TJX proves that even as tech-savvy customers flock to online shopping sites, they still love hunting for a good bargain at the store.
The parent company of TJMaxx, Marshall’s and Home Goods reported better-than-expected earnings results as shoppers continued to wander the aisles for discounts on the latest fashion apparel, accessories and home furnishings. 2016 marked its 21st consecutive year of comparable-store sales increases – a key metric for retailers that represents transactions at stores open at least a year.
Part of TJX’s secret to success in a difficult retail environment is its ability to quickly react to constantly-shifting shopping trends, and buy in an opportunistic way to limit mark-down risk aimed at moving excess inventory. “If you look at off-price retailers, you have somewhat of a treasure hunt. You might go in with an idea of what you want or need but you might find something else. And every time you go in there might be something different,” Moody’s Christina Boni said. “There is a freshness of inventory versus department stores which have long lead times.”
“We were particularly pleased that customer traffic was the primary driver of our comparable-store increases at every major division, which tells us our eclectic merchandise mix and amazing values continue to resonate with customers across geographies,” said the company’s president and CEO Ernie Herrman in a statement.
With more customers coming through the doors and visiting more frequently, the company sees continued opportunity for growth despite the challenging retail environment. Last year, while other dominant U.S. chains like Macy’s were working to reduce costs and store counts, TJX grew its store base by nearly 6% without shuttering a single location. In the year ahead, Herrman announced plans to launch a second home concept complementary to its existing Home Goods brand in an effort to continue growing customer traffic and sales.
TJX, the only off-price retailer with a serious global presence, has laid out a long-term plan to operate 5,600 stores (up from its current total of 3,785) in countries where its banners already exist. For the U.S., the initiative calls for adding about 800 total T.J. Maxx and Marshalls stores. Last year, the retailer opened 37 new T.J. Maxx and 32 new Marshalls stores in the U.S. For its HomeGoods division, which has 568 stores, the company envisions an added 432 stores.