Why Putting $7,000 in These Dividend Stocks Makes Sense for Your TFSA
Canadian retirees are searching for good TSX dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolios focused on generating reliable and growing passive income.
Enbridge (TSX:ENB) raised its dividend in each of the past 30 years. The energy infrastructure firm currently boasts a market capitalization near $139 billion and possesses a solid balance sheet. This gives Enbridge the financial clout to make large acquisitions while also pursuing organic growth projects.
Enbridge spent US$14 billion in 2024 to buy three natural gas utilities in the United States. The deals further diversified Enbridge's asset portfolio, adding businesses that generate steady rate-regulated cash flow. Enbridge is now the largest natural gas utility operator in North America. These assets complement the existing natural gas transmission and storage infrastructure in Canada and the United States at a time when natural gas demand is expected to rise. New gas-fired power generation facilities are being built to provide electricity for AI data centres.
Enbridge's oil pipeline operations remain strategically important for the Canadian and American economies. The company moves about 30% of the oil produced in the two countries. Canada is now looking at the possibility of building new energy pipelines to enable producers to access more global customers. Enbridge could potentially be a player in that process.
The company is currently working on a $28 billon capital program that will boost earnings in the next few years. This should support ongoing dividend increases. Investors who buy ENB stock at the current price can get a dividend yield of 5.9%.
Canadian Natural Resources (TSX:CNQ) is up about $10 per share in the past two months, but still only trades near $45.50 at the time of writing compared to a high of $52 last fall. Investors can take advantage of the dips to add the stock as a solid income pick.
CNRL is a major oil and natural gas producer with a diversified asset portfolio that includes oil sands, conventional heavy oil, conventional light oil, offshore oil, and natural gas production. The company has a long track record of making strategic acquisitions to boost production and reserves, as it did late in 2024 with its US$6.5 billion purchase of Chevron's Canadian assets.
CNRL is the full owner or majority owner on most of its operations. This gives management the flexibility to quickly shift capital around the asset portfolio to take advantage of the best opportunities in the market as commodity prices change.
The company reported record oil and natural gas production in Q1 2025. CNRL raised the dividend by 4% in March, following two increases in 2024. The latest hike marks the 25th consecutive year CNRL has increased the distribution. That's a great track record for a business that relies on commodity prices to determine its profits.
Investors who buy CNQ stock at the current level can get a dividend yield of 5.1%
Enbridge and CNRL pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA focused on passive income these stocks deserve to be on your radar.
The post Why Putting $7,000 in These Dividend Stocks Makes Sense for Your TFSA appeared first on The Motley Fool Canada.
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Fool contributor Andrew Walker has no position in any stock mentioned. The Motley Fool recommends Canadian Natural Resources and Enbridge. The Motley Fool has a disclosure policy.
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TJX (TJX) Q2 2026 Earnings Call Transcript
Image source: The Motley Fool. DATE Wednesday, August 20, 2025 at 9:30 a.m. ET CALL PARTICIPANTS Chief Executive Officer and President — Ernie Herrman Chief Financial Officer — John Klinger Director of Investor Relations — Deb (full last name not provided in transcript) Need a quote from a Motley Fool analyst? Email pr@ Full Conference Call Transcript Ernie Herrman: Good morning. Joining me and Deb on the call is John Klinger. I'll start today with our second quarter results. I am extremely pleased with our outstanding second quarter performance and our above-plan sales, profit margin, and earnings per share results. Overall, comp sales for the second quarter exceeded our expectations, increasing 4% and were strong across all of our divisions. Customer transactions were up at every division and drove our overall comp sales increase. As we have seen through so many retail and economic environments, consumers were drawn to our excellent values in brands. And going forward, we continue to see market share opportunities across each of our U.S. and international divisions. With our profit results in the second quarter also well exceeding our plan, we are raising our full-year guidance for both pre-tax profit margin and earnings per share. John will talk about our results and guidance in more detail in a few minutes. I want to thank our global associates who drove these excellent results. Our teams across the company successfully executed our off-price business fundamentals to deliver an exciting assortment of merchandise at great value to our customers every day. This is a testament to the talent of our teams and the depth of their off-price expertise. Across our company, we saw our associates working together as one TJX to deliver on our value mission for consumers. As we look to the second half of the year, I am very confident in our position of strength in retail. Our teams are energized by the opportunities we see to keep attracting shoppers to our retail brands and to build upon our success of prior years in being a gifting destination for consumers. We see outstanding buying opportunities in the marketplace for quality branded merchandise, which also gives me great confidence in our plans for the fall and holiday selling seasons. The third quarter is off to a strong start. We are confident in our full-year sales and profitability plans. And as always, we will strive to beat them. Longer term, we believe the strength and resiliency of our flexible off-price business model will continue to be a tremendous advantage. We feel great about our core businesses and the opportunities we see for growth with our newer vehicles. We are convinced we have a long runway ahead to capture additional market share worldwide and continue our successful global growth. I'll talk more about our second half opportunities and key strengths in a moment. But first, I'll turn the call over to John to cover our second quarter results in more detail. John Klinger: Thanks, Ernie. I also want to add my gratitude to all of our global associates for their continued hard work and commitment to delivering our customers great value every day. Now I'll share some additional details on the second quarter. As Ernie mentioned, our consolidated comp sales growth of 4% came in above our plan. Further, we saw comp increases in both our apparel and home categories, with home outperforming apparel. Second quarter pre-tax profit margin of 11.4% was up 50 basis points versus last year and well above our plan. Gross margin increased 30 basis points versus last year, primarily due to favorable hedges. Merchandise margin was flat despite higher tariff costs versus last year. Importantly, we are very pleased with our mitigation strategies, which allowed us to offset the tariff pressure we saw in the second quarter. SG&A decreased 30 basis points versus last year. This was primarily due to operational efficiencies as well as a benefit from the timing of certain expenses, some of which we expect to reverse out in the third quarter. Net interest income negatively impacted pre-tax profit margin by 10 basis points versus last year. Second quarter diluted earnings per share of $1.10 increased 15% versus last year and was also well above our expectations. Lastly, we were extremely pleased that our second quarter pre-tax profit margin came in 90 basis points above the high end of our plan. This was due to a combination of items, including lower