TJX Cos.: With home shining bright, company will expand Sierra Trading Post
February 26, 2014,
Framingham, Mass. - TJX Cos. today touted the performance of its HomeGoods and Marmaxx nameplates for another quarter and full fiscal year, pointing to particular growth in home-related businesses.
The results are fueling a new effort to expand the company's presence and home offering in its outdoor lifestyle brand Sierra Trading Post (STP), a four-unit and internet retailer that TJX acquired in late 2012.
"We are very excited about [building on] the whole outdoor space, and we think of Sierra Trading like a kind of HomeGoods for the outdoors," ceo Carol Meyrowitz.
explained during TJX Cos.'s earnings call this morning. "We are just starting to open our new stores for this new brand, and we hope it will be a big chain in the future."
She added that the new STP prototype units will be very different from the existing stores. "It will be pretty interesting and will have a unique look and value, value, value - I can't say that enough -- in every category. It will carry an expansive assortment and will be an exciting store."
For the fourth quarter, ended Feb. 1, TJX Cos.'s net income dropped 3.7% to $582 million, or $0.81 per share.
Net sales in the 13 weeks inched up 1% to $7.8 billion, and consolidated comparable store sales grew 3%, driven by an increase in ticket.
November and December sales as "well above plan," said Meyrowitz. However, like most of its peers, TJX took a hit in January due to heavy winter weather, which Meyrowitz said "kept shoppers home and dampened sales."
As a result, "we took aggressive markdowns, particularly in apparel, to clear the product, and start the new fiscal year with clean inventories," she added.
Less affected were Marmaxx and HomeGoods, "which have less weather-sensitive categories," allowing them to perform better in bitter temperatures.
The company has set new growth goals for its different brands. They include:
- Marmaxx growing 50% to 3,000 stores, reflecting 400 more units than earlier estimated;
- HomeGoods with potentially more than originally planned 825 stores, "which could be conservative," she said, considering the chain's "terrific performance" of 7% comps in 2013 over a 7% comp gain in the prior year plus its sale doubling over the past five years;
- TJX Canada expanding long-term to 450 stores, representing a 30% growth and the potential to grow Canada's Marshalls chain to 100 stores because of recent business accelerations.
For the 52-week fiscal year, TJX Cos.'s net income jumped 12.1 % to $2.1 billion, or $2.94 per share. Net sales for the year grew 6% to $27.4, and comp store sales increased 3% on a 52-week comparable basis.
Looking ahead, Meyrowitz continued, TJX Cos. has "many exciting initiatives planned this year...As we approach $30 billion in annual sales, we continue to see tremendous global growth potential for TJX...[and] we continue on the road to becoming a $40 billion company and beyond."
The company is optimistic about its business in 2014, given the "marketplace [being] absolutely loaded with opportunity to buy branded merchandise. We have a lot more open-to-buy now than we did a year ago...and we see a huge potential to gain consumer market share," Meyrowitz said.
While TJX Cos. said it have grown its customer base "significantly" in recent years, "our penetration levels remain below most major department stores," she continued.
To capture more market share, the company has a more aggressive advertising effort, "with more up our sleeve" in the works for this year. Additionally, 250 stores across the company are slated for remodeling. Included in this plan is a new prototype for Marshalls in the U.S.
Internationally, the company is actively expanding its global sourcing operation "to be closer to the product" via its 16,000-plus vendors worldwide.
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