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F500-2023-087-TJX

The off-price department store chain brought in nearly $3.5 billion in profits in 2022, a 7% increase over 2021. TJX dropped 12 spots on the Fortune 500 list after a 22-spot jump last year. 
<ul> 
 	<li>Marmaxx, TJX’s apparel unit, was its biggest revenue driver, bringing in $30 billion of the $49.9 billion the company generated overall. Its HomeGoods division, however, saw slower sales after two years of expansion during the pandemic.</li> 
 	<li>TJX continues to lag in the e-commerce space, which held the company back at COVID’s height.</li> 
 	<li>Still, TJX has outlasted many of its competitors; Bed Bath &amp; Beyond’s bankruptcy may lead to more foot traffic at TJX stores.</li> 
</ul>

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F500-2022-075-TJX

TJX is the parent company of off-price retailers like T.J.Maxx, Marshalls, HomeGoods, Sierra, and Homesense, operating almost 4,700 stores in nine countries. The pandemic initially had a severe impact on revenue for TJX, which gets only a small percentage of its sales from e-commerce. But as lockdowns ended, the company rebounded, and in 2021, it grew revenue by 51% year over year, enabling it to jump 22 spots on this year’s list. In March 2022, TJX announced it would sell its 25% stake in Russian apparel retailer Familia in response to Russia’s invasion of Ukraine. In April 2022, the company announced that it is aiming to achieve net-zero greenhouse gas emissions in its operations by 2040.

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<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;TJX took a particularly brutal beating from the pandemic last year, hit by the double whammy of having almost no e-commerce to fall back on when its stores were closed for long periods, and the precipitous drop in spending on fashion. Sales fell 23% to $32.1 billion—but the damage could have been worse. For one thing TJX’s HomeGoods business slipped only 4%. And when its other banners, T.J. Maxx and Marshalls, reopened, business rebounded quickly. There are signs of pent-up demand for fashion apparel that should give TJX a boost this year (barring any new outbreaks that close stores en masse again), and spending on the home continues apace.&quot;}" data-sheets-userformat="{&quot;2&quot;:14723,&quot;3&quot;:{&quot;1&quot;:0},&quot;4&quot;:{&quot;1&quot;:2,&quot;2&quot;:16777215},&quot;10&quot;:2,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Arial&quot;,&quot;16&quot;:11}">TJX took a particularly brutal beating from the pandemic last year, hit by the double whammy of having almost no e-commerce to fall back on when its stores were closed for long periods, and the precipitous drop in spending on fashion. Sales fell 23% to $32.1 billion—but the damage could have been worse. For one thing TJX’s HomeGoods business slipped only 4%. And when its other banners, T.J. Maxx and Marshalls, reopened, business rebounded quickly. There are signs of pent-up demand for fashion apparel that should give TJX a boost this year (barring any new outbreaks that close stores en masse again), and spending on the home continues apace.

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F500-2021-97-TJX

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G500-2020-292-TJX

The off-price discount fashion and home goods retailer continued its long march toward retail dominance, with sales up 7% in 2019, to $41.7 billion, making it bigger than Macy’s and J.C. Penney combined. In the early days of the pandemic, TJX revenues fell off nearly entirely, with all stores closed and only a tiny e-commerce business in operation. But coming out of the lockdowns, TJX's strong financials should make its stores even more desirable to fashion brands as department stores continue to wither, analysts say. What’s more, TJX’s home furnishings chain HomeGoods has been booming alongside the more apparel-oriented T.J. Maxx and Marshalls.

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F500-2020-080-TJX

The off-price discount fashion and home goods retailer continued its long march toward retail dominance, with sales up 7% in 2019, to $41.7 billion, making it bigger than Macy’s and J.C. Penney combined. In the early days of the pandemic, TJX revenues fell off nearly entirely, with all stores closed and only a tiny e-commerce business in operation. But coming out of the lockdowns, TJX's strong financials will make its stores even more desirable to fashion brands as department stores continue to wither. What’s more, TJX’s home furnishings chain Home Goods has been booming alongside the more apparel-oriented T.J. Maxx and Marshalls.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Founded in 1962, TJX is an off-price retailer known for its portfolio of discount department stores, including T.J. Maxx, Marshalls, and HomeGoods, as well as various international brands like Winners and TK Maxx. It operates in the U.S., Canada, Europe, and Australia.