than expected tariff costs, expense leverage on above-plan sales, and the timing of certain expenses. This was also partially offset by higher incentive compensation accruals and contribution to TJX's charitable foundations. Now to our second quarter divisional performance. Again, this quarter, customer transactions increased at every division. We see this as an excellent indicator of the strength of our value proposition across our retail banners. At Marmaxx, comp sales grew a strong 3%. A combination of a higher average basket and an increase in customer transactions drove the comp increase. It was great to see strength in our store performance across all income demographics, which speaks to our broad-based appeal of our values. Marmaxx's segment profit margin was 14.2%, up 10 basis points versus last year. Our Sierra stores and U.S. e-commerce sites, which we report as part of this division, also saw strong sales results. We feel great about Marmaxx's performance, the initiatives underway for the second half of the year, and our long-term opportunities that we believe will allow us to drive sales and capture additional market share. At HomeGoods, comp sales grew a very strong 5% with strength at both our HomeGoods and HomeSense banners. Segment profit margin grew 10%, up 90 basis points versus last year. Our eclectic assortment of home fashions that we source from around the world are clearly resonating with customers. We are excited about what's in store for the back half of the year, and we're confident our customers will be too. We remain confident that we can continue to capture additional share in the U.S. home market. TJX Canada's comp sales increased an outstanding 9%. Segment profit margin on a constant currency basis grew to a very strong 16%, up 100 basis points versus last year. Our retail banners in Canada, which consist of Winners, Marshalls, and HomeSense, have extremely high brand awareness and customer loyalty. We see great potential for our Canadian banners for the rest of 2025 and long term, and for their continued successful growth across the country. At TJX International, comp sales increased a very strong 5%. Once again, we're very pleased to see sales strength in Europe and outstanding sales in Australia. Segment profit margin on a constant currency basis grew to 5.2%, up 80 basis points versus last year. With our leadership position and decades of international operating experience, we are confident we can continue to be an attractive shopping destination for value-seeking customers across Europe and Australia. Moving to inventory. Balance sheet inventory was up 14%, and inventory on a per-store basis was up 10% versus last year, as we've been buying into the excellent opportunities for quality, branded merchandise we've been seeing in the marketplace. We are confident that availability of merchandise will continue to be outstanding and that we are well-positioned to flow fresh assortments to our stores and online this fall and holiday season. As to capital allocation, we continue to reinvest in the growth of our business while returning $1 billion in the second quarter to shareholders through our buyback and dividend programs. Now I'll turn it back to Ernie. Ernie Herrman: Thank you, John. Now I'd like to take a moment and highlight the opportunities we see to keep driving sales and traffic in the second half of the year. First, I am convinced that consumers will continue to seek out value and that we will remain a very attractive option for consumers seeking great brands, fashions, and quality merchandise at compelling prices. Our customer surveys tell us that our value perception remains strong, and we are laser-focused on keeping it that way. Again, product availability has been outstanding. Our global world-class buying organization of over 1,300 buyers sourced from an ever-changing universe of over 21,000 vendors across more than 100 countries. I'm extremely confident that our buyers will bring consumers the right assortment at the right values throughout the fall and holiday season. Next, we feel great about the product category initiatives underway for the back-to-school and holiday shopping season. Further, we have made our stores a year-round shopping destination for gifts and believe we are becoming more top of mind with shoppers with our consumable offerings. We believe that shoppers will be inspired to visit us frequently to see what's new. Lastly, we are planning exciting marketing campaigns that will continue to reinforce our value leadership. We plan to continue to represent a broad range of shoppers in our advertising and leverage a wide variety of media channels to target a wide customer base. We believe these campaigns will help us continue to attract new shoppers, stay top of mind with our existing customers, and encourage cross-shopping of our retail banners. Beyond this year, we have great confidence in our key success factors that have served us so well through our nearly fifty-year history. We are convinced that these key characteristics of our business set us up extremely well for continued growth around the world over the long term. First, we are convinced that our position as a trusted value leader in the U.S., Canada, Europe, and Australia will continue to be a tremendous advantage. We believe our value proposition of brand, fashion, price, and quality will continue to resonate with consumers. Our commitment to offer great value on every item every day to every customer will always be a top priority. Second, we aim to attract shoppers across a very wide customer demographic with our treasure hunt shopping experience. Our extensive assortments of good, better, and best brands allow us to offer merchandise to a broad range of income and age groups. We believe our strategy of trading across a wide customer demographic differentiates us from many other retailers and is a tremendous advantage. Further, we continue to attract younger customers to our stores, which we believe bodes well for the future. John Klinger: Third, we believe the flexibility of our business will continue to be a significant benefit as we operate through the ever-changing macro and retail environments. The flexibility of our buying, store formats, systems, and supply chain allow us to merchandise stores individually with a rapidly changing curated mix of goods with a wide range of price points. Next, we see the long-term potential to open an additional 1,800 plus stores in just our current countries and Spain. We also see great growth potential with our joint venture in and investment in The Middle East. Importantly, I am extremely confident that there will be plenty of quality merchandise available to support our store growth plans. We believe we can keep delivering the best merchandise values and shopping experience to our customers around the world. Lastly and most importantly is the longevity and knowledge of our talent, which I believe is unmatched. Throughout TJX, our management teams have deep decades-long off-price experience in the U.S. and internationally. We take great pride in our TJX University and other teaching and training programs and are laser-focused on succession planning to ensure we develop the next generation of leaders for our company. Additionally, our deep bench gives us great flexibility to rotate talent throughout the company to further develop our future leaders. I am also very proud of our culture, which I believe is a major differentiator and will continue to be another key component of our success. Ernie Herrman: Summing up, we are extremely pleased to deliver another quarter of strong sales and profitability. We believe our performance and momentum in the first half of the year puts us in an excellent position for continued success for the remainder of the year. We feel great about our value positioning in the current environment and are confident that we will have an appealing assortment of merchandise in our stores and online throughout the fall and winter seasons. We