유발할 수 있습니다.
• 매장 임금 비용: 추가적인 매장 임금 및 급여 비용으로 인해 2분기 조정 판관비율이 상승했습니다.

애널리스트 Q&A 주요 내용

• 경영진은 마맥스의 문제가 가격 인상, 가치 인식 약화, 경쟁 압력보다는 상품 수급 가능성 및 구성에 관한 것이었다고 말했습니다. 보고된 거래 건수는 매장 방문객 수가 아닌 계산대를 통한 구매 건수를 나타냅니다.
• TJX는 기획 및 배분 프로세스의 변화가 오프프라이스 매입 모델의 기반이 되는 유연성을 해치지 않으면서 모니터링을 개선할 것으로 기대합니다.
• 경영진은 홈굿즈가 차별화된 '보물찾기(treasure-hunt)'형 상품 구성을 유지하면서 보충 가능한 제품을 통해 반복적인 방문을 늘렸다고 밝혔습니다.
• 회사는 창고 스테이징 및 배분 능력이 이상 기후 패턴이나 지역적 차질에 대응할 때 이점으로 작용한다고 판단합니다.
• TJX는 상반기 동안 페이스북, 인스타그램, 틱톡, 핀터레스트, 유튜브에서 브랜드 전체에 걸쳐 11억 회의 동영상 조회수를 기록했으며, 홈굿즈에서만 3억 회 이상을 기록했습니다. 경영진은 틱톡과 유튜브의 동영상 시청 완료율이 업계 기준을 상회했다고 말했습니다.

실적 발표 컨퍼런스 콜 전문(Transcript)

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the TJX Companies Second Quarter Fiscal 2027 Financial Results Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded, August 19, 2026.

I would like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of TJX Companies. Please go ahead, sir.

Ernie Herrman

Thanks, Courtney. Before we begin, Deb has some opening comments.

Debra McConnell

Thank you, Ernie, and good morning. Today's call is being recorded and includes forward-looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause the actual results to vary materially from these statements. including, among others, the factors identified in our filings with the SEC.

Please review our press release for a cautionary statement regarding forward-looking statements as well as the full safe harbor statements included in the Investors section of our website, tjx.com. We have also detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and in the Investors section of tjx.com, along with reconciliations to non-GAAP measures we discuss.

Thank you, and now I'll turn it back over to Ernie.

Ernie Herrman

Good morning. Joining me and Deb on the call is John. I want to begin by thanking our talented associates for their continued dedication to TJX and their commitment to delivering great value and an exciting treasure hunt shopping experience to our shoppers every day.

Now to our second quarter results. Overall, comparable sales increased 4%, which was above our plan. Our second quarter comp performance highlights the benefit of our global diversified business. While sales at our Marmaxx division were below our expectations, our 3 other divisions delivered comp sales increases of 6% to 7%, which drove results that exceeded the high end of our plan.

At Marmaxx, we believe we could have executed our store mix better. And by that, I mean, we could have been sharper on having the right goods in the right stores at the right time. We are convinced that the issues were self-inflicted and within our control, and we have made good progress working through them. We are seeing improvement at Marmaxx to start the third quarter and are confident that we will see greater improvement by the holiday selling season.

As to second quarter profitability, I am very pleased that once again, profits were well above our plan. Given this, we are raising our full year outlook for pretax profit margin and earnings per share. John will give some more detail about our second quarter results and guidance in a moment.

As we look to the second half of the year, we are laser-focused on driving the opportunities that we see for the business. Third quarter is off to a strong start, and availability of merchandise continues to be outstanding. We believe we have the right initiatives in place to drive sales and customer traffic to all of our retail banners and I am confident we will execute on our plans.

Longer term, we continue to see a long runway for growth ahead for TJX. We are excited about the continued potential we see to keep growing sales, to keep expanding our global footprint and to keep capturing additional market share around the world for many years to come.

Now I'll turn the call over to John to cover our second quarter results in more detail.

John Klinger

Thanks, Ernie. I also want to add my gratitude to all of our global associates for their continued hard work and commitment to TJX. As I recap our second quarter results, I'm going to speak to everything on an adjusted basis, which excludes the impact from the tariff refunds received as of the end of the second quarter and the related incremental compensation expense accruals.

Reconciliations detailing the net impact of these items on our results can be found in today's press release and on the Investors section of our website. Now show some additional details on the second quarter versus last year. As Ernie mentioned, our second quarter consolidated comp sales increased 4%, which was above our plan. Our second quarter comp was driven by a higher average basket and an increase in customer transactions.

Further, our home categories outperformed our apparel categories. Adjusted pretax profit margin was 11.9%, up 50 basis points versus last year and well above our plan. Adjusted gross margin was 31.4%, up 70 basis points versus last year and driven by an increase in merchandise margin, mostly due to tariff favorability. Adjusted SG&A was 19.7%, unfavorable by 20 basis points versus last year and driven by incremental store wage and payroll costs.