Q2 2027

Q1 2027

Q4 2026

Q3 2026

Q2 2026

Q1 2026

Q4 2025

Q3 2025

TJX (TJX): Company Profile, Stock Price, News, Rankings

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Ladies and gentlemen, thank you for standing by. Welcome to the TJX Companies Fourth Quarter Fiscal twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. As a reminder, this conference is being recorded, 02/26/2025.

I would like to turn the conference over to Mr. Ernie Hermann, Chief Executive Officer and President of the TJX Companies Inc. Please go ahead, sir.

Thanks, Courtney. Before we begin, Deb has some opening comments.

Thank you, Ernie, and good morning. Today's call is being recorded and includes forward looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause the actual results to vary materially from these statements, including, among others, the factors identified in our filings with the SEC. Please review our press release for a cautionary statement regarding forward looking statements as well as the full Safe Harbor statements included in the Investors section of our website, tjx.com. We have also detailed the impact of foreign exchange on our consolidated results divisions in today's press release and in the Investors section of TJX.com, along with reconciliations to non GAAP measures we discuss.

Thank you. And now I'll turn it back over to Ernie.

Good morning. Joining me and Deb on the call is John. I want to first take a moment to share our care and concern for everyone affected by the wildfires in California. While many of our associates were affected, we are grateful that they are all safe. We have offered resources to our associates and also made emergency donations to World Central Kitchen and the Los Angeles Regional Food Bank to help provide support for people who most need it.

Now to our business update. I am very pleased with our outstanding fourth quarter. Our sales, profitability and earnings per share were all well above our expectations. I am particularly pleased that our overall comp sales growth of 5% was driven by strong consistent comp increases of 4% or above at each of our divisions. Further, our comp sales growth across all of our divisions was once again driven by an increase in customer transactions.

Clearly, our great values, gifting assortment and freshness of our mix resonated with our shoppers during the holiday season. For the full year, overall sales surpassed $56,000,000,000 and we opened our five thousandth store, a milestone for our company. I want to recognize the excellent execution across our company which led to our above plan results. Full year comp store sales growth of 4%, a significant increase in profitability and a double digit increase in our earnings per share were all above our guidance for the year. We are confident that we continue to attract new shoppers in every country we operate in and that there are plenty of opportunities to further grow our customer base going forward.

I want to thank all of our global associates for their excellent work in 2024. I am extremely grateful for their continued dedication and commitment to TJX and to our customers every day. As we begin 2025, we are excited about the opportunities we see in our business and have many initiatives planned that we believe will further drive sales and traffic to our stores and online. Availability of merchandise is fantastic and we believe we are in a great position to execute on our merchandising plans and keep delivering our Sharper's outstanding values on great brands and fashions throughout the year. I'll speak more about our full year performance and our confidence in our growth opportunities over the long term in a moment.

I'll turn the call over to John to cover our results in more detail. Thanks, Ernie.

I also want to add my gratitude to all of our global associates for their hard work and commitment to TJX this year. Moving to our results. As a reminder, last year our fiscal calendar had an extra week in the fourth quarter. Therefore, where applicable, we'll be referencing adjusted numbers for last year's results, which exclude the impact of that extra week. Now I'll share some additional details on the fourth quarter.

Net sales grew to $16,400,000,000 a 5% increase versus last year's adjusted sales. As Ernie mentioned, our fourth quarter consolidated comp sales increased 5%, which was well above our plan and driven by an increase in customer transactions. We were very pleased to see strong comp sales increases in both our overall apparel and home categories. Pre tax profit margin of 11.6% was up 70 basis points versus last year's adjusted 10.9%. Our pre tax profit margin was 70 basis points above the high end of our plan.