have a strategic vision for long-term success, and I am convinced that we are set up well to capitalize on the opportunities we see to grow our company and capture market share around the world for many years to come. Now I'll turn the call back to John to cover our full-year and third-quarter guidance, and then we'll open it up for questions. John Klinger: Thanks again, Ernie. I'll start with our full-year fiscal 2026 guidance. We now expect overall comp sales to increase by 3%. We are increasing our full-year consolidated sales guidance to a range of $59.3 billion to $59.6 billion. This increase now reflects a significant benefit from favorable foreign exchange rates on the translation of our foreign sales to U.S. dollars, as well as the flow-through of our above-plan sales in the second quarter. We're increasing our full-year profitability guidance to be in the range of 11.4% to 11.5%. This would be flat to down 10 basis points versus last year's 11.5%. Moving to gross margin, we now expect it to be in the range of 30.5% to 30.6%, flat to down 10 basis points versus last year's 30.6%. We now expect full-year SG&A to be 19.4%, flat versus last year. We're now assuming net interest income of about $108 million, which we expect to deleverage fiscal 2026 pre-tax profit margin by 10 basis points. Our full-year guidance assumes a tax rate of 24.5% and a weighted average share count of approximately 1.13 billion shares. As a result of these assumptions, we're increasing our full-year diluted earnings per share to be in the range of $4.52 to $4.57, up 6% to 7% versus last year's diluted earnings per share of $4.26. This EPS guidance now includes our second quarter above-planned sales and a negative 1% impact to EPS growth due to unfavorable foreign exchange, versus a negative 3% impact on our previous guidance. Moving to the third quarter, we expect overall comp sales to increase 2% to 3%, consolidated sales to be in the range of $14.7 billion to $14.8 billion, pre-tax profit to be in the range of 12% to 12.1%, down 20 to 30 basis points versus last year's 12.3%. Gross margin to be in the range of 31.6% to 31.7%, this would be flat to up 10 basis points versus last year. SG&A to be 19.8%, 30 basis points unfavorable to last year. We're also assuming net interest income of about $25 million, which we expect to deleverage third-quarter pre-tax profit margin by 10 basis points. Our third-quarter guidance also assumes a tax rate of 24.7% and a weighted average share count of approximately 1.13 billion shares. Based on these assumptions, we expect third-quarter diluted earnings per share to be in the range of $1.17 to $1.19, up 3% to 4% versus last year's $1.14. Lastly, our implied guidance for the fourth quarter assumes that overall comp sales would be up 2% to 3%, pre-tax profit margin will be in the range of 11.7% to 11.8%, up 10 to 20 basis points versus last year, and diluted earnings per share would be in the range of $1.33 to $1.36, up 8% to 11% versus last year. As for tariffs, our third quarter, fourth quarter, and full-year guidance assumes that we'll be able to offset the incremental tariff pressure on our business this year. We're making an assumption that the current level of tariffs on imports into the U.S. will stay in place for the remainder of the year. In closing, I want to reiterate Ernie's confidence in our plans for the second half of the year and our long-term opportunities. I also want to emphasize that we remain in an excellent position to continue to invest in the growth of the company while simultaneously returning significant cash to our shareholders. Now we're happy to take your questions. As a reminder, please limit your questions to one per person so we can answer as many questions as we can. Thanks. And now we'll open it up for questions. Operator: Thank you. Our first question comes from Matthew Boss. Matthew Boss: Thanks and congrats on another nice quarter. Ernie Herrman: Thank you. Matthew Boss: Ernie, could you speak to the consistency of your comps despite the volatile macro backdrop and elaborate on the strength that you've seen to start the third quarter and excitement around product availability? And then for John, just maybe puts and takes on merchandise margins in the back half of the year relative to flat performance in the second quarter despite the impact of tariffs that you saw? Ernie Herrman: Okay. Sounds good, Matt. Yeah. Consistency, you know, where I give the teams a lot of credit, and, again, we've talked about the broad range of the customer base that we go after. But what I really like to highlight, we mentioned it a little bit in the script, but our categories of business were healthy across all areas, meaning home, apparel, accessories, all of that was good. That, combined with our flexible business model, I think, allows us to execute in a more consistent fashion our comp sales. Because we're able to flex regardless of the and you mentioned availability. Yes. Availability has continued to be fantastic out there. But, again, in terms of demand by family of business, whether you're dealing with, you know, ladies or men's apparel or kids' apparel or our accessories divisions, of which there are multiple families of business in there, our home business, because we're so flexible in the way we buy hand to mouth, we are able to go after the opportunities across all the different families of business, which then results in, I think, a more consistent comp sales performance. So I believe we're sometimes able to escape, Matt, which I think is what you're getting at, is the volatility of, you know, having a quarter where all of a sudden your comps are, you know, four points off the prior quarter or whatever, which is not uncommon in retail. For us, it's less common. As you can see by the way, Marmaxx, you know, got a point better than Q1. As did, you know, a lot of our international division. So I think the flexibility of the business model and at the same time, we're taking advantage, I think, of a marketplace out there where you've had store closures and perhaps less exciting execution across the board in retail brick and mortar specifically. And I think that helps us to bob and weave and take advantage of consistently keeping driving. To keep driving consistency in our sales. By the way, your point B of your first question when you mentioned availability, that is and I did mention that back as you know, a few months ago. It continues to be super strong availability as we go into Q3. Guess I'll hand it over to John then. John Klinger: Yeah. So, Matt, on the merchandise margin, not a tremendous amount to add to what our prepared remarks said. I mean, we still have foreign exchange that is negatively impacting us in the third quarter. And we do feel confident that we can continue to offset the tariff pressures, again, like we said, in the third quarter, fourth quarter, and back half of the year. Matthew Boss: Great color. Best of luck. Ernie Herrman: Thank you. Operator: Our next question comes from Brooke Roach. Brooke Roach: Good morning, and thank you for taking our question. Ernie, as pricing in the industry has begun to increase, are you seeing an acceleration of market share gains as consumers look for value at TJX? What are your latest thoughts on pricing as you move into fall and holiday? Are you looking to maintain the percent gaps? Will you selectively raise prices in this inflationary environment? Thank you. Ernie Herrman: Great questions, Brooke. And obviously, time is quite appropriate based on what's going on in the world around us. We have, you know, again, this is one of those funky situations where we don't top-down dictate prices. So we don't go in with the strategy that we're going to raise price per se. And in fact, and I think I've gone through this a few times, we kind of use other retailers around us to route the door pricing and our buyers work it backwards. So they look at what the out-the-door pricing is around, and then we say, yes. And by the way, this was part of