Ross Stores outpaces TJX as investors reward raised second-half guidance
Divergent market reactions to strong second-quarter earnings highlight how off-price retail investors are prioritizing accelerated growth and raised forward guidance over steady baseline performance.
Ross Stores and TJX Companies reported strong fiscal second-quarter results for the 13 weeks ended August 1, 2026, but experienced sharply divergent stock market reactions. Ross shares climbed more than 4 percent on Friday after the retailer posted a 10 percent increase in comparable sales. Conversely, TJX shares fell 4 percent on Wednesday and continued declining Thursday, pushing the stock within 5 percent of its 52-week low.
The market rewarded Ross Stores for broadening its customer base and raising its forward outlook. Total sales for the period rose 13 percent year over year to $6.3 billion, driven primarily by increased foot traffic from both new and existing shoppers. This 10 percent comparable sales gain was achieved on top of a 2 percent increase during the same quarter a year prior.
Profitability also surged at the retailer during the period. Net income climbed to $851 million from $508 million a year earlier. Earnings per share reached $2.66, easily beating the company guidance of $1.85 to $1.93, though approximately $0.60 of that beat stemmed from International Emergency Economic Powers Act tariff refunds.
Crucially for investors, management elevated its expectations for the remainder of the year. Ross now projects third-quarter comparable sales growth of 6 percent to 7 percent and fourth-quarter growth of 4 percent to 5 percent. The new third-quarter forecast matches the guidance the company originally issued for the quarter it just beat by three percentage points.
TJX Companies delivered a fundamentally solid performance that the market ultimately overlooked in favor of the accelerated trajectory seen at Ross. Revenue for the parent of TJ Maxx, Marshalls, and HomeGoods increased 5 percent year over year to $15.2 billion. Earnings per share rose 24 percent to $1.36, finishing well above the internal plans of the larger off-price retailer.
The contrasting market treatment of the two off-price giants underscores a distinct shift in investor sentiment. While TJX offers a larger and steadier business model, the equity market is currently demanding visible momentum and raised second-half plans to justify premium valuations in the discretionary retail sector.