This was primarily due to a benefit from lower shrink as well as expense leverage on our above plan sales, partially offset by higher incentive compensation accruals. Gross margin was up 100 basis points versus last year's adjusted 29.5%. This was primarily driven by a benefit from our year end true up of shrink expense and strong mark on. SG and A was 19.2%, up 30 basis points versus last year due to incremental wage and payroll costs. Net interest income was neutral at pre tax profit margin versus last year.

All this led to a diluted earnings per share of $1.23 up 10% versus last year's adjusted $1.12 and also well above our plan. As for our divisional performance in the fourth quarter, we saw strong comp store sales growth at every division, all driven by increases in customer transactions. We were particularly pleased with the outstanding sales performance at our international divisions with TJX Canada comp with TJX Canada's comp sales increasing 10% and TJX International comp sales up 7%. Now to our full year fiscal twenty twenty five results. Net sales grew to 56,400,000,000 a 6% increase versus last year's adjusted sales.

Consolidated comp store sales were up 4% entirely driven by customer transactions. Pre tax profit margin of 11.5% was up 60 basis points versus last year's adjusted 10.9%. Gross margin was 30.6%, up 70 basis points versus last year's adjusted 29.9%. This increase was driven by strong mark on lower freight costs and 20 basis points from shrink favorability, partially offset by higher supply chain investments. Regarding shrink, we saw favorability across all our divisions.

I want to take a moment to acknowledge the great collaboration and tremendous efforts of our associates who worked extremely hard on our initiatives throughout the year. SG and A was 19.4%, up 10 basis points versus last year's 19.3%. This was due to incremental store wage and payroll costs. Net interest income was neutral to the full year pre tax profit margin versus last year. All this led to a full year earnings per share of $4.26 up 13% versus last year's $3.76 Ernie will talk about our full year divisional highlights in a moment.

Moving to inventory. Balance sheet inventory was up 8% and inventory on a per store basis was up 1%. We feel great about our inventory levels and the outstanding availability we're seeing in the marketplace. We are well positioned to flow fresh assortments to our stores and online this spring. I'll finish with our liquidity and shareholder distributions.

For the full year, we generated $6,100,000,000 in operating cash flow and ended the year with $5,300,000,000 in cash. In fiscal 'twenty five, we returned $4,100,000,000 to shareholders through our buyback and dividend programs. Now, I'll turn it back to Ernie.

Thanks, John. I will pick it up with some full year divisional highlights. I am extremely pleased with the consistency of our sales performance across our divisions. Each business delivered comp store sales growth of 4% or above and importantly the sales were entirely driven by an increase in customer transactions. We believe this highlights the strength of our value proposition, our ability to gain market share and the power of our wide customer demographic.

At Marmaxx, overall sales for the full year exceeded $34,000,000,000 and comp store sales increased 4%. Marmaxx's apparel and home categories both saw comp sales increases. Additionally, comp store sales increased across all of Marmax's regions and income demographics. At Sierra, which is reported with Marmax, we were very pleased with their strong performance for the year. As to profitability, full year segment profit margin increased to a strong 14.1%.

With more than 2,500 total TJ Maxx and Marshall stores today, we still see plenty of opportunities to open new stores, attract more shoppers and further grow our sales. At HomeGoods, annual sales grew to $9,400,000,000 and comp store sales increased 4%. During the year, we opened our one thousandth store for this division, a great milestone. We were very pleased to see this division's segment profit surpass $1,000,000,000 and see its margin return to double digit levels at 10.9%. We are by far the largest off price home fashions retailer in The United States and we continue to see plenty of opportunities to capture additional market share with both our HomeGoods and HomeSense banners.

At TJX Canada, full year sales increased to $5,200,000,000 and comp store sales were up 5%. It was great to see consistent performance at all three of our Canadian retail banners, which each delivered similar comp store sales increases. Segment profit margin on a constant currency basis was 13.5%. As Canada's leading off price apparel and home fashions retailer, we believe our winners, Marshalls and HomeSense banners are all on track for continued successful growth. At TJX International, full year sales exceeded $7,000,000,000 and comp store sales increased 4% with strength in both Europe and Australia.

