TJX Stock Is the Top Performer in the S&P 500. Earnings Breezed Past Expectations.

The retailer posted better-than-expected quarterly earnings and lifted its full-year outlook. (Photograph by Joe Raedle/Getty Images)

TJX Cos. was the top stock in the S&P 500 Wednesday after the retailer posted better-than-expected quarterly earnings and lifted its outlook for the rest of the year.

The company, which operates stores like T.J. Maxx and HomeGoods, reported adjusted earnings of $1.10 for the second quarter, surpassing analysts’ consensus estimate of $1.01, per FactSet. Consolidated same-store sales increased 4% from the prior year, above the company’s guidance.

TJX stock was rising 5% in morning trading. The company was a Barron’s stock pick earlier this year.

“I am extremely pleased with our second quarter performance,” said CEO Ernie Herrman in a statement. “We are convinced that we have a long runway ahead to capture additional market share and continue our successful growth around the world.”

Tariff costs were lower than expected in the second quarter, though still higher than last year. The company’s profit margin held up, however, with merchandise margin holding steady from the year before.

TJX lifted its full-year guidance, working under the assumption it can offset expected tariff pressures through the end of the fiscal year. Full-year earnings are expected to be between $4.52 and $4.57 a share, up from a previous range of $4.34 to $4.43.

The company also issued guidance for its fiscal third quarter. It expects same-store sales to be up between 2% to 3%, with earnings per share ranging from $1.17 to $1.19. The midpoint of the earnings range—$1.18—is a hair below the $1.22 forecast by analysts, but investors seemed willing to brush off the perceived weakness.

“Management indicated in the press release that 3Q was off to a ‘strong’ start, and 3Q EPS guidance (although slightly below consensus) will probably be viewed as conservative given recent beats,” wrote Paul Lejuez, an analyst at Citi.

TJX and other off-price retailers have emerged as indisputable winners of the postpandemic retail landscape. Their treasure-hunt model has appealed to inflation-weary shoppers across the income spectrum, helping companies like TJX nab market share. This quarter’s results and guidance lift suggests TJX’s gains continue.

“The company’s repeated earnings beats highlight the strength of its value-focused proposition, which continues to resonate with consumers amid an increasingly price-sensitive environment,” wrote Dana Telsey, CEO of Telsey Advisory Group, in a note Wednesday. “In addition, a favorable off-price buying landscape continues to enable TJX to effectively meet traffic and demand. Looking ahead, we expect TJX to continue gaining profitable market share.”

Write to Nate Wolf at nate.wolf@barrons.com and Sabrina Escobar at sabrina.escobar@barrons.com