TJX’s Sales and Earnings Growth Steady in a Mixed Retail Sector

A T.J. Maxx/Homegoods store in Costa Mesa, Calif., on May 23, 2022. John Fredricks/The Epoch Times

The TJX Companies Inc. continues to deliver steady sales growth in a mixed retail sector as shoppers hunt for deals in its stores.

This week, the leading off-price apparel and home fashion retailer reported net sales of $14.1 billion for the third quarter of fiscal year 2025, a 6 percent increase over the third quarter of fiscal year 2024. Same-store sales were up by 3 percent, while net income rose by 11 percent from the third quarter of fiscal year 2024.

The third quarter’s financial results closely mirror the second quarter’s results for fiscal year 2025, when the company reported net sales of $13.5 billion, up 6 percent from the second quarter of fiscal year 2024. In the second quarter of fiscal year 2025, comparable store sales were up 4 percent, while net income was up 13 percent from the second quarter of fiscal year 2024.

TJX Cos. steady sales and earnings growth comes at a time when retailers report mixed financial results. For instance, Costco and Walmart have been reporting solid sales growth, while Target has been reporting volatile sales growth.

Wall Street likes steady financial performance because it lowers the risk of owning shares of publicly traded companies. As a result, TJX’s shares have outperformed the broader market. Thus far this year, the company’s shares are up 29.41 percent compared to 24 percent of the benchmark S&P 500 Index, and they have gained 110.82 percent over the past five years, ahead of the 89.64 percent gains of the S&P 500.

The Framingham, Massachusetts-based retailer owes its steady performance to the simplicity of its business model, which differentiates it from other conventional retailers. Its value proposition includes brand-name and designer fashion merchandise offered at prices that range from 20 percent to 60 percent lower than those in regular department and specialty stores.

Then there’s the TJX management model. The company operates under several store names rather than a single name: Marshalls, HomeGoods, Winners, HomeSense, T.J. Maxx, and Sierra Trading Post.

The combination of a portfolio of brand-name products and deep sale discounts has allowed the company to reach a broad demographic customer base and avoid the strategic mistakes of other retailers, such as JCPenney, which ended in bankruptcy a few years ago.

Then there’s the company’s ability to hype customers’ expectations with new high-quality, brand-name, and designer merchandise offered at a discount. It arrives in its stores several times a week, driving traffic and same-store sales quarter after quarter.

“I am very pleased with our third-quarter results and the strong execution of our off-price business fundamentals by our teams,” Ernie Herrman, CEO and president of TJX, said in a statement following the release of the third-quarter financial results.

“Our comp store sales increase of 3 percent was at the high-end of our plan, and both pretax profit margin and earnings per share came in well above our expectations. Across the company, customer transactions drove our comp sales increases, which tells us that our values and treasure-hunt shopping experience are appealing to a wide range of customers. I want to specifically highlight our European team for their strong results, which drove the 7 percent comp increase at our TJX International division.”

Jon Alper, an asset protection expert, sees TJX’s solid sales and earnings growth as reflecting the strength of its off-price business model, which appeals to shoppers looking for value, quality, and affordability.

“By offering a constantly changing assortment of merchandise, they’ve mastered the art of creating excitement for consumers while maintaining loyalty through value-driven pricing,” he told The Epoch Times in an email.

Alper believes the company’s lean inventory strategy is a key factor in its ability to adapt quickly to shifts in consumer demand.

“This approach not only reduces risk but also allows TJX to take advantage of market opportunities as they arise,” he said. “Their global reach further strengthens their position, providing a balance between developed and emerging markets.”

Moreover, he sees the company’s emphasis on fostering vendor relationships and securing high-quality merchandise at competitive prices as essential in managing cost pressures and sustaining growth.

“In a challenging retail environment, TJX’s ability to deliver value without compromising on quality keeps them firmly positioned as a leader in the off-price sector,” Alper said.

Meanwhile, CEO Herrman looks forward to a solid fourth quarter, which includes the busiest shopping season of the year.

“With our above-plan profitability results in the third quarter, we are raising our full-year guidance for pretax profit margin and earnings per share,” he said.

“The fourth quarter is off to a strong start, and we are excited about our opportunities for the holiday selling season. In stores and online, we offer consumers an ever-changing and inspiring shopping destination for gifts at excellent value and feel confident that there will be something for everyone when they shop. Going forward, we continue to see great potential to successfully grow TJX around the globe well into the future.”