As to profitability, I am very pleased with this division's improvement in 2024. Segment profit margin on a constant currency basis was 5.8%. In Europe, we continue to grow our footprint in our existing countries and announced our plans to open our first stores in Spain in calendar twenty twenty six. In Australia, comp store sales growth was outstanding and we continue to expand the reach of our TK Maxx banner across the country. Long term, we are confident that we have opportunities to capture additional market share in each country that we operate in.

As to e commerce, overall sales increased and we added new categories and brands to our assortment across our sites to further enhance our online treasure hunt shopping experience. Okay, moving on, I'd like to highlight the key differentiators of our business that give us great confidence in our continued successful growth around the world for many years to come. First is our value leadership in The United States, Canada, Europe and Australia. We believe that our relentless focus on value every day through a combination of brand, fashion, price and quality will continue to resonate with shoppers. Second is our very wide demographic.

We want to sell every one and believe our offerings across good, better and best brands appeal to shoppers across most income and age demographics. Third, we believe we have one of the most flexible business models in retail. This allows us to buy close to need and adjust our selections as macro trends and consumer preferences change. Next is our differentiated treasure hunt shopping experience driven by our rapidly changing assortment. Our stores receive multiple deliveries a week of fresh branded merchandise to surprise and excite our customers.

We believe this can inspire shoppers to visit us more frequently to see what's new. Beth is our world class buying organization. I believe the depth of experience among our 1,300 plus buyers around the world is unmatched and that we have the best vendor relationships in retail. Our merchants source from an ever changing universe of over 21,000 vendors and from more than 100 countries. Further, we continue to see a significant opportunity to grow our global store base.

We are increasing our long term store potential to a total of 7,000 stores or over 1,900 more stores in just our existing and announced geographies. This now reflects the long term potential for HomeGoods to expand to 1,800 stores, Sierra to expand to three twenty five stores and our base in Spain to grow to 100 stores. In addition to our future store growth opportunities, I want to reiterate my excitement for our newly formed joint venture with Grupo Laxo in Mexico and our recent investment in Brands four Less in The Middle East. We see both of these as a great way to participate in the growth of off price in different areas of the world. Lastly, I am so proud of our culture which I am convinced is a key component of our success.

We continue to invest in teaching and training to develop the next generation of TJX leaders. Turning to corporate responsibility, we are excited about the progress we have made over many years and the work we have underway. On our conference calls over the past year, I've shared updates on how we support our associates and communities, our work to mitigate our impact

environment, and our commitment to operating ethically. Today, I'd like to share more about some of the remarkable efforts our TJX Foundations and associates made this past year to have an impact on the communities where we live and work. In addition to the support I mentioned earlier for people affected by the California wildfires in 2024, we also helped with the relief efforts for those affected by hurricanes in the Southeastern United States and flooding in Austria and Poland. Further, we supported more than 2,500 non profit organizations globally through our TJX Foundations. Associates across the globe play an important part in this meaningful work by volunteering, running donation campaigns in our stores, participating in our associate nominated grants program and more.

These are just some of the examples of work our teams are doing in our communities and we invite you to visit tjx.com to learn more. Before I close, I want to emphasize that our primary focus remains our value gap versus traditional retailers. I am very confident that the key strengths and flexibility of our business will allow us to navigate through the current China tariff environment. Just as we have successfully navigated through many other types of retail environments in our nearly fifty year history. In closing, we feel great about our strong performance in 2024.

We are confident in our plans for the year and as always we will strive to beat them. Longer term, we remain laser focused on growing our business and are convinced that we can continue to increase our market share in The United States and internationally. When I look at our growth opportunities ahead, the globalness of our business, our deep talent base, our wide customer base and the consumers continue to desire for value, I am very excited about the future of TJX. Now I'll turn the call back to John to cover our full year and first quarter guidance, and then we'll open it up for questions. John?

Thanks again, Ernie. I'll start with our full year fiscal twenty twenty six guidance. We're planning overall comp store sales growth of 2% to 3%. Starting in fiscal twenty twenty six, our comp store sales will include e commerce sales, which as a reminder are a small piece of our total business. We do not expect e commerce to have a material impact in our comp sales growth.

