The TJX Cos. Inc. could grow its store base to more than 6,100 units over the long term.
That’s according to president and chief executive officer Ernie Herrman in a conference call to Wall Street analysts Tuesday morning after the company reported first-quarter earnings results.
During the first quarter, the retailer opened 71 stores, and for the quarter ended May 5 operated a total of 4,141.
Herrman said of the company’s global store base that TJX sees long-term potential to “grow our four major divisions to a total of 6,100 stores, with just our current chains and our current countries alone.”
While the treasure hunt shopping experience is allowing the company to grow market share, other factors are also giving it confidence in its growth potential.
Herrman said TJX has been emphasizing its loyalty programs across the U.S., Canada and the U.K., and “we are pleased with the strong growth and the number of customers joining our programs.” Further, the ceo noted that the company “has been disproportionately attractive to new Millennial and Gen Z customers. This bodes very well for the future of TJX.”
He emphasized two other key factors that are helping the retailer’s growth story. One is the “ability to touch and feel the merchandise and the inspiration that the shopping experience elicits leads to instant gratification….We also located our stores in convenient, easy to access locations. Our flexible store format and rapidly changing assortments allow us to quickly react to changing consumer trends. This helps us ensure that our stores are fresh and there is always something to surprise and excite our customers,” Herrman said.
The other confidence building the ceo cited is the company’s ability to continue to have access to quality branded merchandise. “Availability of inventory continues to be terrific, and we are thrilled with what we are seeing in the global marketplace from both existing and new vendors,” the ceo said.
Herrman spoke about what TJX is doing to make it “attractive for vendors to do business with us,” which includes establishing long-term mutually beneficial relationships and the fact that the company has more than 4,000 stores across nine countries in addition to its online sites.
“In an environment where other retailers are closing stores, we can offer vendors an excellent way to grow their business and access new markets,” Herrman said. He also noted the company’s flexibility in its dealings and offer vendors an efficient way to clear merchandise: “We can purchase an extremely wide assortment of items, styles and sizes, as well as quantities ranging from small to very large.”
According to Herrman, “We are convinced that our outstanding values, great brands and treasure hunt shopping experience will allow us to continue gaining market share around the world across our four major divisions.”
The ceo added that the “second quarter is off to a strong start, and we see many opportunities to drive consumers to our retail banners. We see a marketplace that is loaded with quality branded merchandise.”
Net income for the quarter rose 33.6 percent to $716.4 million, or $1.13 a diluted share, on a net sales gain of 11.7 percent to $8.69 billion. The company said consolidated comparable-store sales rose 3 percent for the quarter.
The company’s four business segments are Marmaxx, HomeGoods, TJX Canada and TJX International (Europe and Australia).
TJX updated its outlook for the full fiscal year, raising adjusted diluted EPS to between $4.04 and $4.10, or up 2 cents at the high-end of guidance.
Shares of TJX on Tuesday closed up 3.3 percent to $87.51 in Big Board trading.
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