your question. Are we going to our pricing percentage gap, is that going to change or not? So this is where the art form comes in and the secret sauce. We don't go by an exact percentage because sometimes on a say you have a women's top, for example, that's that we think the right phenomenal value on that is $19.99. And that top is being sold. That top's retail went up in another store, their out-the-door sale price is, you know, $35. And, oh, maybe we could go to 25. We may not go because and this is the art form. Because in our mix, we have possibly made so many other great buys with all of the availability that's out there. That we have to now that buyer says, I have to compete in my own mix now for the customer. So then that's why it's absolutely a deal by deal, SKU by SKU, brand by brand situation, I don't know if that pricing in that case, the pricing percent gap might be higher. Or if we had to go up on that retail because of weekend because the retails around us went up, and maybe the percent gap is back to the same as where it was before. So I never broad brush that we have a strategy overall on that because I know our buyers are doing deal by deal. One of the strengths of our buying teams is they are aggressively comp shopping, all of the competition, whether it's online, brick and mortar, vertical brands, department stores, specialty stores. And so, I give them a lot of credit, by the way. We've been navigating in the tariff environment by just staying simple and pure to that model. The other thing I'd point out, it's easy to forget, is that, remember, you know, ninety year give or take, you know, we're dealing the bulk vast bulk of, maybe 90% of what we buy, there's third parties. We're not the direct importer. So, that's why our buyers can really pretty much just off the retail and work it backwards because we're not we're not starting with this is what we're paying, and those goods aren't in other retailers. We have to just mark it up off of what we're paying. So does that make sense? John Klinger: And, Brooke, the other thing I would add to that is that our customer surveys continue to show that we're continuing to offer exceptional value to the customer. Yeah. Very strong percept if anything, our perception on value of our customers has improved over the last couple of years. So, I mean, you're asking are so on to the right question, though, because this is this is really, motherhood and apple pie to us. In terms of what we concentrate on. Ernie Herrman: Yeah. Yeah. Did we answer that, Brooke? Brooke Roach: Yes. Thank you so much. I'll pass it on. Ernie Herrman: Okay. Thank you. Operator: Our next question comes from Lorraine Hutchinson. Lorraine Hutchinson: I wanted to build on Brooke's pricing question. Was pricing a key factor in your tariff mitigation in 2Q in a comp? And how has the customer reacted to some of these higher price points? Ernie Herrman: Sure. Yeah. Lorraine, great also. It goes hand in hand with that. I mean, overall for TJX, transactions continue to drive the comp. For Marmaxx, it was basket and transactions. I think you're you're finding that, you know, our margins are healthy. Couple of things. One is to please don't underestimate. I wanna emphasize that tariff costs were higher, and they were a headwind for us. In Q2 and year over year. Just in the end, a little bit lower than we had expected. And so that you know, we had a bit of a bit of a savings there. We also because of this environment, I would say the retail adjustments based on what the out-the-door happened in pockets I don't think there was as much of that as there was our merchants taking advantage of the market opportunities. Which allowed us to, in many cases, buy better to help offset the tariffs that way on the on the market goods. If that makes sense, Lorraine. In other words, you know, we were getting more hit on the tariffs directly on our own direct imports, but that's a small portion of our total. So our buyers did a very good job on taking advantage of the mark, you know, in terms of market excess inventory by category back to the flexible flexibility there. We're also we manage we're able to manage our markdowns efficiently which also helps with our merchandise margin. And one team I'd like to give a lot of credit to is our planning and allocation teams. They are sometimes the unsung heroes because I'm always talking about right you know, rightfully so, having the right good. So we tend to talk I tend to talk about the buyers and the merchandise manager. Who are doing a phenomenal job in this environment. But our planning and allocation division is amazing, and that applies to every division we're in, whether it's Canada, Marmaxx, HomeGoods, Sierra, Europe, Australia, every planning and allocation division is so good at balancing our mixes by category, family of business, by literally by district, by store. And so what happens and we keep getting better and better at so what happens there, we're able to manage our drive our sales. That's back to answering the consistency question that I think Matt had asked. And at the same time, help our merchandise margin by saving on markdowns by flowing the right amount of goods to the right stores. So I think that's been a key component also, but taking advantage of market opportunities, I think, has allowed us to do the bulk of our dealing with the tariffs. Which are still a headwind no matter what. You know? They're still there. Lorraine Hutchinson: Thank you. Operator: Our next question comes from John Kernan. John Kernan: Hey, good morning. Congrats on a great quarter. Ernie Herrman: Thank you. Thanks. John Kernan: So Ernie, some of the data we look at and other folks look at showed a nice acceleration in traffic. You know, it's back to school picked up in mid to late July and then through August. How would you characterize the comp progression throughout the quarter? I got a quick follow-up. Thank you. Ernie Herrman: Yes. Mean, can take through that. We started the quarter strong, as we said in our opening remarks last quarter. June, there was a little bit of weather that negatively impacted us, but we came throughout of June even stronger in July. And, like we said, and they remarks today, we entered this quarter with strong sales. Yeah. So, John, to your question, we had a little bit of, I guess, call a little bit of a lull in the middle of the quarter. But other than that Oh, that's remarkable strong. Yeah. If I if I leave everyone with nothing else after this call, it's our balance and consistency, seems to be the hallmark of this quarter. And, again, the way we try to manage the business, is we try to avoid any major ups and downs, and, unfortunately, this quarter represented that. John Klinger: Yeah. And then John, just a quick follow-up. Obviously, nice upside to the pretax margin this quarter on a four comp. Is there any change to the rule of every 100 basis points upside of same store sales can give you ten or so basis points through to the bottom line. It seems like you've over the last few years, you've generally outperformed that. Curious if this becomes just more important what it is. Ernie Herrman: For every point in comp, we would expect to get 10 to 20 basis points on the bottom line, and that's we feel that going forward, that's what you should model. John Kernan: Alright. Great. You. Ernie Herrman: John, I want you to know that, John Klinger says that to me all the time. So you know. John Klinger: When I ask certain similar questions, I get the same answer. So. Ernie Herrman: Yep. Good to know. Consistency. John Klinger: Yep. Ernie Herrman: Yeah. Because yes. There you go. Operator: Our next question comes from Paul Lejuez. Paul Lejuez: Ernie, I think you mentioned consistency a couple of times, I think, related to your income demographic performance. Anything else that you can give, any more detail you could share, higher income, demos versus or lower income maybe just to build on that also, just regional differences, There's also a lot of question marks