For the full year, we expect consolidated sales to be in the range of $58,100,000,000 to $58,600,000,000 up 3% to 4%. We expect favorable foreign exchange rates to have a 1% negative impact to consolidated sales growth. We're planning full year pre tax profit margin to be in the range of 11.3% to 11.4%, down 10 to 20 basis points versus last year's 11.5%. This guidance assumes a 20 basis point negative impact due to the unfavorable foreign exchange rates and transactional FX. Moving to our full year gross margin, we expect it to be in the range of 30.4% to 30.5%.

This would be down 10 to 20 basis points versus last year's 30.6 due to unfavorable transactional foreign exchange and inventory hedge. We're also planning for a slight improvement in shrink. We are expecting full year SG and A to be 19.3%, ten basis points favorable to last year's 19.4% driven by a benefit from the annualization of last year's higher incentive compensation accruals. We're planning net interest income of $98,000,000 which we expect to delever fiscal twenty twenty six pretax profit margin by 20 basis points. We're currently assuming a full year tax rate of 25.1% and a weighted average share count of approximately 1,130,000,000.00 shares.

As a result of these assumptions, we're expecting full year diluted earnings per share to be in the range of $4.34 to $4.43 up 2% to 4% versus last year's $4.26 This EPS guidance assumes a 3% negative impact to EPS growth due to unfavorable translational and transactional foreign exchange. Lastly, our fiscal twenty twenty six guidance assumes a small negative impact in the first half of the year from the current China tariffs on merchandise that we were committed to when these tariffs went into place. We have a great team, we have seen tariffs before and we are confident we can navigate our way through the current China tariff environment on our future buys. Moving to first quarter, we expect overall comp store sales to increase 2% to 3%. While weather was not favorable to the start of the quarter, we have been pleased with what we've seen recently as weather has normalized.

We expect consolidated sales to be in the range of $12,800,000,000 to $12,900,000,000 pre tax profit margin to be in the range of 10% to 10.1% down 100 to 110 basis points versus last year's 11.1% gross margin to be in the range of 29.8 to 29.9% which will be down 10 to 20 basis points versus last year's 30%. This is primarily due to unfavorable inventory hedges. SG and A to be 20%, up 80 basis points versus last year's 19.2%. This is primarily due to incremental store wage and payroll costs and the lapping of a one time benefit last year. Net interest income of $27,000,000 which we expect will deliver our year over year pre tax profit margin by 20 basis points.

Tax rate of 23.2 and a weighted average share count of approximately 1,130,000,000.00 shares. As a result of these assumptions, we're expecting first quarter diluted earnings per share to be in the range of $0.87 to $0.89 versus last year's diluted earnings per share of $0.93 I want to mention that there are several factors causing our first quarter pre tax profit margin and earnings per share to be planned lower than the remainder of the year. This includes a benefit from lower incentive compensation accruals planned in the last nine months of fiscal 'twenty six, the lapping of a benefit from a reserve release in the first quarter of last year and the expected timing of certain expenses. Importantly, this first quarter guidance implies that the last nine months of the year we expect pre tax profit margin to be flat to up 10 basis points and earnings per share to be up 4% to 6% versus last year. Moving to our fiscal twenty twenty six capital plans, we expect capital expenditures to be in the range of $2,100,000,000 to $2,200,000,000 This includes opening new stores, remodels, relocations as well as investments in our distribution network and infrastructure to support our growth.

For new stores, we plan to add about 130 net new stores, which will bring our year end total to over 5,200 stores. This would represent a store growth of about 3%. In The U. S, our plans call for us to add about 40 net new stores at Maramax, thirty stores at HomeGoods including nine HomeSense stores. At Sierra, we plan to add about 20 stores.

In Canada, we plan to add 12 stores and at TJX International, we plan to add 22 net stores in Europe and six net stores in Australia. Lastly, we also plan to remodel about 500 stores and relocate approximately 40 stores in fiscal twenty twenty six. As to our fiscal twenty twenty six cash distribution plans, we remain committed to returning cash to shareholders. As we outlined in today's press release, we expect our Board will increase our quarterly dividend by 13% to $0.425 per share. Additionally, in fiscal 'twenty six, we currently expect to buy back $2,000,000,000 to $2,500,000,000 of TJX stock.

