TJX Companies Inc., parent to T.J. Maxx and other discount retailers, is sitting in the catbird seat going into the rest of the year.
The company, operator of 4,865 stores, oversees a portfolio of retailers that includes the T.J. Maxx, Marshalls, HomeGoods, Sierra, and Homesense brands.
“Our first-quarter results are a testament to the strength and resiliency of our flexible off-price business model,” TJX CEO and President Ernie Herrman said on a call with analysts Wednesday. “I am very pleased with the excellent execution of our teams across the company whose collective efforts brought our shoppers great values and a compelling treasure-hunt shopping experience every day.”
TJX reported net sales for its fiscal first quarter ended April 29, up 3% from the year-ago period to $11.8 billion. The company notched a 55% increase in net income in the quarter of $891 million.
Same-store sales rose 3%, which was driven by higher customer traffic and came in on the high end of the company’s projections.
TJX noted its pretax profit margin in the April quarter was 10.3%, exceeding its own projections and up from the 7.5% recorded in the year-ago period.
“Our buyers took advantage of amazing deals in the marketplace. And the organization flowed product to the right stores at the right time, and did a great job of merchandising the product, delivering on customer satisfaction, and marketing,” Herrman said. “We are happy with our good start to the second quarter and are in a great position to take advantage of the phenomenal buying environment and ship fresh selections to our stores and online.”
Market Strengths
The CEO said apparel and accessories across its business continues to be an area of strength.
The quarterly performance bodes well for the business as Herrman said TJX sees opportunity for market share growth domestically and internationally.
He outlined to analysts the company’s competitive advantages, including a value proposition, differentiated shopping experience with multiple product deliveries weekly, and a buying and merchandising team that can move quickly to capitalize on market trends.
Herrman also pointed to the diverse customer base shopping TJX stores as it looks to appeal to consumers across ages, income levels, and personal styles. The retailer has also been successful in attracting Gen Z and millennial shoppers.
“We really don’t want to be pigeon-holed into any group of income, demographics, or how this fashion looks – whether conservative, traditional,” Herrman said of the shoppers TJX brands attract. “We want customers from all demographics, income (levels), and even fashion looks.”
Looking Ahead
TJX said it expects same-store sales in the current quarter to be up in the range of 2% to 3%. Net income in the fiscal second quarter is expected to be between $838.8 million and $873.8 million.
The company projects its pretax profit margin in the current quarter to be between 9.3% and 9.5%.
Over the long run, TJX believes it can add more than 1,400 doors without the need for additional brands in its portfolio or expansion beyond the countries it already operates in.
Herrman added his own upbeat outlook on future inventory availability to support that expansion.
“I can’t emphasize this enough, we are extremely confident that there will be more than enough inventory available in the marketplace to support our growth plans,” Herrman said. “Over the last year, our more than 1,200 global buyers have sourced merchandise from a universe of approximately 21,000 vendors, including many new ones. Overall availability of quality branded merchandise has never been an issue for us throughout our history as vendors and brands continue to produce goods for multiple channels, including in-store, online, and direct-to-consumer.”
Kari Hamanaka can be reached at kari@shop-eat-surf-outdoor.com.
