Is TJX Companies’ Expansion Into Mexico a Good Move?

The TJX Companies, a premier off-price apparel and home fashions retailer in the U.S. and across the globe, has announced a strategic joint venture with Grupo Axo, S.A.P.I. de C.V., which operates global brands in Mexico and South America. This partnership aims to expand TJX’s reach into the Mexican market by leveraging Axo’s established presence and retail network in the region.

Ernie Herrman, CEO and president of TJX, expressed enthusiasm about the partnership, highlighting the potential to expand TJX’s successful off-price retail model into Mexico. “With TJX’s decades of experience as an international, off-price retailer, and Axo’s established base of over 200 off-price stores and 30 years of operating experience in Mexico, we see excellent potential to grow in another region and deliver our value proposition to a growing population of fashion- and value-conscious consumers in Mexico,” Herrman said.

Andrés Gómez, co-founder, chairman, and CEO of Axo, echoed this sentiment, expressing confidence in TJX as an ideal partner. He emphasized the opportunity to enhance and innovate the off-price retail experience in Mexico through this collaboration.

Under the agreement, TJX will hold a 49% stake in the joint venture, while Axo will own 51%. The collaboration will encompass Axo’s off-price physical store business in Mexico, which includes over 200 stores operating under the Promoda, Reduced, and Urban Store banners. The transaction, anticipated to close later this year, is pending antitrust clearance in Mexico and other standard conditions. Financial details of the deal will be disclosed upon completion.

Despite the strategic importance of this partnership, TJX does not expect it to significantly impact its sales, profit, or earnings per share guidance for the current fiscal year 2025. This cautious outlook underscores the company’s focus on long-term growth and market penetration rather than immediate financial gains.

Grupo Axo is a prominent multi-brand and multi-channel retailer, known for its extensive portfolio of apparel, fashion accessories, footwear, beauty, and personal care products. The company operates over 6,900 points of sale in department stores and more than 970 boutiques across Mexico, Peru, Chile, and Uruguay.

TJX Companies Inc. saw a significant rise in its stock price following a strong earnings report last month. The retailer, which includes T.J.Maxx, Marshalls, and HomeGoods, reported a 22% increase in first-quarter earnings for fiscal 2025, reaching 93 cents per share. This exceeded analysts’ expectations of 88 cents per share, marking the seventh consecutive quarter of earnings growth.

Following the earnings report, TJX stock initially surged by 6.5% to new record highs but closed with a 3.5% gain, just below the 102.04 buy point in a 13-week, double-bottom base. The stock edged lower the following morning.

Net sales rose 6% to $12.48 billion, matching forecasts and continuing a six-quarter growth streak. Consolidated comparable sales increased by 3%, with U.S. HomeGoods stores and Canadian TJX locations each seeing a 4% rise.

Despite strong quarterly results, TJX’s future guidance was more conservative. The company projected 2% to 3% growth in comparable sales for the second quarter and fiscal year 2025. Expected earnings for Q2 were forecasted between 88 cents and 90 cents per share, below the analyst consensus of 94 cents. Full-year earnings were projected to be $4.03 to $4.09 per share, slightly under the expected $4.11 per share.

As of May 23, TJX stock has risen by 7.8% so far this year, demonstrating investor confidence in the company’s resilience and growth strategy in a competitive retail landscape.