In closing, I want to emphasize that we are in an excellent position both operationally and financially to take advantage of the opportunities we see to further grow our business while simultaneously returning significant cash to our shareholders. Now we're happy to take your questions. As a reminder, please limit your questions to one per person so we can answer as many questions as we can. Thanks. And now we'll open it up to questions.

Thank you. We will now begin the question and answer session. Our first question comes from Paul Lewis.

Hey, thanks guys. I'm curious if you can talk about what drove the stronger performance in Canada and international, if there's anything that changed in the macro that you think worked in your favor or was it simply better execution and also curious if you expect those businesses to continue to outperform this year?

Sure, Paul. Yes, obviously very pleased with both Europe and Canada. And common denominator with both of them was the way we flowed. First of all, you are in a gift giving time period in Q4 and you know we've typically done well in Q4. These two divisions specifically executed a flow plan in terms of how late they shipped freshness in prior to Christmas that it was extremely beneficial to their pre Christmas, the ten days before Christmas time period and this applies to both Europe and to Canada.

And then even the post Christmas business in both was exceptionally strong. So I give them a lot of credit on that as well as what they did in addition to going after specific gift categories, which I think was a big improvement in owning those in more depth versus the prior year. It was the balance of good, better, best across the board in Europe and in Canada as well. They also both had healthy home businesses, which helped their toll because as you know home spikes in Q4 and we have certain categories there that are great gift gaming categories. So I think there was a bit of a tactical execution benefit from the way they flowed and then a mix advantage in both.

By the way, it applied to both of them. Thanks for the question. We were very pleased with both of those divisions.

Yes. And Ernie, you expect them to continue to outperform? And then I guess on a related note Yes.

Paul, yes. We've seen both of them continuing to very happy with way they've been performing. And they both have really some seasoned management across those areas that gives me a lot of faith between our over there they call it merchandise, between our planning and allocation area as well as all our head merchants, we have a lot of seasoning there and people that have gone to some of the new key roles starting about two years ago, I think is going to set them up I think for strong execution over the next year.

Our next question comes from Lorraine Hutchinson.

Thanks. Good morning. Good morning. I wanted to ask about customer behavior on both ends of the spectrum. Are you seeing trade down at the higher end?

And then at the lower end of the assortment, how are customers reacting to some of the sharper price value offerings?

Yes. So it's hard for us to really measure on that because part of our success and again this was an extremely pleasing quarter for us to have every division running a four or better. When you have Canada at a 10. By the way, the other thing to remember is we were up against a good quarter the year before in Q4. So it becomes tough to measure on the good, better, best, so to speak, or the demographics on income because we were pretty much performing at every level across every banner that we have.

did see when we look at our and again, this is where stores are, the store performance in different demographic areas. We saw nice increases in both our below 100 and above 100 income demographic areas.

And I think, Lorraine, part of the evening off that happens is with the and you've seen a lot of the write ups. So you have I don't know consumer confidence is down a little and you have store closures in different pockets of retails across The U. S, Canada as well by the way, Europe as well. And when you have so you can the reason it's tough with all that noise is because obviously in some of those cases we're picking up the market share. Home would be one of the more obvious ones where either business that had a home business as part of it or home only have closed.

And so there's almost not a demographic issue there, more of a category market share gain, which has been more what John and I would see in the divisions. As we have gained market share not where it's easier to measure is not by income demographic, just across all the income demographics, but in certain categories we have outpaced.

Our next question comes from Matthew Boss.

Great. Thanks and congrats on another nice quarter.

So two part question. First, on the continued strength in transactions across divisions that you saw in the fourth quarter, Maybe could you elaborate on new customer acquisition trends? And just how, Ernie, would you rate the breadth of your product assortment and value proposition into the spring? And maybe with that, just near term, could you maybe elaborate on the more recent trends you've seen in the business? Or is it fair to say that you haven't really seen any change in underlying business momentum if we parse through the impact of weather?

Okay. Yes, Matt, great questions. I was waiting for you to throw in the part about the weather. So John, do you want to talk to transactions and then I'll talk to the breadth of product and the positioning? Yes.