Net interest income was neutral to pretax profit margin versus last year. Adjusted diluted earnings per share were $1.22, up 11% versus last year and well above our plan. Second quarter adjusted pretax profit margin and adjusted diluted earnings per share significantly exceeded our plan, primarily due to operational expense efficiencies, a higher merchandise margin and expense leverage on better sales, partially offset by contributions to TJX's charitable foundations.

Now to our second quarter divisional performance. At Marmaxx, comp sales increased 1% and were entirely driven by a higher average basket, partially offset by a small decrease in customer transactions. While sales were lower than we would have liked, comp sales increased across all region and income demographic bands.

Adjusted segment profit was 14.2%, flat versus last year. We delivered another good quarter of sales performance at our Sierra stores as we continue to grow this chain across the U.S. At our U.S. e-commerce sites, we continued to add new brands to deliver even more freshness for our online shoppers. We are excited about the initiatives we have planned for our T.J. Maxx, Marshalls and Sierra banners this fall and holiday season. Long term, we are confident in the market share opportunities we see for our largest division. HomeGoods delivered an outstanding 7% comp sales increase primarily driven by higher average basket and customer transactions were also up.

We are very pleased to see strength at both our HomeGoods and HomeSense banners and across all region and income demographic bands. Adjusted segment profit margin was 12.4%, up 240 basis points our HomeGoods and HomeSense banners offer customers a highly differentiated mix of home fashions from around the world at compelling values. We are the largest off-price home fashion retailer in the U.S. and believe that we are set up very well to continue to capture an even larger share of the market going forward.

At TJX Canada, comp sales were excellent, increasing by 6%. The comp was primarily driven by an increase in customer transactions. Adjusted segment profit margin on a constant currency basis was 16.3%, up 30 basis points. We are the leading off-price retailer in Canada and are very pleased with our strong brand awareness and loyal shopper base.

We continue to see an opportunity to further grow across Canada with our 3 retail banners. At TJX International, comp sales increased an outstanding 7%. This comp was also primarily driven by an increase in customer transactions. We were extremely pleased with the strong, consistent sales performance in Europe and excellent sales in Australia.

Adjusted segment profit margin on a constant currency basis was 7.3%, up 210 basis points. During the quarter, we opened our second T.K. Maxx store in Spain. And again, customer response was extremely positive. We are excited about our growth plans for our international division and have great confidence that we can attract even more shoppers in Europe and Australia over the long term.

Moving to inventory. Second quarter balance sheet inventory was up 7% and inventory on a per store basis was up 2%. We feel great about our inventory levels and are convinced that we are well positioned to take advantage of the plentiful buying opportunities in the marketplace. As to our capital allocation, we continue to reinvest in the growth of our business while returning $1.3 billion to shareholders through our buyback and dividend programs in the second quarter.

Now I'll turn it back to Ernie.

Ernie Herrman

Thanks, John. I'd like to start by highlighting the opportunities we see that give us confidence that we can drive sales and traffic in the second half of the year. First, we are confident that consumers will continue to look for value in the current environment. We believe we have a large and deeply passionate customer base, strong brand perceptions and an offering that resonates across many age and income brackets.

We are convinced that we remain a very attractive option for shoppers who want great brands and fashions at excellent value. and believe they will seek out our retail banners this fall and holiday season.

Second, we're excited about the product category initiatives that we have planned. We have become a year-round gifting destination and feel particularly good about our initiatives in this area. This strategy has worked well for us, and we believe it helps us stay top of mind for consumers.

All of this gives us confidence that our exciting ever-changing merchandising mix can inspire our shoppers and encourage more frequent visits to our stores.

Third, product availability continues to be off the charts across all categories and from a wide range of brands. Further, there continues to be more availability in the marketplace than we could ever buy. I'm convinced that our team of more than 1,400 buyers will bring shoppers the right assortments at the right values.

Lastly, we are excited about the marketing we have planned for this fall and holiday season. We will continue to follow consumer viewing habits by employing a variety of channels with a strong emphasis on digital and social media. Our campaigns will continue to reinforce our value leadership with insightful and entertaining creative content that connects with shoppers across a wide range of age and income shopper demographics.

We believe that our thoughtful integrated marketing approach will help us attract new customers and keep us top of mind with our existing shoppers. Beyond this year, I am confident that TJX has significant opportunities to capture additional market share over the long term. I'll briefly cover the key characteristics of our business that give us confidence.

First is our reputation as a trusted value leader in the United States, Canada, Europe and Australia. We believe this is a tremendous advantage, and our top priority remains offering great value every day to our customers.

Second, we are a global sourcing machine. We work with the universe of approximately 21,000 vendors every year to curate an unmatched mix of good, better, best merchandise for our customers.

Third, we are convinced that we have some of the strongest vendor relationships in retail. We have decades-long relationships with many of our vendors, both domestically and internationally.

Further, we believe vendors love to work with us as we are in the market buying consistently throughout the year. We can introduce their brand to new consumers and we offer them a very attractive way to grow their business.

Next, we attract shoppers across a wide range of income and age demographics in the United States, Canada, Europe and Australia. With our proprietary planning and allocation systems and expertise, we can create a differentiated treasure hunt shopping experience that appeals to a broad range of shoppers across each of our markets.

