Despite TJ Maxx parent's statement that holiday shopping is off to a "strong start," its guidance suggests a different story.

• TJX Companies beat Wall Street's estimates and raised its full-year profitability guidance.
• TJ Maxx, Marshall's and Home Goods owner, reported a "strong start" to the holiday shopping season.
• Despite facing more challenging comparisons from the previous year, TJX continues to increase its sales.

On Wednesday, TJX Companies reported a "strong start" to the holiday shopping season, but its shares dropped after the retailer provided guidance that seemed to disappoint Wall Street.

Despite comfortably beating Wall Street's expectations during its fiscal third quarter, TJX expects its earnings per share for the holiday quarter to be between $1.12 and $1.14, which is below the expected $1.18, according to LSEG.

Based on a survey of analysts by LSEG, how did TJX perform compared to Wall Street's expectations?

• Earnings per share: $1.14 vs. $1.09 expected
• Revenue: $14.06 billion vs. $13.95 billion expected

In the three-month period ending November 2, the company's reported net income was $1.30 billion, or $1.14 per share, compared to $1.19 billion, or $1.03 per share, in the same period a year ago.

The increase in sales was approximately 6%, from $13.27 billion to $14.06 billion.

Our CEO, Ernie Herrman, stated in a news release that our customer transactions drove our comp sales increases, indicating that our values and treasure hunt shopping experience are appealing to a wide range of customers.

"We are thrilled to report that the fourth quarter has begun on a promising note, and we are eager to capitalize on our prospects for the upcoming holiday shopping season. Our stores and online platform are providing customers with a constantly evolving and captivating shopping experience, featuring exceptional deals on a wide range of gifts. We are confident that our offerings will cater to everyone's needs and preferences."

TJX expects comparable sales to grow between 2% and 3% in its holiday quarter, which is in line with the 3% increase predicted by StreetAccount analysts. The company stated in a news release that changes to its pretax profit margin and earnings guidance for the holiday quarter are due to the expected reversal of the third quarter benefit from the timing of certain expenses.

TJX is sticking to its forecast of 3% growth for the year, slightly below the 3.2% growth predicted by StreetAccount analysts. It has raised its pretax profit margin outlook from 11.2% to 11.3%, matching StreetAccount's expectations, and has also increased its earnings per share guidance. TJX now expects full-year earnings to be between $4.15 and $4.17, up from a previous range of $4.09 to $4.13. At the high end of its guidance, it is in line with the $4.17 that LSEG had predicted.

Despite a year of rapid expansion, the retailer behind Marshalls, HomeGoods, and T.J. Maxx continues to experience growth. This discounter is attracting price-conscious consumers who are shifting away from high-end department stores like Macy's and Neiman Marcus. Additionally, the retailer is gaining traction with younger shoppers who view off-price shopping as a trendy and socially acceptable option.

Despite its growth slowing, TJX is expanding overseas to increase sales. In the quarter, Marmaxx's comparable sales, which include TJ Maxx, Marshall's, and Sierra stores, rose by 2%, compared to 7% in the previous year. HomeGoods' comparable sales increased by 3%, compared to 9% in the year-ago period, while TJX Canada grew by 2%, compared to 3% last year.

TJX International, which encompasses Europe and Australia, was the only division that surpassed last year's results. Despite facing challenges with execution in its European business earlier this year, TJX's European division achieved comparable sales growth of 7% during the quarter, compared to 1% in the previous year.

In the last quarter, it was revealed that the company had acquired a 35% stake in the Dubai-based retailer Brands for Less for $360 million. This privately held brand is the largest off-price player in the region and operates over 100 stores and an e-commerce business primarily in the United Arab Emirates and Saudi Arabia.

TK Maxx is set to debut in Spain as part of TJX's expansion plans, with an early 2026 launch.

Some analysts were concerned that TJX and other off-price retailers like and could be disproportionately impacted by the unseasonably warm weather in October. Off-price retailers tend to be affected by unfavorable weather patterns more than traditional retailers because lower-income shoppers typically buy things when they need them -- not ahead of time, Bank of America analysts wrote in a research note.

In the fall months, retailers like TJX, which have a significant exposure to apparel, anticipate an increase in sales from shoppers looking to purchase new coats and other items for the cooler weather. However, if TJX's lower income consumer customers delayed their purchases due to the warm weather, it could have negatively impacted the company's sales.

Despite the warmer weather, TJX's sales remained unchanged.