So we've seen again, we continue to see strong transaction growth and we are seeing us attracting more customers to our stores. And when we look at the age demographic, they tend to skew a little bit more towards that eighteen to thirty four age range is what we've seen consistently. So we're quite pleased to see the sales growth based on again more customers coming to our stores,

which ties in I think Matt with the other part of your question about the product because obviously we're conscious about continually expanding our vendor base, our category of items base. Probably HomeGoods is one of the I would say it would be the epitome of that in terms of how we are always opening new vendors and new categories. We do it in every division. They just jump out where it's a little more obvious when you walk the store because you'll find items and categories that are now expanded versus a week before in a very dramatic fashion. So I would say our breadth of product as we go into spring is, I would say, kicked up a notch from even last year.

Again, that's part of our success this past fourth quarter and in the last couple of years is to continually try to bring in new vendors and new product categories while not alienating customers or category purchases on the other side of it, which is one reason we're always talking. I'm always talking about trying to sell as many people as possible. That was in our script. That's what we always talked to, you got. I know we've talked many times about it.

So our breadth, we line up our plans for spring and in very wide product breadth, vendor breadth. Having said that, when you start to get other than the weather issue, which John mentioned, when the weather was in the areas where it was normal weather, we were pleased with how we were performing. It's just we had those pockets of weather that hit us on those spots. But again, we're feeling very good about the normal weather pattern areas and where we'll head in the future. So I don't know if I did I answer that about the product breadth?

Yes, you did. You did. That ticked up a notch relative to a year ago.

Yes. I have a direct quote on that. That's very good.

Our next question comes from Brooke Roach.

Good morning and thank you for taking our question. I was hoping we could elaborate on your expectations for continued expansion in merchandise margins. Can you contextualize what you're embedding in your outlook for merch margin expansion as you contemplate mark on versus tariffs? And then John, on gross margins, can you speak a little bit more about your expectations for shrink for the year?

So let me so Brooke, I'll start off with the our approach on the mark on our merchandise margin, touch on tariffs briefly and then John can pick up on the actual components, financial components. I thought we would talk about this to really try to keep it crystal clear on our approach how this works. First of all, on the tariff situation, it's been a little gray. There's a short term keep in mind that the direct imports for China for us are an extremely small percentage of our business. And so, although there could be like in the short term, a little bit of a perhaps a little bit of a cost associated there, over the medium and long term, that really doesn't become the issue because of the way we approach our buying.

So to give you an example, I guess the silver lining is with consumer confidence down and a bit of a rocky environment out there, and the way our buyers operate, which is the buyers go out and they really assess at the retail level what we can retail product for and then they work it backwards to what the cost should be and they really don't their strategy is not to factor in tariffs or any other cost that actually can play into the picture here. The way they approach is they're going to look at what's the out the door retail on the like item and we need the gap in retail between us and their out the door that's going to provide the amazing value for our consumer. And from there they work on the cost they can pay and it's really not up to them to have to worry about what the vendor is getting caught up with in terms of tariff or inflation or other costs. Because remember, we've been to the movie before recently a few years ago with extreme inflation and we navigated right through that just as we will on this. It's a different headline, it's just the same approach.

So whether there's tariffs, no tariffs, our buyers really their focus is on buying the goods, determining the cost based off the retail we can put the goods out at. So because of the environment where there is a lot of I think consumer confidence stores closing, etcetera, I am thinking there is more availability out there over the next six months, even more than there has been, which is going to create more buying opportunities for our teams. So back to your margin quick, that at a high level, I think, plays into our ability to look at margin opportunities. I'll give you another thing is, we mentioned this briefly, is the wide demographic, which I've talked about a couple of times. That also plays into our ability to be more flexible.

So if our buyers or merchants don't see something in one vendor or one good, better, best range, they can always be more flexible in terms of the way they handle the market. They can move from a good item to a better item if that's where the better buy is. And I think we have that advantage versus most of our competition doesn't have that flexibility. So again, great question. I'm excited about this.

I'm excited about the sales and margin opportunity in this environment because this is pretty much textbook situation coming up here. Right.