Fifth, many aspects of our business are driven by flexibility, which we see as a key advantage. This includes our buying, our store formats and our supply chain and systems.

Next, we continue to see tremendous opportunities to significantly grow our store base around the world. Today, we are increasing our long-term store growth potential by 500 stores to a total of 7,500 stores or over 2,200 more stores. with just our existing retail banners within our current 10 countries. This now reflects the long-term potential for our T.J. Maxx and Marshalls banners to expand an additional 300 stores to a combined 3,300 stores and for the HomeGoods division to expand an additional 200 stores to 2,000 stores.

Further, we are planning to accelerate our store openings to 4% starting next year to take advantage of the growth opportunities we see out there. I want to assure you that we are extremely confident that there will be plenty of quality merchandise available to us to support our growth plans.

Last and most importantly, is our exceptional talent around the world. I truly believe that the depth of our off-price knowledge and expertise and the longevity of our talent within TJX is unmatched. Talent development has always been a priority, and we remain laser-focused on teaching and training the next generation of TJX leaders.

Also, I am very proud of our culture and believe that it will be a tremendous advantage as we continue our growth around the world. I'm convinced that the combination of all these core strengths of our business set us apart from many other major retailers.

Further, I believe these have allowed us to successfully navigate many different kinds of retail and macro environments over our nearly 50 years as a company, and I am confident they will continue to benefit us.

Summing up, we are pleased with the overall performance of TJX in the second quarter. Again, our above-plan results demonstrate the power and benefits of our global diversified business. I want to reiterate that at Marmaxx, we have seen a sales improvement to start the third quarter and are confident we will see greater improvement by the holiday selling season.

The third quarter is off to a strong start, and we believe we are strongly positioned in today's consumer environment. We are excited about the initiatives we have planned for the remainder of the year.

Importantly, over the near and long term, we plan to continue to play offense in our approach to marketing, merchandising, the in-store shopping experience, global store growth and our investment in talent. I'm convinced that TJX has set up extremely well to capitalize on the growth opportunities that we see around the world for many years to come.

Now I'll turn the call back to John to cover our guidance, and then we'll open it up for questions.

John Klinger

Thanks again, Ernie. As I recap our guidance for the remainder of the year, I'm going to speak to everything on an adjusted basis which excludes the benefit from tariff refunds that we received in the second quarter and expect to receive in the third quarter.

Our adjusted guidance also excludes incremental compensation expense accruals related to the tariff refunds for the second, third and fourth quarter. Again, reconciliations can be found on the Investors section of our website.

Starting with the third quarter, we are planning overall comp sales to be up 2% to 3%, consolidated sales to be in the range of $15.6 billion to $15.8 billion, up 3% to 5% versus last year. Adjusted pretax profit margin to be in the range of 12.3% to 12.4%, down 30 to 40 basis points versus last year's 12.7%. Adjusted gross margin to be in the range of 32.1% to 32.2%, which would be down 40 to 50 basis points versus last year's 32.6%. This would be primarily driven by higher fuel costs, adjusted SG&A to be 20%, 10 basis points favorable versus last year's 20.1%.

We're assuming net interest income of $28 million, which we expect will be neutral to our third quarter pretax profit margin versus last year. This assumes that we will pay off the $1 billion note maturing in September. Our third quarter guidance assumes a tax rate of 24.6% and a weighted average share count of approximately 1.11 billion shares.

As a result of these assumptions, we're expecting third quarter adjusted diluted earnings per share to be in the range of $1.30 to $1.32, up 2% to 3% versus last year's $1.28.

Moving to the full year. We continue to expect overall comp sales growth of 3% to 4%. We expect full year consolidated sales to be in the range of $63.4 million to $63.8 billion, up 5% to 6% versus last year. We are increasing our full year adjusted pretax profit margin guidance to be in the range of 12% to 12.1%, up 30 to 40 basis points versus last year's adjusted 11.7%. We now expect full year adjusted gross margin to be in the range of 31.2% to 31.3%, up 20 to 30 basis points versus last year's adjusted 31%.

We now expect full year adjusted SG&A to be 19.5%, flat versus last year's adjusted 19.5%. We're assuming net interest income of about $131 million, which we expect to be neutral to our full year pretax profit margin versus last year. Our full year guidance also assumes a tax rate of 24.6% and weighted average share count of approximately 1.12 billion shares.

As a result of these assumptions, we're increasing our full year adjusted diluted earnings per share to be in the range of $5.15 to $5.20 up 9% to 10% versus last year's adjusted $4.73.

Lastly, our implied guidance for the fourth quarter assumes no further tax refunds and excludes the incremental expense accruals related to the third and fourth quarter tariff refunds. For the fourth quarter, we are expecting overall comp sales to be up 2% to 3%. Adjusted pretax profit margin to be in the range of 11.9% to 12%, down 20 to 30 basis points versus last year's adjusted 12.2%. And adjusted diluted earnings per share to be in the range of $1.44 to $1.47, up 1% to 3% versus last year's $1.43.

In closing, I want to reiterate that we are excited about the growth and market share opportunities we see in the near and long term. We are in an excellent position to continue to invest in the growth of TJX while simultaneously returning significant cash to our shareholders. Thank you, and now we're happy to take your questions.

