TJX Surprised by Weakness in Demand as Inflation Crimps Spending

Off-price apparel retailer TJX said Wednesday (Aug. 17) that demand for home-related items was weaker than expected as inflation dampened consumer spending, leading to a surprise 5% drop in same-store sales.

In the company’s Fiscal Year 2023 second-quarter earnings report, TJX President and CEO Ernie Herrman characterized the results as “lighter than we expected as we believe historically high inflation impacted consumer discretionary spending.”

Read more: TJX FY22 Optimism Dampened by Stock Price Drop

TJX President and CEO Ernie Herrman characterized the results as “lighter than we expected as we believe historically high inflation impacted consumer discretionary spending.”

Headquartered in Massachusetts, TJX’s brands include TJ Maxx, Marshalls and HomeGoods. According to the report, the company’s home products chains — HomeGoods and HomeSense — saw a sharper decline in sales at 13%, compared to 2% for its clothing brands (TJ Maxx, Marshalls and Sierra).

Herrman said that while the company is “not immune to macro factors,” it still sees “a marketplace flush with off-price buying opportunities for branded, high-quality products.”

The company added 21 new stores in the quarter, compared to the 117-store expansion it reported in February.

See also: TJX Adds New Sustainability Goals as Customers Return to Brick-and-Mortar Stores

In May, TJX reported that comparable store sales for Marshalls and TJ Maxx were up 3% year over year in the three months ending April 30, due in large part to an increase in customer traffic following a 12% jump in open-only comparable store sales in Q1 of fiscal year 2022.

At the time, the company also debuted a series of new sustainability goals, including net zero greenhouse gas emissions in its operations by 2040; sourcing 100% renewable energy by 2030; diverting 85% of its operational waste from landfills by 2027; and making the entirety of its packaging reusable, recyclable or contain sustainable materials by 2030.

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