And then Brooke to answer your question on the shrink, we're very pleased with where our shrink rates came in this year. We still have our shrink committee. We're still staying very focused on this. So we do have a small improvement baked into our plan this year and it's really centered around the annualization of the initiatives that from last year. But we're also at this point analyzing data on the shrink results and we will use that data to lean into some of the things that worked last year.

So we're doing a number of things. Again, the overarching strategy is to continue to maintain a great shopping environment for the customers, a safe shopping environment for our associates and customers as well.

Our next question comes from Michael Binetti.

Hey guys, congrats on an awesome quarter. Very happy to see it.

John, I ask you this a lot, but flow through for the year on a 2.3 comp is 10 basis points. If we exclude the currency. I'm guessing that's with less of the lingering contribution from some of those snapback COVID areas like freight and shrink and even your market a little bit for tariff this year. Is 4% still the long term leverage point? Is there anything changing there?

And then I just want I'm just curious on real estate availability in The U. S. When we speak to some real estate brokers recently, they said new development is almost nothing. So there's a lot of competition for boxes from the retailers that go bankrupt. I'm curious if you see any tightness in the availability of real estate in The U.

S, either for getting your boxes in or any reason to think that there could be some rent inflation in years ahead if those dynamics hold? Thanks.

Yes. So on the flow through, yes, we the model still stands where on a three to four comp with no outsized expense increases, we would expect to be flat to up 10 basis points. But again, that's an overarching model. If we see years where we have an opportunity to do better than that, we certainly will bake that into our plans. As far as the real estate availability, so we do see a lot of availability going forward.

As we've talked about in the past, we do see an opportunity to expand into some more rural areas where the department store of the area closes and we can fill that void in those areas. Also you're still seeing large box closures that we have the opportunity to either go into a new area or to relocate a store to a better shopping area. So again, we still see opportunities and that's kind of reflected in the increase to our sales or our store potential.

Thanks a lot guys. Appreciate it. Thanks.

Hey, great quarter. Ernie, can you talk about the 5% comp in the context of category performance across apparel, home, footwear, accessories and gifting? And then when we look ahead to 2026, how you're planning those businesses across those categories? And then for John, on the shrink rate improvement, can you just remind us where your shrink or cool levels actually are today relative to 2019, so we can get a sense for how much is left to continue to improve on that front? Thanks.

Yes. Chuck, obviously, I can't give specifics on some of these categories, but directionally, I can talk to well, we were with that strong comp, we were up in apparel and home, but I would say the home and some of our accessory businesses excel were better stronger than apparel and that would be a similar way that we're looking for those businesses to perform in FY '20 '20 '6. If you start getting into some of the smaller category breakouts, that's the information. We just don't give those specifics out there. But directionally, obviously, when you run a five, you have to have pretty decent apparel business also, otherwise you can't offset it because it's still a significant percentage of our business.

The business I continue to be even more bullish on is our home business in total. As you know, it's kind of a third plus of TJX. And if you look at the domestically here in The United States and you look at how HomeGoods has performed versus the industry, I think that's a great sign. And if some of the other new housing starts and interest rates change to be more favorable, I look at how our teams there are performing now and think that could even be more potential upside for us. So that's why we're very bullish on home.

We're the only ones that do it the way we do it. And that team specifically, what's neat on the way our home business is done, which not many people think about this, there's been discussion on tariffs at China, etcetera. Well, we actually our priority on our home business is to do goods out of Europe because that is a differentiator for us and it creates an umbrella of fashion and brand and quality that other home retailers don't do. So one reason it performed extremely well in Q4 in our home business and that whole Europe piece of differentiation I think is going to help propel us going forward. And by the way, Europe and some of our other accessories categories that I was talking about where we performed better than the store, I think we utilize it there also as an offensive sales driver and customers love that piece of our mix.

So that is a highlight I can talk about and we have that plan to be big going forward. John? Yes.

So Chuck, on your question about the shrink rate, we don't publicly disclose our shrink rate. But going forward, we still think we have some opportunity to continue to improve our shrink rates.

TJX (TJX) Q4 2025 Earnings Call Transcript

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