Operator

Our first question comes from Matthew Boss.

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Matthew Boss

So 2 questions, Ernie. First, could you speak to the progression of same-store sales at Marmaxx during the second quarter and elaborate on the sales improvement that you cited in August at Marmaxx and drivers of the strong start to the third quarter.

And then, John, could you talk to the recent new store performance metrics that you've seen and just the opportunity you see today to raise your store target?

Ernie Herrman

Okay, Matt, I think, John, John, you want to I'll start with the quarter and then I'll take over.

John Klinger

So across the board, we came out stronger in May and then we saw consistent sales in June and July, pretty much across the board.

Ernie Herrman

And then, Matt, on -- I think you're referring to talking about the strong start to the quarter and what we're seeing there. Yes, across all of the businesses, and we mentioned 1 of the strengths that you see here. And obviously, there's a concern about the Marmaxx comp that we had as well. But I think what we exemplified here in this quarter is the ability to be consistent by having all of our other businesses outperform and significantly from Canada to Europe to HomeGoods and then Marmaxx's underperforming due to some execution issues.

I would tell you all of them I like the way we're trending with all of them starting off this Q3 in August. Marmaxx, we're seeing improvement from where we were trending before. And then I'm really looking from Marmaxx as we move ahead to see more significant improvement as we get to fourth quarter. But I think you're asking about overall strong start across the board.

John Klinger

And then to answer your second question, so we look at this, obviously, very frequently our store potential. And we have been seeing for a bit of time that we had some opportunity in Marmaxx and HomeGoods to continue to grow our store base. So we took the opportunity this quarter to increase Marmaxx by 300 stores, HomeGoods by 200 stores.

And again, for Marmaxx, we're seeing opportunities in rural markets where we see department stores are closing. We're seeing the opportunity as the store as we've experienced strong comp growth for so many quarters that we're seeing the ability to put stores closer together than we thought before. And then the the small format store that allows us to expand in a lot of densely populated urban areas as well.

And so we have been seeing the opportunities to increase our store growth potential and the annual growth from what we were saying before, a unit 3% growth to 4% growth based on the availability that we're seeing pretty much across the board. And so when we look at where we see the opportunities, we see it across every single brand that we have.

Ernie Herrman

Yes. So we're -- to John's point, Matt, we're seeing that additional 1% store growth across the board also. That's not just a 1 division or 2 division driving that. Yes. The other thing, I think the teams have done a good job is getting more flexible in our approach to the smaller formats, what John is talking about is our teams, whether it's planning and allocation that shift the goods to the stores and our real estate division, which designs and constructs the stores, finds the locations we're getting more flexible based on population density, et cetera, in some of these locations, as John mentioned, which I think is also opening up opportunity.

John Klinger

Right. And then just to I know you asked this and I didn't answer it. The performance of our new stores for a long, long time, we've been exceeding our expectations on our new store openings for quite a while. And so we see no concerns there either.

Operator

Our next question comes from Lorraine Hutchinson.

Lorraine Maikis

I was hoping to get a little more insight on what went wrong at Marmaxx. The steps you've taken to fix it -- and then how quickly do you think you'll be back to a more normal 2% to 3% comp cadence at Marmaxx specifically?

Ernie Herrman

Yes. Great question, Lorraine. Obviously, this is one that we thought would be important to discuss on the call, which is why we had it in the script as well. where -- well, without giving specifics to the families of business, which you know we can never do that, if you go back, you've covered us for a while, even a number of years ago, we had execution issues.

We didn't give the areas specifically because of competitive reasons. However, what we can say is we've identified it was pretty obvious to which areas they are in, where we did not have I would say, the right mix -- merchandise mix in T.J. Maxx and in Marshalls, and it was really entirely self-inflicted and within our control to the point that I've been involved and all teams have been involved in those areas, which involve the merchants, buyers, merchandise managers, GMMs, senior merchants, our planning and allocation teams were involved and identifying the execution issues. I mean, all the way from buyers and planning all the way up to me, everyone's involved.

We've identified them. And I think we're well on our way to fixing the issues. I think you know from our past that when we focus on missed execution issue, we are able to fix it pretty readily. I would say when you -- and you started to hint that at your question, what type of timing gets us back to the 2% to 3%. I would say we're we're seeing a trend improvement already in August versus in Q2.

I am most confident we'll be seeing what you're talking about by Q4 and I think a transition toward that over the next couple of months. I hate to lock myself in on an exact number right now, but we're feeling really good about it. Again, everyone is involved. We know exactly where we fell down and I would tell you, we had nothing to do with if there's any question on, this have to do with any competition out there of any sorts, it had nothing to do with that.

We've measured -- we've actually gone out and measured where our stores are versus direct off-price competitors. And our comps are actually pretty much identical to wherever direct off-price competitors are near us versus away from us, our stores are comping identically. So which, by the way, the good and the bad of that is it tells us it's our own execution. So I guess in the past, we -- I always talk to the teams, it's really always up to us generally when we've had a tough a tough business. So I go back to -- on a much larger scale, John and I talk about this always when you go back to Europe a number of years ago, as you know, we did not have strong execution there.

