Aug 19, 2026 earnings call — Raised full-year profit and EPS outlook
Company raised full-year adjusted diluted EPS to $5.15 to $5.20 and increased pretax margin guidance to 12% to 12.1%.
Revenue $15.2B (est $15.2B) · EPS $1.22 (est $1.19) · Next-quarter revenue outlook $15.6B–$15.8B
Key quotes
"At Marmaxx, we believe we could have executed our store mix better. And by that, I mean, we could have been sharper having the right goods in the right stores at the right time."
"Today, we are increasing our long term store growth potential by 500 stores to a total of 7.5 thousand stores, or over 2.2 thousand more stores."
"HomeGoods delivered an outstanding 7% comp sales increase primarily driven by higher average basket and customer transactions were also up."
Analyst Q&A 10
Marmaxx sales trend and store growth
Q (Matthew Boss): Analyst asked how Marmaxx same-store sales progressed in Q2 and about the strong August start; also asked about new store performance and raising store targets.
A: Management said sales strengthened in May and stayed consistent in June and July. They see improvement at Marmaxx in August and expect more improvement by Q4. They raised Marmaxx store target by 300 and HomeGoods by 200 and see ability to grow faster.
"And we have been seeing for, you know, for a bit of time that we had some opportunity in Marmaxx and HomeGoods to continue to grow our store base." — John Klinger
What caused Marmaxx problem and timing to recover
Q (Lorraine Hutchinson): Analyst asked what went wrong at Marmaxx, what fixes were taken, and when comps will return to a normal 2%–3% cadence.
A: Management said the shortfall was self-inflicted execution and wrong merchandise mix in specific areas. They involved buyers, planning, merchandising and senior leaders and are already fixing the issues. They see trend improvement in August versus Q2 and expect recovery by Q4.
"I would say we are seeing a trend improvement already in August versus in Q2." — Ernie L. Herrman (CEO)
Why transactions fell at Marmaxx
Q (Paul Lejuez): Analyst asked if June and July comps were positive and whether the small decline in transactions was due to traffic, conversion, or pricing.
A: Management confirmed May, June and July comps were all positive. They said the transaction decline was not conversion or pricing; it was missing items in the mix so customers in-store sometimes could not buy the items they would have picked up.
"The, decline in transactions from what we can see, had nothing to do with conversion." — Ernie L. Herrman (CEO)
Why buying missed and fixes being made
Q (Brooke Roach): Analyst asked why buyers missed the customer pulse at Marmaxx and what buying and allocation changes are being made before the holiday season.
A: Management said they cannot give category specifics for competitive reasons, but they have added systematic planning changes to monitor and prevent repeats. They involved all levels from buyers to senior executives and institutionalized fixes to help planning support buyers going forward.
"We put some basically systematic processes in place. Some of it in really is involved from the planning side, ironically, which is supposed to help the buyers." — Ernie L. Herrman (CEO)
HomeGoods comp, categories, and margin drivers
Q (Alex Straton): Analyst asked whether HomeGoods' strong comp came from traffic or ticket, which categories drove it, whether it is sustainable, and what's behind the margin expansion.
A: Management said HomeGoods has driven steady traffic by combining impulse treasure-hunt items with day-in/day-out consumable staples, and stores are easy to shop. They see continued opportunity and cited merchandise margin improvement partly from lower tariff costs plus positive operations and top-line growth.
"They, have been succeeding more, really over the last number of years at creating a level of excitement and impulse treasure hunt shopping across anything from, you know, domestic categories, which are really second to none in value." — Ernie L. Herrman (CEO)
Back-half gross margin drivers
Q (Michael Binetti): Analyst asked what changed in the second-half gross margin plan versus the first half and whether there are new positives to consider.
A: Management said the main drivers are higher fuel and freight rates in the back half, first-half merchandise margin favorability and tariff timing differences. They said the overall guidance is consistent with prior guidance and there are puts and takes but no new shifts called out.
"So, Michael, if I if I am comparing the first half to the second half, you know, the biggest piece is gonna be the fuel and the fuel the freight rates that we are seeing." — John Klinger
Long-term store target: Sierra, HomeSense, Europe
Q (Jay Sole): Analyst asked how Sierra, HomeSense and Europe fit the 7.5k long-term store target and whether new countries are being considered.
A: Management said they always look at new countries and have had success in new markets like Spain and Mexico; they are looking for more opportunities. They said Sierra and HomeSense grow faster than the company average and add disproportionately to growth, and they are constantly evaluating international markets.
"Sierra is, you know, disproportionate that adds disproportionately into the growth, right? it is a higher growth rate Yes. Than the 4% by far." — Ernie L. Herrman (CEO)
Which Marmaxx categories missed and HomeGoods categories
Q (Marni Shapiro): Analyst asked whether the missing Marmaxx items were fashion or impulse, how beauty and other non-apparel categories did, and whether HomeGoods consumables remain strong.
A: Management said they cannot identify the specific Marmaxx categories for competitive reasons and that it was a mix of issues across categories; Marmaxx also had many performing categories so the net comp was a modest miss. For HomeGoods, they said performance is strong across consumables and higher-ticket decorative categories driven by unique product and execution.
"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 1 and not a -3 is we had a lot of categories that were performing well." — Ernie L. Herrman (CEO)
Freight outlook and weather planning for Q4
Q (Ike Boruchow): Analyst asked if freight expectations for the back half changed since three months ago and whether Super El Niño weather is changing how they plan product for Q4.
A: Management said freight expectations are in line with prior expectations; first-quarter freight hedges benefited the early period and back half was expected to be less favorable. On weather, they said their model and staged warehouses let them maneuver and reallocate inventory regionally to handle unusual weather better than typical brick-and-mortar retailers.
"I mean, it is in line with what we were expecting." — John Klinger
Ticket/AUR runway and marketing activity
Q (Aneesha Sherman): Analyst asked if there is more runway for ticket and AUR growth and whether marketing approach or budget is changing meaningfully this year.
A: Management said AUR and ticket have increased but they expect moderation in the near term and that ticket changes are often driven bottom-up by category and vendor opportunities. On marketing they said they plan consistently but will add dollars when they have a strong year; they reported 1.1 billion paid video views in the first half across major platforms and high completion rates.
"In the first half of the year, we had 1.1 billion paid video views across Facebook, Instagram, TikTok, Pinterest, YouTube." — Ernie L. Herrman (CEO)