around the board stores. Any comments you can make about how those stores are performing? Ernie Herrman: Yeah. Yeah. Sure. John and I both talked to us, but Paul, I mean, great question. I'll start off with talking about we're very we look at this all of the time consistently because of, a, yes, consistency and balance. Really, here, word is balance across all the different age groups and, income demographic groups. So our marketing team, another team that has really equipped us, I think, to take a strategic approach. Even our creative, by the way, on the marketing campaigns we have going right now is aimed at a wide age and income demographic group, which not all marketing is does for the different retailers. So we have and as also, remember, we do always talk about in our merchandise mix going after good, better, best. Our marketing, we are very good at being balanced across the different age and income groups relative to we won't give you the exact numbers, but relative to The U.S. General population, we are very balanced in that respect. And if anything, our focus has been, and you've heard this before from us, we have had a focus. I think this is one of your questions. On, acquiring the younger age group as we go forward here. And we have been doing that for the last number of years. And even if I look at across our divisions, in the new customer base, which, again, is tends to be a smaller number, but our new customer base skews younger than the current customer base, which is good. And our current customer base also skews a little bit younger than the general population. So, this has been Yeah. John Klinger: I mean, it's it's the other thing is, I mean, we're giving the more reasons to come into our stores. The consumables that we offer that give a customer a reason to come in and you know, likely find something else in the store that they like. And as Arne talks about all the time, is the good, better, best mix. And appealing, really, the reason why we appeal to such a broad customer demographic. As far as, the border stores, so we look at our Canadian border. The nice thing is we've got stores on both sides. We have seen and, not talking about a lot of stores that we have on our borders. So it's it's really hardly any impact, to the total. But we did see a little less cross border shopping So more of the Canadians were staying home and shopping winters versus coming over and shopping TJ Maxx. But again, very, very small impact. Ernie Herrman: We do I'll also see a little lift on the same side of our Canada stores as you can right? Yeah. Those sales just, you know, they just transferred. They transfer over. Paul Lejuez: Got it. And then on the southern border? John Klinger: Again, we're not seeing a large impact. You look at our sales across the different geographies, it was pretty consistent across all the geographies in the country. So again, we're not seeing a large impact. Ernie Herrman: You know, we see an impact when, if there's some natural disasters, for example, will and even in the news media gets more viewership, in a region, And so, for example, in California, we'd see a little dip on that you know, when that was going on, and that's what John and I typically are seeing. We're not seeing anything really radical along the Mexico border at all. And yeah. And, usually, the weather, like we saw in. John Klinger: In June, I mean, it when the weather subsides, we see things bounce back. Bounce back. Yeah. Paul Lejuez: Yep. John Klinger: Yep. Got it. You got it. Good luck. Ernie Herrman: Yeah. Oh, and also, Paul, to that regional I know you're kind of on the regional question. Is we back to the planning and allocate our planning and allocation division, was they're also good at this, if we end up in a district, an area of, say, a dozen stores or a region, or in a certain geography where there's something going on or it's our planning allocation with our store ops, division, they're fantastic at reacting very Our field organization if there's something on you this happens. So John and I are talking a high level but there is a lot of work that our teams in the field a planning allocation do to compensate any for any strange regional or local market Yeah. John Klinger: We turn our stores roughly once a month. Right. We do have the ability to react quickly. Ernie Herrman: Which I think goes back to the, consistent, that all of these things help our consistency. Because we're able to then take goods and say, oh, I'll ship it to these other areas that are doing better. It helps offset the area that's a little weak, but we've been very happy with the balance of healthy business across the entire country and internationally. As you can see, very pleased with, Canada and Europe. Paul Lejuez: Thank you, guys. Good luck. Ernie Herrman: Thank you. Operator: Our next question comes from Dana Telsey. Dana Telsey: Hi. Good morning, everyone, and congratulations on the results. As you think about the merchandise. Ernie Herrman: Oh. Well. Dana Telsey: You hear can you hear me okay? Ernie Herrman: Yeah. Yeah. Yeah. We can. Yep. Dana Telsey: Oh, great. Good after good morning, afternoon. Congratulations on the terrific results. Ernie Herrman: Thank you, Dana. Dana Telsey: Delivering a flat merchandise margin with tariffs is very impressive. And Ernie, as you mentioned the pricing mechanism of not only comparing against competitors, but even within the mix. How are you thinking about the merch margin going forward given the planning of tariffs? And just lastly, on store openings, closings, relocations, what are you seeing out there given the continued influx of available boxes? Thank you. Ernie Herrman: So on John, do you wanna? John Klinger: Yeah. I mean, as far as merchandise margin goes, yes, we were pleased that in the third quarter that we were flat given tariff pressures. Markdowns did come in favorable we were happy to see. And going forward, again, we feel confident that we can continue to offset the tariffs that we have out there based on what Ernie said earlier in the call of how our buyers are executing. And just continue to execute just the overall margin, the pretax profit, just by executing the cost efficiencies that we saw in the second quarter continuing to go after those in the back half of the year as well. Ernie Herrman: Yeah. Dana, I think a couple of highlights why we're feeling bullish on being able to deal with the tariffs as we go forward is the way we buy with and combined with the, the amount of availability out there right now and right. Which is really going to create more buying opportunities for our teams to even if the retail wasn't changing, they can buy better. Than we did before because of the amount of availability. And, and, yes, of course, the ability to adjust our ticket while maintaining, though, our value gap. Again, back to we look at what the out the door is on the like for like item, and then we say, if that if that has gone up, you know, we will preserve the gap, and maybe we'll go up. And adjust it accordingly. Again, we don't lead the charge on that, though. And then our flexibility, by the way, gives us the ability to diversify our source which I think is another we are fortunate that we don't have a contract with the customer saying we have to have x amount of people know that when they come to us, we may not have a category in inventory. As much as we did the time before. Or we might have more of something else versus that time. Yep. So that flexibility to diversify in our store just by where the best values are that we opportunistically go after really helps our merchandise margin deal with any tariffs. Because if we run into a say there's a category that's highly tariff driven and we're not happy with the values, we'd be on that. We can just downplay that. Category. Whereas maybe other retailers, they're living off of it. We're we're so diverse in our families of business that we're able to do that. And we can also the last thing I'd leave you with is you know, how we talk about