In fact, we put an objective of sales and getting to a more profitable bottom line that took a little longer than this will take by far, but that was something we identified execution issues there. And we fixed it on a large-scale total business situation. So hopefully, that answers your question, but obviously, a very pertinent question.

Operator

Our next question comes from Paul Lejuez.

Paul Lejuez

Just a clarification. I think you said May started stronger -- and then June, July was similar curious of June, July were both positive and this quarter-to-date is positive. And then on the small decline in transactions that you referenced, Ernie, on the Marmaxx side, curious if that was traffic driven or conversion? And if there's anything that might be a little off from a price point perspective, that might be impacting your conversion, maybe we're a little bit too high. Curious if you could talk about that dynamic.

John Klinger

Yes. So just to clarify, and I believe you're specifically asking about Marmaxx. Marmaxx started the quarter slightly stronger in May, June and July were consistent. All 3 months were positive comps.

Ernie Herrman

Yes. The decline in transactions from what we can see had nothing to do with conversion and more to do in the cases of where we didn't have -- we had -- it wasn't a like item where retails went up and the value wasn't good. We have count shopped aggressively. Our values are really the best around. Nobody is underselling us. And what it is without giving specifics, it's more about what we didn't have in the mix.

And so what that does is you don't necessarily capture that sale. And it wasn't really an execution on what we had in the mix. So -- and that would apply to really all of those handful of areas that I spoke about earlier. And so that's when you you're just not -- you're not selling the customer when she's in. I guess you could say, if we had it, would we have converted on the visit a little higher, hard to measure that, but we know again what the problem was there.

Paul Lejuez

So Ernie, you think not having that is more of a traffic issue that customers knew that the product wasn't there, rather than...

Ernie Herrman

No, no, no, no. Because again, our traffic is driven off of every day. A lot of our traffic is word of mouth is just constant traffic, right? We have a regular frequency of traffic. We don't do institutional pricing item advertising. So -- and people know that where a treasure hunt operate right, we're treasure hunt.

So they know we're going to sometimes have things or not have things -- the issue is if we don't have some of the things that are kind of impulse driven, they're in the store and maybe they would have picked it up anyway. They don't necessarily know we're going to have. That's where we lost some. Then we did lose some on categories that were more basic. -- again, I can't see you what they are. for competitive reasons where we didn't have the appropriate mix. I don't think the customer knew we didn't have it, but they probably came in and weren't able to buy it.

John Klinger

I mean our transactions, we quote our transactions through the register.

Ernie Herrman

Right.

John Klinger

It's not footfall.

Ernie Herrman

We don't have people counters yes. On, Paul, definitely the right way. I would be asking the same question.

Operator

Our next question comes from Brook Roach.

Brooke Roach

Ernie, a moment ago, you spoke to execution issues as more of a factor of what you didn't have in the mix than what you did. Your buyers typically have a very strong knowledge and knowing exactly what the customer wants and what categories and items are trending -- what do you think led to this misstep on their knowledge of the pulse of the customer?

And what changes are you implementing in buying and allocation to be a little bit more consistent as you move into that important holiday season?

Ernie Herrman

Yes. So we have -- again, I can't give you the exact -- we've instituted 2 more systematic changes and planning. I can't tell you what they are, but planning is putting in something that will help monitor the situation so that it doesn't happen to that degree. -- again, remember, we're a bit of an art form secret sauce situation where things aren't so rigid merchants are making their best calls at the time.

And sometimes, I like everyone to realize Marmaxx has quarter after quarter of really strong business. And the last time maybe that we had something like this might have been about 8 years ago, -- so I want to be careful on overreacting to what was definitely a lack of execution in a handful of areas because this is something that can happen in a business that's a bit of an art form. And you look for certainly closeouts in certain areas, and we plan a little bit ahead and sometimes, we don't put in place the right plans and the right combination of executing to those plans.

So there's a lot of moving parts. It's rare, but it can happen. So we put some basically systematic processes in place. Some of it and really is involved from the planning side, ironically, which is supposed to help the buyers on this.

And I think that's really going to help mitigate this going forward. as well as, by the way, as I think I mentioned earlier, we had everyone involved on these discussions about these areas from buyers to MMs, the GMMs to the President of Marmaxx, the head merchants in Marmaxx, myself, the Senior Executive Vice President, also and I mean everyone has been involved, the heads of planning, et cetera, to get it institutionalized. So good question, Brook. But I think I think we have it all kind of circled.

Operator

Our next question comes from Alex Stratton.

Alexandra Straton

Perfect. Maybe I'll move on to another division here and then talk about HomeGoods. Could you maybe unpack that really strong comp results by traffic or ticket as well as the categories and whether you think it's sustainable for that business to continue doing high single-digit comps into the back half?

And similarly, just on this division as well, it's been delivering great substantial underlying margin expansion. Can you talk about what's driving that improvement? And if there's any structural constraints as you think about that business potentially becoming a mid-teens margin segment over time?

