TJX’s growth accelerates, benefiting from consumers’ flight to value

(Source: The TJX Companies)

Off-price apparel and home fashion retailer The TJX Companies has posted positive results on both the top and bottom lines for the fourth quarter and full fiscal year.

Net sales for the 14-week fourth quarter of FY24 were $16.4 billion, up 13 per cent versus the 13-week fourth quarter of FY23. Consolidated comparable store sales increased 5 per cent during the period.

For the 53-week fiscal year ended February 3, net sales rose 9 per cent to $54.2 billion versus the 52-week FY23. Consolidated comparable store sales were up 5 per cent.

Neil Saunders, MD of GlobalData, said the company continued to benefit from the flight to value which has seen consumers seek to maximize value for money as finances are under pressure. 

“The company’s various banners have cemented their position as places to maximize the bang shoppers get for their buck. This has resulted in both new customer acquisition and existing customers increasing their share of spending.”

Excluding the additional week of trading this year, which did flatter the numbers, TJX still ended FY23 on a strong note, Saunders said.

“While comparable growth has slowed a little since the last quarter, it has done so off the back of a much tougher prior-year figure, so the two-year growth rate has actually accelerated,” he added.

Sales of Marmaxx US grew 11.7 per cent for the year, while comparable store sales were up 5 per cent. This shows that the destination has become more important for holiday shopping than in previous years, Saunders said.

HomeGoods US’s sales rose 15.7 per cent on a total basis and 7 per cent in comparable terms. The brand is bucking trends and gaining market share as many other players in the category are in decline, the analyst commented.

Regarding the international business, sales rose 14.6 per cent with comparables up 3 per cent in Australia and Europe, and up 6 per cent in Canada.

“Although consumers are a little more constrained in Europe and spending less on discretionary items, TJX continued to generally outperform the market,” said Saunders.

The retailer ended the year with 4954 stores across nine countries, up by nearly 120 locations compared to last year.

For the first quarter of FY25, The TJX expects comparable store sales to be up 2 to 3 per cent. Full-year comparable store sales are also forecast to increase 2 to 3 per cent.

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