the 1,300 buyers. So, you know, we have buyers. We have all these global buying offices in different locations over in Europe. And the Far East looking for excess inventories that nobody else has that. Nobody else has these satellite buying offices, like we have in all of these different locations that can source easier, flex, and faster sourcing in different countries. Yeah. Which can also allow us to flex against the tariff situation. So good question. I think that's why we're feeling o okay. And I'll leave you with it. It's still a challenge, but we feel like we have strategies to kind of deal with the challenge. John Klinger: And then getting to your, your store question, So we're still on track to hit our plan of just over a 130 net new stores. And so we're seeing a lot of great locations available to us. Going forward. That gives us optimism to continue a roughly a 3% net unit opening over the next couple of years. The other thing we're seeing a lot of success in, again, we can continue to see relocations as being a great, opportunity for us to relocate stores that there's a better shopping environment in the area that we can move to. And we're seeing improvement there. And then, of course, close to 500 remodels that we're planning on doing this year. And, again, that makes our stores the older stores, be able to compete similar to our younger stores? Because when the customer comes in, they're seeing a consistent shopping experience no matter what store they go into. And that's one of the things that you know, kind of separates us from some of our competition. You know, where, you know, the product mix just looks better when we maintain our store fit and finish. And so it all kinda warp walks hand in hand with the merchandise. Dana Telsey: Thank you. Ernie Herrman: Thank you, Dana. Operator: Our next question comes from Alex Straton. Alex Straton: Perfect. Thanks so much. Congrats on another great quarter. Ernie, I had a question on Marmaxx specifically. I know you spoke to categories being super healthy across the business. But I'm wondering if you could kind of break that down for us at Marmaxx and how you think exposure can change over time. Seems like that's been a part of the margins story there. And then maybe just one quick one for John. It seems like that you're embedding more particular, gross margin degradation in the fourth quarter. I'm wondering if there's something specific happening in that quarter or why that's the case? Thanks so much. Ernie Herrman: Yeah, Alex. So on Marmaxx, in terms of the families of it, as I think as I mentioned, our home business was, good there, which is nice to see. And, also, I'm proud of, you know, again, our HomeGoods and HomeSense businesses across the corporation and the home business within our full family stores across the corporation of Allgoods. So I don't wanna leave that out. But apparel has been, very healthy. And I think relative to the market, specifically in Marmaxx, relative to the market my guess is we're gaining market share. They're just looking at the results of the other apparel players, the way they've been trending over the last six months. And so I'm very proud of in the Pure Apparel, areas. And then as you know, we have and I can't give you the details by department, but I would tell you throughout our accessory areas, which, you know, we're an open book. If you walk in the store, we have many different areas and accessories that I believe we are the market in as well. So, you know, Alex, what I what I like about that is we're not just a, you know, it's not just one story why our business is so healthy. It's it's kind of widespread and that always allows us, I think, to feel good about where we're heading in the future. Because if something slowed up, I can still fuel one of the other areas to take advantage of the market opportunities that are out there. So, you know, again, once again, our planning and allocation teams work hand in hand with the buyers in developing these plans by family of business, whether it's ladies apparel or, kids apparel or men's apparel. Which families of business in those apparel layers, which in our you know, whether it's in, footwear or our beauty area or handbags, we are very strategic and balanced about the way we plan it, but we can turn on a dime based on what happens in the market. So hope hopefully, that gives you some color there. John Klinger: Yeah. As far as Q4 margins, so we are improving by 20 basis points versus last year. But is your question more comparison to Q3? To Q4 Yeah. Alex Straton: Exactly. So there's two things that are happening on the Q3 to q comparison. John Klinger: The first one is that in Q3, inventory levels are probably at their highest during the year. So we've got inventory cap favorability. Then we bring the inventories back down in the fourth quarter. The other piece of it is this year with our shrink a cool. So this year, we've got a favorable comparison Q1, Q2, and Q3 that reverses out in Q4. And it's just the function of how we accrue versus last year where last year, we had, a favorable impact in Q4. So when you're when you're planning it, we're planning a shrink slightly favorable this year. So naturally, Q1, Q2, Q3 there's a favorable variance. In Q4, it flips the other way to be slightly up on the full year. Is that clear? Alex Straton: Yep. Super clear. Thanks so much. Operator: Our next question comes from Adrienne Yih. Adrienne Yih: Yes. Good morning and congratulations. The store is both concepts look fabulous. Ernie, so the last time that we had sort of a path through at frontline of a real significant kind of price inflation was back kind of 2011 for the apparel retailers. And what we're seeing kind of since July, since these apparel retailers have thematically started to raise initial retailers or retails, we don't see a lot of pricing power. I gotta tell you. Like, we see hard pricing that looks really similar, hard prices similar to last year. And so, I guess, kinda if you can give us some perspective, I know what happened in 02/2011. Got the sales, and you didn't get the margins. And then you guys cleaned up. Right after that, you guys cleaned up and picked up a lot of the disruption. So Right. You know, like I said, we don't see we see promos out there on fall goods, on apparel specifically. Can you talk about category pricing power? Maybe footwear is better than apparel. Or something like that? I know it. Ernie Herrman: Right. Yeah. So without, telling you, know, again, for competitive reasons, we don't like to give what our strategy is, but let me give you the philosophy of it. Which is that we and I think apparel in general has been deflationary for years. So when I go back to your spot on when you talk about that it's been promotional for years. And the newness, in the world of apparel, as you if you look at it, it's been very spotty. You know, you have some pockets in ladies' businesses across the industry that have been good. I think men's has been very inconsistent, not great. So long story short, what we do is we look at the pot our pricing I guess you'd call it the pricing power a likelihood of where things might go up around us. Again, it's not us driving the bus on that. Would probably be in other areas. We just won't talk about what those areas are. And so, and it'll vary by items within apparel. That might go up. But in general, what you're hearing and feeling would kinda be in sync with what I would guess. Again, I just cannot give you many specifics on that front. Other than to tell you that we will manage it as I described earlier on, case by case. This is what's great about our model. Our buyers don't have to be, ahead of everybody in terms of deciding what the retail is. We just follow. And then we say, we're gonna follow, but we're gonna have the best value out there. And. Adrienne Yih: And then, John, a quick one for you on the horizon of kind of the flow through of tariffs. There's this kind of grace period. Right? If you ship it before August 9 and get