Ernie Herrman

That's very good. question, Alex, across the entire HomeGoods business, I like it. The -- first of all, that team has been executing. As you said there, when you asked the question consistently for a while now, and somewhat bucking the trend in the industry, right? I think they have been succeeding really over the last number of years at creating a level of excitement and impulse treasure on shopping across anything from domestic categories, which are really second to none in value that we deliver anywhere from -- you could go to our kitchen department with gadgets to kitchen linens to towels, sheets, giftware, gourmet food from Europe to seasonal decor, wall decor.

Everything is hitting on all cylinders. They -- and we've talked about this before, their consumable business items that get replenished. You probably can guess what those categories are. This team has put in place something that I think is continuing to drive additional steady traffic because people are now aware not only all the impulse that everyone for years has written about in HomeGoods, they're getting day in, day out consumable staple product that they need to replenish on a regular basis, that is -- these teams have done an amazing job at that.

I think the store execution also in terms of ease of shopping, our store teams there have done an amazing job on the presentation within HomeGoods. It's such an easy store to shop, in what, in some cases, is difficult categories to shop. And I think our store execution there is different. And I think our home merchants across the corporation, I know you're asking about home goods, our home business across the corporation, which is, again, is over 1/3 of our business, over 35%, give or take now, is healthy across the board.

And I think that's because home goods and a lot of the home merchants collaborate in a strong way. And what that has created is an even stronger diversity of mix throughout our home business in HomeGoods and across the rest of the divisions in TJX. So I think -- yes, I think we have a way more opportunity as we move ahead. By the way, admittedly helped by, I think, the execution of competition in home around the board. In every country and specifically in the United States, competition there is just not, I would say, up to par and does not give you the fashion utilitarian approach of goods that we deliver in HomeGoods.

So we -- as you can imagine, and you mentioned the margin, I know John will probably talk to that briefly. But also part of the team, they're driving top line and margin expansion at a rate that is helping to move the needle within TJX. And I know you're asking about HomeGoods, I just also have to mention Canada, as Canada and Europe are also -- sometimes they don't get in a lot of airtime, and I'm only bringing it up because you're bringing up one of the other divisions. Those divisions -- and Canada specifically, is the size of getting close to the size of HomeGoods and in those divisions, profit increases and sales increases Europe as well are continuing to just -- all those teams are executing at a very high level and taking market share in their geographies, as is HomeGoods here domestically. John, I don't know if you have...

John Klinger

Yes, just to expand a little bit on what order was talking about there as far as HomeGoods. The biggest driver that Ernie mentioned was, again, the top line growth. I mean, we the 7 comp is certainly going to expand margin. We also had nice operational efficiencies that we saw in the division. And then, of course, the largest item, which is the merchandise margin improvement, mainly driven by lower tariff costs.

Operator

Our next question comes from Michael Binetti.

Michael Binetti

A quick one on the gross margin. I think with the strong start to the year before today, there is some potential for maybe upside to the gross margins that you guys were thinking about in the back half. I think you're more or less keeping the second half the same today for gross margin, maybe 10 basis points lower at the low end or something small like that.

But can you -- maybe just walk us through the changes to the second half gross margin plan that net out to holding it flat? And maybe it's a boring question, but you added some freight and I would assume maybe there's some Marmaxx markdowns. It seems like maybe there was a potential for some new positives that we should be considering?

John Klinger

Yes. So Michael, if I'm comparing the first half to the second half, the biggest piece is going to be the fuel and the fuel and the freight rates that we're seeing, so in the first half, we had favorability on our freight accruals that we -- excuse me, the freight mark-to-market of our hedges that we had out there.

And again, we have to mark-to-market those at every quarter. So the back half, we're seeing higher fuel rates comparatively speaking. Freight rates also due to -- due to what we -- what the trucking companies are seeing, we're seeing less driver availability, which is driving up price and so that's due to either younger kids that are going into truck driving or a combination of that and some of the things that we've seen as far as foreign drivers leaving the country.

And some of the pressure that we've seen there. Certainly, the first half having a 5% comp in the first half versus guiding to a 2% to 3% in the back half is a piece of it. And then merchandise margin favorability in the first half that we saw. So when you look at the institution of the IEEPA tariffs last year, there were goods that were placed before the tariffs were put in place.

So we didn't have an opportunity to negotiate those tariffs. So we're anniversarying that. And that's the exact opposite happened this year where the -- we had goods that had negotiated a tariff out and then the tariff was eliminated before the goods were landed. So those are the 3 main things that differentiate the first half from the second half. Okay. Does that -- does that answer your question?

Michael Binetti

Yes. I guess -- I think so, was there any new positives versus where we were 90 days ago as you think about the back half? I know you're doing front half and back half.

John Klinger

I mean our front half and back half, back half is, again, is very similar to what we had guided to underlying guided to at the at the second quarter, which is why the $0.05 beat, we flowed the $0.05 on the full year. So obviously, there's puts and takes, but for the most part, we're consistent.

Michael Binetti

Okay. And then if I could sneak 1 more in on profitability since you made me think about this year. I was pretty pleasantly surprised to see Marmaxx able to hold the segment margin at the 1 comp. Is there -- can you just let us know for our models, is there any shifts or any transitory benefits we should be mindful of in the second half?

