TJX Companies beat Wall Street's earnings estimates this week, but investors punished the stock anyway, sending shares of the T.J. Maxx and Marshalls parent down more than 7% over the week — its worst weekly showing since 2021.

On paper, the numbers looked strong: GAAP earnings jumped 24% to $1.36 per share. But a closer look showed a big chunk of that beat came from a one-time windfall rather than the business itself. TJX received $331 million in IEEPA tariff refunds from the Trump administration, against which it recorded $112 million in related compensation accruals, according to TradingKey's earnings breakdown. Strip that one-off gain away, and analysts said the underlying operating trends looked far less impressive.

Guidance spooked the Street more than the quarter did

The bigger trigger for the sell-off was management's forecast for the current quarter. The Motley Fool reported that TJX's third-quarter adjusted earnings guidance came in below what analysts had modeled, a signal that management sees softer conditions ahead even as the company raised its full-year store count target. According to an Investing.com transcript of the earnings call, executives leaned into an aggressive brick-and-mortar expansion plan, lifting TJX's long-term global store target toward 7,500 locations, even as the near-term profit outlook drew skepticism.

A NON-TRIVIAL SHARE OF THE BEAT CAME FROM A TARIFF REFUND, NOT THE BUSINESS

The stock's slide compounds a rough stretch for off-price retail this earnings season more broadly, with several chains posting solid headline numbers only to see shares fall on guidance concerns. TJX shares opened down more than 5% the day after the report and continued sliding into the end of the week, closing out TJX's steepest five-day drop since 2021 even though the company's underlying sales and traffic trends remained positive. The company's next quarterly update is expected in November.