Is Flexibility The Key to TJX’s Success?

The TJX Companies, parent of HomeGoods, Marshalls and T.J. Maxx, exceeded its own expectations for the first quarter with a sales increase at the top of its forecast and earnings that came in well above the company’s plan.

Ernie Herrman, CEO and president of TJX, speaking yesterday on the company’s earnings call, said the results were “a testament to the strength and resiliency of our flexible off-price business model.”

Mr. Herrman praised the company’s buyers for finding “amazing deals in the marketplace” and its logistics organization for moving merchandise “to the right stores at the right time.”

TJX reported a three percent gain in net sales and same-store comps as more shoppers visited the off-price retailer’s stores in search of bargains. Marshalls and T.J. Maxx were particular standouts with traffic and same-store sales up in the mid-single digits.

Mr. Herrman and CFO John Klinger each expressed optimism that the company would continue to gain share as more consumers shopped at Marshalls and T.J. Maxx’s stores and online.

TJX also sees opportunities for its HomeGoods business to increase market share even as its first-quarter same-store sales fell seven percent against a 40 percent jump during the same period in 2022.

“We continue to see a terrific opportunity to capture additional share of the U.S. home market,” said Mr. Kinger. “In the first quarter, we opened our 900th HomeGoods store and continue to see excellent opportunities to grow both our HomeGoods and Homesense banners.”

Mr. Herrman said TJX’s banners have built-in advantages with low price points and treasure hunt shopping experiences.

“We see ourselves as leaders in flexibility,” he said. “The flexibility of our buying allows us to seek out the best opportunities and hottest trends in the marketplace. Our store formats and fixtures allow us to flex our floor space to support our opportunistic buying. Further, our systems and the flexibility of our supply chain allow us to merchandise stores individually with a curated mix of good, better and best brands with a wide span of price points.”

The TJX CEO said the company’s banners have successfully attracted “an outsized number of younger customers to our stores, including many Gen Z and millennial shoppers, which we believe bodes well for the future.”

TJX opened 24 new U.S. stores across its HomeGoods, Homesense, Marshalls, Sierra and T.J. Maxx banners in the first quarter.