TJX Companies Continue to Break Records
Published February 26,2020
The off-price retailer, which operates T.J. Maxx, Marshalls, Marmaxx and HomeGoods, released quarterly earnings Wednesday before the bell, revealing more than $40 billion in annual sales, prompting the stock to jump more than 7 percent in pre-market hours.
“We are extremely pleased with our strong fourth-quarter results, as both sales and earnings per share significantly exceeded our expectations,” said Ernie Herrman, chief executive officer and president of the TJX Cos. “We saw strength across the company, with each major division delivering [comparable] sales growth of 4 percent or higher, allover strong increases last year and all primarily driven by customer traffic. Our exciting brands and gift-giving assortments at great values, supported by our marketing, attracted customers around the globe during the holiday season and beyond.
"We are also very proud to well surpass $40 billion in annual sales, a tremendous milestone for our company,” Herrman continued.
For the three-month period ended Feb. 1, net sales grew 10 percent to $12.2 billion, up from $11.1 billion the same time last year. Profits also increased to $984 million, up from $841 million during 2019’s fourth quarter. For the full 2020 fiscal year, net sales rose to $41.7 billion, up from $38.9 billion the year prior, as profits expanded to $3.2 billion, up from just over $3 billion.
Across all brands, comp sales increased, marking the company’s 24th consecutive quarter of comp growth.
“Looking ahead to 2020, the year is off to a solid start and our global organization remains focused on bringing great values to shoppers every day,” Herrman said. “We see plentiful opportunities for TJX in today’s retail landscape and are confident we will continue to capture market share. We look forward to many more successful years ahead and continued growth around the world.”
The off-price channel has certainly figured out a winning retail formula: in-store experiences that cannot be replicated online while offering name-brand products for a discounted price.
“We continue to believe these retailers are best positioned due to their locations [off-mall] and their consumer centric assortments,” said a research note from Jane Hali & Associates. “Sales have obviously shifted from department stores to off-price.”
Meanwhile, the coronavirus continues to run rampant, resulting in store closures around Asia and parts of Europe, causing some designers to cancel shows during Milan Fashion Week, sales to dip and the stock market to tumble. But the TJX Cos., which closed down 3.29 percent to $59.72 a share Tuesday, is up nearly 15 percent year-to-date.
In its quarterly update, TJX did not address the impact the coronavirus and the associated supply chain tie-ups could have on its supply of product, which comes both directly from vendors and from other retailers.
“A large percentage of the population is looking for value,” said Ike Boruchow, retail analyst at Wells Fargo. “Those consumers want the most value that they can possibly get. So I don’t see any fundamental problems, or any fundamental wall that these guys should hit anytime soon.”