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The TJX Cos. Inc.’s goal to open more stores worldwide will be helped by its planned foray into Spain.
“We’ve been looking at the Spanish market for quite some time, and are confident that the timing is right,” TJX president and CEO Ernie L. Herrman said Wednesday during the company’s conference call on third quarter earnings results. He added that the company has a “strong understanding of the marketplace and the consumer.”
In addition to a small field office in Spain, Herrman said the retailer will leverage its existing European infrastructure and organization to effectively serve the local market. “We expect our first stores to open in early 2026 and long-term, we see the potential to open more than 100 stores in Spain,” he noted.
TJX has been busy with initiatives that help it gain off-price exposure in new markets. In June, TJX signed a joint venture (JV) agreement with Grupo Axo, S.A.P.I. de C.V., an operator of global brands in Mexico and South America that includes both full- and off-price formats. The American off-pricer owns 49 percent of JV, with Axo owning the 51 percent balance. And in August, TJX disclosed that it invested $360 million for a 35 percent, non-controlling stake in Dubai-based Brands for Less (BFL), which operates the region’s only major off-price apparel, toys and home fashions retailer. The 100-plus stores it operates are primarily in the United Arab Emirates and Saudi Arabia, as well as an e-commerce platform.
“We are always looking for ways to increase shareholder value. And we see these two investments as a good use of cash with an attractive growth and return profile over the long-term,” Herrman told investors. “All of this gives me confidence that even as a $50 billion-plus global retailer, significant opportunities remain to capture additional market share around the world going forward.”
While tariffs are top of mind for many, Herrman said the retailer has dealt with the issue before, emphasizing that the business model priority is on maintaining the value gap on goods relative to the out-the-door retail at its competitors.
“While we won’t speculate on exactly what will happen with certain items or certain categories, if it does happen, we are set up to ensure that we maintain our value gap between us and the out-the-door at no matter what those categories are that could get hit with tariffs,” Herrman said. ” Everything is relative. We will make sure our values are proportionately below them as they always have been. Again, we have the flexibility that we’re not buying so far early and out.”
He said the other opportunity is that it could have other manufacturers or retailers that do more of their own direct imports. While direct imports are still a very small component of the off-pricer’s business, Herrman said the company began diversifying out of China years ago. Moreover, the bulk of its inventory is bought from brands.
“We don’t even have visibility into where those goods are from nor do we actually want to get involved in that. It’s back to the value gap that we retail those goods out relative to competition,” Herrman said. “So if a brand were to get hit with increased tariff on a category, and that brand had to raise their price, then that price gets carried on to another retailer. Could that price on that one [stock-keeping unit for us be up a little? It might, but it will never be at any issue with the value gap that we have relative to the competition.”
As for any benefits that might arise that tariffs could bring in terms of buying opportunities, the CEO said vendors could bring in goods early, which is what happened the last time. “That could create actually even additional availability of goods at advantageous prices for us because we can take advantage of that opportunistically. And that’s as likely a scenario as anything,” Herrman said.
He also spoke about customer demographics and said a growing segment is the shopper between ages 18 to 34. Herrman also said that looking at trends from a year ago to now, “the health of our home business makes me continue to be very bullish on where we’re headed in home. And I don’t know if that’s a macro trend. I know it probably is inconsistent when you look at the results in the home industry.” He suggested that customers are more open to looking for fun, eclectic fashion home merchandise, which appears to be picking up over the last few quarters.
Herrman also said the 3 percent comp store sales growth in the quarter was at the high end of plan, and that the fourth quarter is off to a great start.
“We continue to see outstanding availability of goods across a wide range of brands, which gives us great confidence in flowing fresh, exciting assortments to our stores and online this holiday season and beyond,” the CEO said.
For holiday, the off-pricer is focused on having gift offerings in every department, a move that Herrman said positions the stores as an “appealing one-stop shopping destination for consumers to buy for everyone on their list. Further, after the holiday season, we’ll continue our focus on being a year-round gifting destination.”
He said the availability of merchandise allows the company to flow fresh merchandise to its stores and online multiple times a week, a strategy that ensures shoppers see something new each time they visit. ” In addition, we feel great about our plans to flex our stores after the holidays to the categories and trends believe consumers will be looking for to start the new year.”
For the three months ended Nov. 2, net income rose 8.9 percent to nearly $1.3 billion, or $1.14 a diluted share, from net income of $1.19 billion, or $1.03, in the year-ago quarter. Net sales were up 6 percent to $14.06 billion from $13.27 billion, while consolidated comparable store sales increased 3 percent. Wall Street was expecting adjusted diluted earnings per share (EPS) of $1.10 on revenue of $13.95 billion.
Comparable store sales at Marmaxx in the U.S.—TJ Maxx, Marshalls and Sierra stores—rose 2 percent in the quarter, while HomeGoods in the U.S. rose 3 percent. TJX Canada comps rose 2 percent, while TJX International for Europe and Australia—operating the TK Maxx and Homesense banners—increased 7 percent. By division, Marmaxx net sales rose 4 percent to $8.44 billion, impacted by store closures due to hurricanes Helene and Milton. Apparel and home sales at Marmaxx saw comp sales increases in the quarter. HomeGoods gained 7 percent to $2.36 billion, TJX Canada was up 5 percent to $1.38 billion and TJX International spiked 16 percent to $1.89 billion.
The company opened 56 stores in the quarter, bringing the store network to 5,057. Herrman said in May that the retailer has the potential to expand its store footprint by another 1,300-plus doors.
For the nine months, net income rose 12.9 percent to $3.47 billion, or $3.03 a diluted share, from $3.07 billion, or $2.65, in the same year-ago period. Net sales increased 5.8 percent to $40.01 billion from $37.81 billion on a 3 percent rise in consolidated comparable store sales.
The off-pricer raised its diluted EPS outlook for the full year Fiscal 2025 to the range of $4.15 to $4.17, up from a forecasted $4.09 to $4.13 in August when it posted second quarter results. The retailer reaffirmed consolidated comparable store sales in the range of up 3 percent.
For the fourth quarter, diluted EPS was guided to the range of $1.12 to $1.14, with consolidated comparable store sales at up 2 percent to 3 percent.