John Klinger

No. No, nothing there. Again, we called this out in our prepared remarks, we did experience lower tariff costs in the second quarter. So I'd say that what we put out there as far as our guidance is what we believe in, and we're going to work hard to beat that guidance during the quarter.

Operator

Our next question comes from Jay Sole.

Jay Sole

Ernie, I want to ask you about the 7,500 long-term store target. Can you just tell us about Sierra and also Home Sense and maybe a little bit about Europe as well, how those fit into the plan. Then I think you very specifically called out within your existing countries. Why not sort of talk about maybe new potential countries that the company might be going through over time.

Ernie Herrman

Yes. Well, first of all, let me talk to the last thing first, which is we typically well, I would say we're always looking at new countries for potential as we did with -- and it's not always the same structural deal, right? But as you know, we went into Mexico our JV and then our investment in brands for less. And Spain, which John talked to is doing really well. And I think, by the way, part of our new store opping is -- we're pretty bullish on new Spain openings down the road, realizing that the customer base is reacting even stronger than we anticipated there. That's not part of our no, not even part of our numbers.

John Klinger

Potential opportunity in the future.

Ernie Herrman

Yes. Yes. The other ones you're asking about is Sierra is disproportionate, that adds disproportionately into the growth, right? It's a higher growth rate than the 4% by far. And so as HomeSense. So those are both well above 4%. -- growth because they're both doing well. And we are always looking at new market potential just so you know, because we have shown as well as by Australia also any new market we've gone into if we've brought the TJX secret sauce and TJX tenured associates to lead it, we have done very well.

So again, I can't say enough about what we're showing internationally, I'm glad you're asking about this. What we're showing internationally is the ability I think we're better than ever at showing that we can grow our model wherever there's a market internationally. So as much as I can't tell you what the next country is, you can be assured that we're looking.

Operator

Our next question comes from Marni Shapiro.

Marni Shapiro

I'm curious, can we talk a little bit about some of the other categories at Marmaxx. I know you don't want to get into too many details. You talked about missing things that weren't there -- are those fashion things that weren't there? Or is it -- you mentioned impulse items? How is Beauty doing things like that, that to me feel like more impulse. And I think you talked about at HomeGoods across the board, things are doing well and things like staples that people need to replenish. And I remember being on the store tour and talking about how before are buying their dinner at HomeGoods to make that night. So are consumables still doing well. Can you just talk a little bit about the kind of non-apparel categories and none traditional home categories?

Ernie Herrman

Okay. So -- but Marni, I can -- obviously, I can't give you in Marmaxx, the ones I can't tell you whether it was fast or it's a bit of a mix, and I can't get too specific on which family or categories there. we felt on only because of competitive environment we're in and giving that information externally. I can tell you it wasn't any one dimensional. It was a combination of different things in Marmaxx and then at the same time, as witnessed by the fact in Marmaxx that we ran a one and not a minus 3 is we had a lot of categories that were performing well.

So we had a handful of areas that when they get hit, it pulls you down from what could be a 2 or 3 down to 1 is what happens because in Marmaxx, as you know, and clearly, the Street thinks this, the differences between a 1 and 3 is just a very that's kind of what we're talking about here, not a minus 3% to a plus 4% or so it can be a pretty -- you can have execution of a handful, and it throws you off where you're just missing the 2 comp by a little bit.

And in HomeGoods, across the board. I probably shouldn't just emphasize the replenishment as you call them, categories because it's really -- it's not just the consumables, it's across the board, a lot of the decorative and even some of the higher ticket areas are doing really, really well.

And I'm talking from lighting to wall categories to -- without giving anything away, I think they're just executing almost every mix at a very high level. And again, I think what the merchants are doing in HomeGoods and planning in the stores and executing distribution. They have all cylinders clicking marketing is they're giving the customer an experience they really -- it's difficult to find that experience in any other retailer. It's a different type of treasure hunt.

And some of the goods, as you know, are very unique that only HomeGoods has in a different type of manner, where as you go to apparel across the board, apparel that we would have and whether it's a TJ Maxx or Marshalls or Sierra that apparel fortunately is in other places where better value on it. I think in HomeGoods, you have some just unique product categories that creates a whole other reason to shop them. So -- and that's the innovation that I think I don't think anybody else in the home industry, and I'm not just talking to the United States. I'm talking Europe, Canada.

As you know, in Canada, we over index. That's our largest -- one of our largest market share geographies in the corporation. And now that you've had closures with the Bay, et cetera, we just continue to -- the Canadian merchants are doing an amazing job in HomeSense and winners and in Marshalls in Canada. And I think we don't talk about Canada a lot, but they just continue to gain major market share there as well.

Similar to what HomeGoods is doing here, Canada is doing there.

Marni Shapiro

Ask one follow-up on HomeGoods. Your back to college set was unbelievable. I mean, stop me in my tracks unbelievable. And I'm just curious if you saw a pickup in traffic and in trends at HomeGoods when that's set?

