TJX Companies Discussed E-Commerce and Other Growth Plans
TJX Companies’ Strong Performance in Fiscal 3Q16
E-commerce growth plans
In the fiscal 3Q16 conference call, TJX Companies’ (TJX) president and chief executive officer, Carol Meyrowitz, discussed the company’s growth plans for e-commerce and global store potential. The company’s online sales currently represent just over 1% of its sales. The company is investing in its online infrastructure and plans to roll out e-commerce for additional retail brands in the future. Currently, TJX Companies’ online channels include tjmaxx.com and sierratradingpost.com in the US and tkmaxx.com in the United Kingdom.
Carol Meyrowitz, TJX Companies’ president and chief executive officer, stated that although its e-commerce business doesn’t produce the kind of operating income generated by its Marmaxx stores, it does help to bring in new customers. It also provides the convenience of online shopping. TJX Companies’ off-price rival Ross stores (ROST) lacks an online presence.
Capex plans
Based on previously issued guidance, TJX Companies expects capital expenditure of $975 million in fiscal 2016 ending January 30, 2016. The company expects to spend $487 million for its offices and distribution centers, including buying and merchandising systems and information systems. The company expects to spend $277 million for store renovations and $211 million for new stores.
Store growth plans
In the 3Q16 conference call, Meyrowitz stated that there is enormous potential for global store growth. The company sees the opportunity to grow its store count by more than 50% to almost 5,500 stores in the long term. This is the growth expectation that the company sees in the current markets alone, excluding the potential in Australia and other new markets such as the Netherlands. As of the end of 3Q16, TJX Companies had 3,594 stores, including 35 Trade Secret stores, acquired in October 2015. Trade Secret marked the company’s entry into the Australian market.
Nordstrom (JWN) plans to open its off-price Rack stores in Canada in fall 2017. The off-price store expansion plans of Macy’s (M) are currently restricted to the US market. TJX Companies, Nordstrom, and Macy’s together account for 0.6% of the holdings of the iShares Russell 1000 Growth ETF (IWF).
As mentioned in Part 5 of this series, TJX Companies opened its first store in Netherlands in 3Q16. The company now operates in nine countries on three continents.
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