it in before you know, October 5, that it's on the old tariffs. So how should we think about and I know you're not giving guidance, but how should we think about kind of impact probably not to you because of what Ernie just said, but impact to the sector kind of on the spring horizon, prices go up again. Right? Ernie Herrman: At front? I'll jump in on that. I think, Adrian, I think so what's hap the thing I've been seeing across the board, anything we're tariffs are hitting, even if they're changing, is there's a gradual I can some of the retailers seem to be not moving the price directly with the first landing of the tariff. And it's going up its steps. So I think you're gonna see a more of a little bit of a gradual increase in pricing as the tariffs come in. I don't know if that's answering the question. I don't think you'll see step all of a sudden Right. With the tariffs set, because I don't wanna, I think, turn off customers immediately by seeing a dramatic price shift. So I think they might they might they might absorb it initially for a little bit, and eventually, they'll get there. Again, that varies by retailer. And, again, the vendors could be negotiating with. John Klinger: Factories to also Not a doubt. Yep. Share some of the pressure. Yep. Adrienne Yih: Great. Fabulous. Best of luck. Ernie Herrman: Thank you, Adrian. Adrienne Yih: Impressive as always. Ernie Herrman: Thank you. Thank you. Operator: Our next question comes from Michael Binetti. Michael Binetti: Hey, guys. Thanks for taking our questions. I'll add my congrats on the quarter. Ernie Herrman: Thank you, Michael. Michael, by the way, we liked your headline. You had a great headline. Michael Binetti: Oh, thanks. We, we spent a lot of time being creative with the title. John Klinger: Thanks, man. Michael Binetti: When I maybe a few quick ones for the model. When I look at the fourth four comp in the quarter, slightly accelerating from the three in first quarter, did overall traffic accelerate? Or is it same as 1Q? And then on the merch margin, you said it was flat. With the inventory sorry, with the inventory hedge. Would merch margins have been down excluding that benefit? Or how should I think about the inventory hedge impact rest of the year? John Klinger: So as far as the four comp and what we saw for transactions, yeah, transactions again, were up across the board. I would say compared to Q1, probably the basket is maybe a little bit more. Particularly in Marmaxx. But then as far as your margin question, can you just ask that one more time? Sorry. Michael Binetti: Yeah. Yeah. You said it was flat. I know the inventory hedge was a component. On the gross margin. I didn't know if merch margin would have been down excluding that benefit. Just to help me think about the merch margin the rest of year. John Klinger: Yes. So the inventory hedge yeah, it was a slight it was it was the headwind that we did see. Going forward, you know, I think with the way the way you would look at it is that there probably is a little bit of a headwind in the back half, but not significant. Michael Binetti: Okay. And then can I just ask a little bit of a follow-up to another question? A little bit about the margin bridge on pretax expanded 50 basis points in second quarter. Guidance is for a little bit of compression, 25%, 35% in third quarter and then reaccelerate to expansion 10 to 20 basis points in fourth quarter. Can you maybe just help me connect those? Any unusual items to be aware of the rest of the year? Either this year or in the base? John Klinger: So as far as the bottom line pre-tax profit, so Q3 they're we obviously have some headwinds that average retail being one of them. The reversal of expenses from the second quarter, you know, mainly into third quarter is another headwind there. And then in the fourth quarter, again, we have you know, the benefit from the higher sales volume that between Q3 and Q4. But again, what we talked about before about Q3 and Q4, Q3 has the benefit from the inventory cap, and Q4 has the headwind from the from the shrink accrual. Does that make sense? Michael Binetti: Yeah. Couple things to work through. Okay. I appreciate it. We'll talk to you guys later on. Thank you. Ernie Herrman: Thank you, Michael. Operator: Our last question comes from Marni Shapiro. Marni Shapiro: Hey, guys. Congratulations. Great quarter in the store looked beautiful. HomeGoods for back to college. Honestly stunning. I have a quick question for me. You've mentioned gifting, I think, more than once in your prepared remarks, which is not always usual for you. So I'm assuming that you feel good about any buys that you've made in advance. In the holiday, and you were able to pack away some of that given how heavily tariffed holiday decor is. But are you seeing a change in consumer behavior in your stores that is kinda shifting your focus a little even more so to gifting? I mean, you guys have done an improved job year after year after year, but has something changed? Because you don't usually mention it this early in the year in your prepared comments. Ernie Herrman: Right. No. Great question, Marni. Well, part of part of what's happened over the last couple of years, we've evolved in terms of actually going after gifting for not just a holiday. We've started going after the gifting seasons, whether it's Mother's Day, Father's Day, And, what's happened is more a lot of our merchants merchandise managers and their and their families of business have figured out product, to go after that's more appropriate to be gifted. I think you combine that with there's been momentum. If you look at Marni, you know, you shop our stores aggressively. I know you're right commenting on what you see there. You go to holiday, and we if you look at our results in Q4, they've been, super consistent year after year. And I think what's been building year after year, what we're showing everybody is that we're very fresh as you go into holiday. As you get nearer to Christmas. And back again to our a combination of our merchants and our planning areas given the right product that's very giftable. Where we think where some retailers have vacated some of those items in certain categories, even in apparel, And I think we tend to go after some of the I guess, market share opportunity categories where we feel like other retailers are away, and we can go after those gifting categories more aggressively. And for this back half and holiday, that's what I'm seeing our teams do. And that's across home and apparel and accessories. They're going, strongly after the categories that tend to spike during the gifting category. Combine that with the and you know this as well. I think you've commented on it. As we've talked about is we're cool we are cool today be a gifting destination, Right? And I think I know you and I have, joked about that at the time, but true. We are people like giving a HomeGoods or a TJ Maxx or, every place we're in, our brands have become, very desirable to be gifting destination brands. And I give that's the whole team. That's whether you're up at Winners or in Europe or every division, marketing wise, store, store execution wise in terms of treating the well and most importantly, the product I think the whole thing is working right now in terms of more consumers wanting to buy gifts from TJX brands. Marni Shapiro: And can I just follow-up on that with the home your HomeGoods your HomeGood back to college was really next level? I've never seen you guys look that cohesive in your storytelling. So I'm listening to you talk about gifting. I'm thinking about what I saw in HomeGoods for back to college. And thinking that you guys from a merchant standpoint are really doing a better job storytelling and merchandising in store, that the buying was always there, but now combining it with the storytelling in store, is that kind of been where the unlock is around all of these holidays and events? Ernie Herrman: Yes, Marni. Yeah. And I should have mentioned that. Our store teams and in