Ross +10% Comp vs TJX +4%: Why Only One Off-Price Stock Rallied

For markets, the off-price earnings pair is a case study in guidance psychology and growth premium. Ross's 10% comp and 6%–7% Q3 guide validated a traffic-led growth story, while TJX's beat and raised full-year outlook could not overcome a 2%–3% Q3 comp plan that fell short of buy-side expectations. The one-day divergence—ROST up more than 4%, TJX down 4%—shows the market pricing forward momentum more than trailing results.

The most consequential development in off-price retail's fiscal second-quarter earnings season is the market's divergent treatment of Ross Stores and TJX Companies despite reporting the same 13-week period one day apart. Ross Stores reported comparable sales growth of 10%, total sales up 13% to $6.3 billion, EPS of $2.66, and third-quarter comp guidance of 6% to 7%. TJX Companies, parent of TJ Maxx, Marshalls and HomeGoods, reported 4% comp growth—above its own plan—beat on sales, margin and earnings, raised its full-year outlook, and guided third-quarter comps to 2% to 3%. Yet one stock rose and the other fell: Ross shares jumped more than 4% on Friday while TJX fell 4% on its report day and remained within roughly 5% of its 52-week low.

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Ross Stores reported comparable sales growth of 10%, total sales up 13% to $6.3 billion, EPS of $2.66, and third-quarter comp guidance of 6% to 7%.

The market's reaction is not a contradiction; it is a statement about the quality and direction of each business. Ross's 10% comp gain is the more impressive because it was driven primarily by customer traffic—more people in stores rather than simply larger baskets. Management said growth came from both new customers and higher engagement from existing ones, and it was stacked on top of just a 2% comparable sales gain in the year-ago quarter. That makes the growth look broad and potentially durable. The company also earned $2.66 per share, which included $0.60 in tariff refunds; even after backing out that one-time item, Ross beat its own guidance. This suggests the underlying operating business performed better than the headline number alone would indicate. The Q3 guide of 6% to 7% comp growth implies management expects the traffic-led momentum to continue.

TJX's 4% comp was by no means weak, and it came in above the company's own plan. The company also beat on sales, margin and earnings and raised its full-year outlook. But the market focused on the second-half setup. TJX is planning for 2% to 3% comparable sales growth in the third quarter—roughly half the Q2 pace and far below Ross's guide. Investors often treat guidance as the bridge between reported results and future expectations. A beat that is accompanied by a lower forward comp plan can read as a sign that the Q2 strength may not be sustainable, particularly when a direct competitor is simultaneously signaling acceleration. TJX's stock decline, leaving it near its 52-week low, shows that investors were already positioned for more and did not hear enough to reward the beat.