TJX Companies Inc. has seen more, and younger, consumers turn to its brands for deals and gifting, allowing it to end last year with nearly $50 billion in sales.
CEO and President Ernie Herrman’s outlook for the current year is upbeat on the business’s current inventory levels and its ability to continue to keep its stores well stocked.
“The first quarter is off to a strong start,” Herrman said in a call with analysts Wednesday. “Availability of quality, branded merchandise is phenomenal. We are in a great position to take advantage of the opportunities we are seeing in the marketplace.”
The CEO pointed to TJX Companies’ more than 1,200 buyers who sourced last year from about 21,000 vendors, including new brands, when speaking about the outlook on store assortments.
The company expects store growth to continue this year, with the opening of 45 net new U.S. stores for its two largest businesses, T.J. Maxx and Marshalls. U.S. plans also call for 50 HomeGoods stores, 18 Homesense, and 18 Sierra doors.
Internationally, the retailer said it plans to open 11 stores in Canada, 18 in Europe, and six in Australia, with remodels planned for about 400 locations.
Longer term, TJX sees the potential to grow from its current base of 4,835 stores, looking to add more than 1,400 stores and increase its revenue to more than $60 billion.
Skewing Younger
Product availability and an increasingly diversified assortment has helped the company win new customers.
“We’re starting to differentiate ourselves even more because of all the brands that we have,” Herrman said. “Across the different brands and the different fashion looks and the different quality levels, we’re covering a wide band of pricing throughout all of those and trying to appeal to a wider customer range than your typical retailer, which I think is working.”
The company’s brand popularity among consumers on TikTok was brought up by an analyst during Wednesday’s call, with Herrman acknowledging TJX’s continued ability to attract what he said has been an “outsized number” of younger consumers. The CEO attributed part of that trend to what he said has been “very effective” targeted marketing across channels and an increasing number of shoppers turning to the company’s retail brands for gift giving.
“We’re becoming a gifting destination all year long, which is an indication that we’re cool because typically when they buy gifts, they don’t do it from uncool retailers,” Herrman said. “And, years ago, I don’t think we were a big candidate for gifting and now we are throughout the year….”
TJX Financial Results
The commentary followed a strong quarter and full year for the business.
TJX reported for its fiscal fourth quarter ended Jan. 28:
- Company-wide net sales of $14.5 billion, up 4.8% from the year-ago period
- Net income increased 14% year-over-year to $1 billion
- U.S. comparable sales, which doesn’t include e-commerce, rose 4%
The company’s results for the full fiscal year included:
- $49.9 billion in revenue, up 3% from the previous fiscal year
- Net income totalling $3.5 billion, compared to $3.3 billion a year ago
- U.S. same-store sales for the year remained flat
- Inventory totalling $5.8 billion, down from $6 billion in the prior year. Herrman said inventory is expected to increase in the current quarter, but the executive team was overall “comfortable” with levels.
Looking ahead, TJX said it expects same-store sales to increase 2% to 3% in the current quarter, with earnings per share of 68 cents to 71 cents.