conjunction, again, with the merchants executing for these seasonal time periods like a back to college. They're doing a great job in buying the product for those time periods. And then the stores excellent. The HomeGoods, store teams are doing an excellent job on pulling that together to make it really easy to shop. And it you know what that does. Right? Does somebody like you or me equate an impulse to purchase a two or three items instead of just one when you see it all put together that way. Marni Shapiro: I'm going broker [indiscernible] congratulations to you guys. This is a great quarter. Ernie Herrman: Thank you very much, Marni. Really appreciate it. Mhmm. And that was our, last question. I would like to thank you all for joining us today. We look forward to updating you again on our third quarter earnings call in November. Thank you, everybody. Operator: That concludes today's conference. Thank you for participating. You may disconnect at this time. Trump's Tariffs Could Create $1.5 Trillion AI Gold Rush The Motley Fool's analysts are tracking a massive shift in U.S. tech. Over $1.5 trillion is already flowing into infrastructure, AI, and advanced manufacturing… and the number keeps climbing. Following a major tariff policy shift, a new AI Gold Rush is taking shape, and we think . It builds the tech infrastructure that Apple, OpenAI, and others suddenly can't live without. We just released a full write-up on this under-the-radar stock — and why now might be the exact moment to move. Continue » *Stock Advisor returns as of August 18, 2025 This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends TJX Companies. The Motley Fool has a disclosure policy. TJX (TJX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool Sign in to access your portfolio
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Walmart earnings expected to show US sales growth continued in Q2 as consumers seek value
Walmart (WMT) is expected to post another robust quarter as consumers likely turned to the big box retailer's low-price strategy as tariff-related uncertainty pushed consumers to more carefully scrutinize their household budgets. Total US same-store sales are expected to grow 4.2%, which includes both Walmart US and its wholesale subscription business, Sam's Club, per Bloomberg consensus estimates. Wall Street expects Walmart US same-store sales growth to increase 4.05%, driven by higher foot traffic, ticket size traffic, and e-commerce. Sam's Club is expected to drive growth, with sales forecast to rise 5.3%. Gains in grocery, improvement in select nondiscretionary categories, progress on e-commerce and marketplace, as well as "gains from rollbacks and selective promotions" will benefit the results, Telsey Advisory Group analyst Joe Feldman said in a note to clients. "We also anticipate continued increases in share of wallet across all income cohorts, including upper-income households," Feldman added. Revenue is expected to clock in at $176.05 million, alongside adjusted earnings of $0.74. Investors will also be looking for further commentary around tariffs after the company said it would have to raise prices earlier this year. Read more: 5 ways to tariff-proof your finances Walmart CEO Doug McMillon told analysts in May, "We aren't able to absorb all the pressure given the reality of narrow retail margins." He added that tariffs had already led to price increases in April and May. At the time, McMillon said the "reset of costs" would continue throughout the year, adding that for an imported item, "You pay the tariff at the time it comes through customs ... even if the tariff rate comes down later, the cost has been elevated." Robert Ohmes of Bank of America estimated Walmart imports roughly 15% of its US sales from China. Around 60% of the US sales are groceries, which are largely tariff-exempt if they're produced domestically or in Mexico and Canada. Ahead of this report, Ohmes said the retailer is "well positioned to manage tariffs given its scale with suppliers, advanced pricing, automation, and inventory management." Year to date, shares of Walmart are up 12%, compared to the S&P 500's (^GSPC) 9% gain. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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One Of The Economy's Most Important Numbers Is Quietly Getting Better
Key Takeaways An uptick in worker productivity bodes well for the future of the standard of living in the U.S., according to a recent analysis. Automation, working from home, and a surge of new businesses have all contributed to an upswing in how much workers produce each hour on the job. Despite a generally positive outlook, tariffs and an immigration crackdown could stifle productivity. How much did you get done at work today? How everyone answers that question determines one of the most important statistics in the economy, and it's quietly been on the workers' output per hour rose at a 2.4% annual rate in the second quarter, the Bureau of Labor Statistics reported earlier this month. Productivity bounced back after a 1.8% downturn in the first quarter. The latest rate is above the historic average of 2.1%.While that small difference may not seem like a big deal, it's a reassuring signal that, beneath the churn of stock values, employment statistics, inflation, and other widely watched figures, people produce more value for every hour they're on the job. And that's huge for the future of everyone's standard of living."The adage that productivity is the elixir of economic growth continues to ring true," economists at Wells Fargo Securities led by Sarah House wrote in a commentary this steady increases in annual productivity have added up tremendously over time, as people have learned how to work more efficiently and businesses have invested in ever more advanced equipment. The U.S. economy currently produces 4.5 times more goods and services per person than it did in 1947, while people actually work fewer hours on average, according to data from the Bureau of Labor Statistics and the Bureau of Economic to Wells Fargo economists, there are at least three key reasons productivity is improving these days and could continue to do so well into the future. Automation Businesses have heavily invested in machines and software: for instance, Wal-Mart has bought self-driving forklifts, Amazon now has nearly as many robots working for it as people, and Chipotle is testing out an avocado-peeling robot. Not to mention the adoption of generative AI, which could help some workers be more productive and, in some cases, even replace human workers entirely. Work From Home Despite some high-profile companies touting return-to-office mandates, far more people are working from home than they did before the pandemic. That could be making the workforce more efficient. The Wells Fargo economists noted the effect of remote work is "contested" in the business world, with some notable downsides, including making it harder for entry-level employees to learn from their colleagues. Entrepreneurship The pandemic's disruption turned out to be innovative in at least one major way: millions of people decided to start their own businesses. According to Census Bureau data, the surge of business applications in 2020 is still going strong. That could help spur innovation and competition, which are good for productivity. Can It Last? Economists at Wells Fargo expect the productivity boost to continue, running above the long-term historical average of 2.1%. But not everyone is so optimistic. The Congressional Budget Office projects productivity will rise at 1.4% a year between 2025 and policy changes could disrupt the trend. President Donald Trump's crackdown on immigration and implementation of tariffs could have some productivity downsides, the Wells Fargo team wrote. For instance, industries protected from foreign competition will have less incentive to innovate, while a downturn in highly skilled immigrants would make the workforce less productive. Read the original article on Investopedia
