The TJX Companies, which owns clothing discounter TJ Maxx, had reason to celebrate in its Q2 earnings. The company enjoyed 5.6% year-over-year sales growth to hit $13.5 billion in net sales.
In the meantime, TJX also opened the 5,000th store in TJX’s worldwide footprint. Its stores include the brands Marshall’s, HomeGoods, Marmaxx (Marshalls and TJ Maxx), Winners and Homesense.
TJX Cos. Inc. ranks No. 64 in the Top 1000. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in North America by web sales. There, it falls under the Apparel & Accessories category. Digital Commerce 360 projects web sales for TJX will reach $1.6 billion in 2024.
TJX web sales by year
TJX Q2 earnings highlights
“We are confident we will have an exciting assortment of fresh goods across all of our stores and online throughout the fall and holiday selling seasons,” said Ernie Herrman, president and chief executive officer of The TJX Companies.
Among other key developments, TJX reported that its consolidated comparable sales increased, while both apparel and home categories saw comparable sales increases. In addition, its pretax profit margin of 10.9% was up 50 basis points versus last year.
Marmaxx was a highlight, with comparable store sales increasing 5%. Segment profit margin was 14.1%, up 40 basis points versus last year.
Meanwhile, gross profit margins were higher across the board, a benefit that the company attributes to lower freight costs.
TJX’s turn to Mexico
The company also announced a partnership with Mexico-based retailer Axo to expand its off-price business into the country. The joint venture will include Axo’s discount physical store business in Mexico, which includes over 200 stores for its Promoda, Reduced, and Urban Store banners. TJX will own 49% of the joint venture while Axo will own 51%.
TJX preparations for the holiday season
John Klinger, TJX’s chief financial officer, said its brands are in good shape regarding inventory for the online holiday shopping season, both online and in stores.
“We feel great about our inventory levels and believe we are well positioned to take advantage of the outstanding availability we’re seeing in the marketplace and flow fresh assortments to our stores and online this fall and holiday season,” Klinger said.
Industry analysts are bullish about TJX’s prospects, with consumers seeking value in the current macroeconomic environment.
Foot traffic to TJX stores
“TJ Maxx — and the off-price retail category as a whole — posted strong visitation trends during the most recent quarter,” said R.J. Hottovy, head of analytical research at Placer.ai, which monitors retail foot traffic.
He added that some of the outperformance can be attributed to consumers seeking out value, but that the chain has also done an excellent job of making its stores a part of people’s shopping routines.
“Our data indicates a strong pickup in weekday visits the past several years,” Hottovy said. “This indicates that the chain has become more of a destination for more everyday, consumable products, something that may help to sustain long-term growth.”
Carol Levenson, a senior analyst at bond research firm Gimme Credit, said TJX’s performance mirrors that of another large retailer.
“Midway through the retailing reporting season, TJX’s comparable store sales growth of 4% is up there with Walmart U.S. and well ahead of everybody else,” Levenson said.
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