Ernie Herrman

Yes. They've been very pleased. I don't have the specifics in front of me, but I know the team has talked about their back to campus as what they call it the SET and the results have been very healthy. Yes. And I think to your point, the timing was perfect and it looked, I think better than ever. I'm glad you noticed it.

Marni Shapiro

It was stunning took my breath away. Congrats to that team.

Ernie Herrman

Yes. No, condo. And -- by the way, Marni appreciate that comment on that.

Operator

Our next question comes from Ike Boruchow.

Irwin Boruchow

Ernie, I guess I was going to ask -- I guess my first question -- on the freight side, I think you mentioned this to Michael already. But has the freight expectation in the back half changed versus 3 months ago? Or is this kind of what you thought it would be?

And then the follow-up to that is not so much August and back-to-school. But for the fourth quarter, there's more and more red flags around super El Nino weather impacts to the quarter. You guys have kind of done really well in those past couple of times, we've had these super El Nino going back to the model. Just curious if it's starting to affect the way that you're planning product, planning merchandise mix. Just kind of curious how you're starting to think about the holiday, even though I know it's early.

Ernie Herrman

I'll let John I'll start with a great question.

John Klinger

Yes. Yes. I mean, it is in line with what we were expecting. I mean, obviously, the -- at the beginning of the year, we -- in the first quarter, when we mark-to-market the fuel hedges, we knew that, that was taking a lot of benefit that so that when the actual -- when we got to the later, the next 3 quarters, it was going to be a negative impact. So yes, it was all expected.

Ernie Herrman

Yes. And Ike, on the weather thing, so what we do is we try not to get too specific on the weather, but the liquidity -- and I think you said this before, we've tended to no pun intended, weather the storm on these things pretty well, right? We -- because we keep our liquidity and our our shipping out of our warehouses is something we control a little better than traditional retailers.

Our goods don't have to necessarily go straight to the lanes and go to the stores if we think there's going to be an unusual weather pattern in a certain region. So where we -- this is a benefit of our model where we stage goods in our warehouses goods at most brick-and-mortar retailers come into the wells and have to go out. We have racks where we can manipulate and our planning organization is really good at reacting to any wild swings in weather or natural disasters or any of those red flags. I think that's what you're talking about.

So yes, I think for now, they just stay aware. And as you get -- as we get closer in, we can maneuver. Again, we are set up to maneuver better than most brick-and-mortar.

Operator

The final question of the day comes from Aneesha Sherman.

Aneesha Sherman

So you're seeing positive ticket growth all through most of last year and year-to-date this year, you have a stronger mix of better items, premium brands than you had a few years ago. Do you see more runway on this growth in ticket and AUR, especially in the current consumer environment?

And then a quick follow-up, Ernie, on your comment on marketing, playing offense on marketing. You've been really active on digital and social media marketing now for the last couple of years. Is there anything meaningfully different in terms of your type of marketing or your budget as a percent of sales that's changing this year?

Ernie Herrman

Okay, Aneesha. Yes. Well, first on your first question there, which was...

Aneesha Sherman

AUR in ticket.

Ernie Herrman

Yes, we've seen increases. I would tell you in this environment to what you said, I think we're going to moderate there. And I think it might -- we might be up a few is the way it's been kind of tracking, but I don't see a long-term trend there heading that way. It's probably going to moderate a little bit, and that's our best guess.

The only reason then I would tell you -- I think we've talked about this before, it's bottom up in our organization. So we don't dictate ticket from top down. And so if certain exciting categories or vendor deals come down and some of the better vendors, that can throw us for a little surprised in a good way where we have some crazy deals from better vendors that can have our ticket up short term.

And then you have category mixes, and that's what I think we've talked about in the past, is the mix of certain categories within the whole store is what sometimes has made our mix go up. It's not like-for-like items or categories where the retail has changed. It's the mix within the store has changed to more higher average retail categories.

So I think our escalation ticket will probably moderate, and that's just an educated guess over the next 6 months.

John Klinger

And then on your question on advertising spend. So we plan very consistently year-over-year. And then in the year, if we're having a strong year, oftentimes, we'll commit a little more dollars to the advertising to push that message, continue to feed the fire.

Ernie Herrman

Aneesha, though, so you have an idea about which is [indiscernible] is, in the first half of the year, we had $1.1 billion video views across Facebook, Instagram, TikTok, Pinterest, YouTube, which shows you that wouldn't have looked that way in the last couple of years, shows you how aggress -- by the way, we had over $300 million in home goods.

So $1.4 billion video views across those venues of Facebook, Instagram, Pinterest and YouTube. And that's just in the first half, which is where our customers are and the neat thing about it is we see -- the TJX brands see video completion rates on TikTok and YouTube that are significantly above the industry benchmarks, which that's really demonstrating that our content is really highly engaging to the customer.

So they're staying on watching the content through most of the video, which is not always the case with a lot of competition out there. They'll show it as a view, but they don't necessarily watch the entire thing like our customers are watching.

Thanks for the question. And I think that was our last question. Thank you all for joining us today. We look forward to updating you again on our third quarter earnings call in November. Thank you, everybody.

Operator

Ladies and gentlemen, that concludes your conference call for today. You may all disconnect. Thank you for participating.