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The TJX Companies: Company Description
The TJX Companies is a US-based off-price retailer of apparel and home fashion. The company was founded in 1956 and is headquartered in Framingham, Massachusetts. TJX operates through four segments: HomeGoods (US), Marmaxx (US), TJX Canada and TJX International. The company operates stores under multiple banners, including HomeGoods, HomeSense, Marshalls, Sierra Post, T.J. Maxx, TK Maxx and Winners—and operates e-commerce sites tjmaxx.com, tkmaxx.com and sierratradingpost.com.
The company’s strategy centers on opportunistic buying and varied merchandise sourcing, depending on market conditions and other factors. The company’s overall buying strategy includes more than 1,000 associates in 16 buying offices across 12 countries, who buy merchandise from more than 100 countries. TJX takes advantage of the opportunities to acquire merchandise at substantial discounts that regularly arise from the production and flow of inventory in the apparel and home fashion marketplace.
For the fiscal year ended February 1, 2020, the company operated a total of 4,529 stores in nine countries, including Australia, Austria, Canada, Germany, Ireland, Poland, the Netherlands, the UK and the US, and it had approximately 286,000 employees.
Figure 1. The TJX Companies: Company Profile
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Source: Company reports[/caption]
The TJX Companies has steadily built its physical store portfolio, from 3,395 total stores at the end of fiscal year 2015 to 4,529 stores at the end of fiscal year 2020—an increase of 1,134 stores. This is noteworthy in the current retail environment, as many stores are closing. The company reported on its third-quarter earnings call of fiscal year 2021 held on November 18, 2020 that it is still planning to proceed with store openings in 2021. Although a definitive number was not confirmed, management estimated that it will open at least 100 stores across all of its divisions,
TJX’s comparable store sales over the five fiscal years preceding fiscal year 2020, have been positive every year, as shown in Figure 2. For the third quarter of fiscal year 2020, the company reported that open-only comparable store sales were down 5% overall. By segment, Marmaxx was down 10%, TJX Canada down 7% and TJX International down 6%, while HomeGoods was up 15%.
Figure 3. The TJX Companies: Comparable Store Sales (YoY % Change; Left Axis) and Total Number of Stores (Right Axis), FY15–FY20
[caption id="attachment_121369" align="aligncenter" width="700"]
Source: Company reports[/caption]
In Figure 4, we highlight the most significant events over the past four years for The TJX Companies
Figure 4. Timeline of Significant Events for TJX, 2019–2020
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Source: Company reports
Key Events Overview Over the past five years, from fiscal year 2015 to 2020, The TJX Companies has grown its total revenue at a 7% CAGR. The shining star in its portfolio is HomeGoods, which grew at a 13% CAGR over the same period. The company’s Canada and International segments each grew by 7%, which is still remarkable. The company’s HomeGoods segment grew from $3.4 billion to $6.4 billion from fiscal year 2015 to 2020. In November 2020, the company announced plans to launch its HomeGoods business online in 2021, which it believes will help to further accelerate its growth and help to capture market share in the home goods market. Figure 2. TJX Annual Revenue by Segment, FY15–FY20 (USD Bil.) [caption id="attachment_121368" align="aligncenter" width="700"] Source: Company reports[/caption]
The TJX Companies has steadily built its physical store portfolio, from 3,395 total stores at the end of fiscal year 2015 to 4,529 stores at the end of fiscal year 2020—an increase of 1,134 stores. This is noteworthy in the current retail environment, as many stores are closing. The company reported on its third-quarter earnings call of fiscal year 2021 held on November 18, 2020 that it is still planning to proceed with store openings in 2021. Although a definitive number was not confirmed, management estimated that it will open at least 100 stores across all of its divisions,
TJX’s comparable store sales over the five fiscal years preceding fiscal year 2020, have been positive every year, as shown in Figure 2. For the third quarter of fiscal year 2020, the company reported that open-only comparable store sales were down 5% overall. By segment, Marmaxx was down 10%, TJX Canada down 7% and TJX International down 6%, while HomeGoods was up 15%.
Figure 3. The TJX Companies: Comparable Store Sales (YoY % Change; Left Axis) and Total Number of Stores (Right Axis), FY15–FY20
[caption id="attachment_121369" align="aligncenter" width="700"] Source: Company reports[/caption]
In Figure 4, we highlight the most significant events over the past four years for The TJX Companies
Figure 4. Timeline of Significant Events for TJX, 2019–2020
[wpdatatable id=667]
Source: Company reports