FRAMINGHAM, Mass. — Coming off another strong quarter, which saw improved comparable store sales driven by a rise in customer transactions, Ernie Herrman, CEO and president of TJX Cos., feels confident the company’s “flexible, off-price business model” is working.
Speaking to opportunities in the second half of the year during the company’s earnings call, he said consumers are still seeking value. “I’m confident the value proposition will continue to resonate with shoppers,” said Herrman.
Both apparel and home have performed well for TJX, and its brands are gaining market share, he said. “We’ve seen similar trends in MarMaxx (Marshalls and TJ Maxx) and HomeGoods (HomeGoods and Homesense),” he said, with the difference being slower movement in the big-ticket furniture items.
HomeGoods and Homesense are “highly differentiated” from others in their space, added John Klinger, senior executive vice president and CFO, and the company continues to see opportunities to improve market share.
Availability of merchandise to fit TJX’s good/better/best merchandising format is “outstanding” right now, said Herrman, noting “we have access to more inventory than we can buy.” In fact, he said, availability is so abundant that buyers are leaving room to make opportunistic buys as they head into the end of the year. “It’s off the charts more than we thought,” he said.
TJX opened its 5,000th store in the second quarter and sees store growth as another opportunity over the long term. The plan is to grow the store base to 6,300 stores under its current nameplates, said Herrman.
The company also announced that it has invested in Dubai-based Brands for Less, taking a 35% ownership stake in the off-priced branded seller of home fashions, apparel and toys, which operates more than 100 stores primarily in the United Arab Emirates and Saudi Arabia. The transaction, which includes an investment of $360 million, is expected to close later this year.
Hermann said the deal represents an additional chance to expand TJX’s reach by investing in an existing retailer.