TJX Sees Softer Sales of Home Goods After ‘Extraordinary Growth’

The TJX Companies saw softer sales at its home businesses after two years of “extraordinary growth.”

For full-year fiscal 2023, comparable store sales at the firm’s HomeGoods and Homesense locations were down 7% while those at T.J. Maxx, Marshalls and Sierra were up 7%, TJX said in a Wednesday (Feb. 22) press release.

“Sales at our home businesses overall were softer as we saw extraordinary growth during the during the two prior years when consumers focused on purchases for their homes,” The TJX Companies CEO and President Ernie Herrman said in the release.

TJX stock dipped on the news and was down about 2.3% early Wednesday morning.

Overall, the off-price retailer of apparel and home products saw U.S. comp store sales that were flat in fiscal year 2023 but up 4% in the fourth quarter, which ended Jan. 28, according to the press release.

While TJX comp store sales growth picked up in the fourth quarter, it lagged behind last year’s results. At the end of fiscal year 2022, TJX U.S. open-only comp store sales rose 17% for the full year and 13% in the fourth quarter. “Open-only comp sales” measures sales on days the stores were open in FY 2022 against those on the same days in the pre-pandemic FY 2000, according to the press release.

Herrman said in the release that consumers looked for bargains and surprises while shopping during the holiday season.

“By staying focused on our off-price fundamentals, which have served us well through many kinds of retail and macro environments, we continued to bring customers around the world exciting values and a treasure-hunt shopping experience, every day,” Herrman said. “Our eclectic, rapidly changing mix of gift giving assortments clearly resonated with consumers this holiday season.”

Rival retailer Ross reported in November that it was benefiting from good availability of name-brand merchandise and a strong consumer demand for value and convenience. Ross will announce its fourth-quarter results Tuesday (Feb. 28).

Noting other trends, TJX said in the release that it expects to be able to take advantage of widespread availability of branded merchandise in the marketplace, enabling it to keep fresh merchandise coming into its stores this spring.

The firm also reported that it saw unexpectedly high shrink — theft and fraud — during the fourth quarter. This required an unplanned 0.6 percentage point shrink charge versus the previous year rather than the 0.5 percentage point benefit the firm had predicted in an earlier guidance.

Looking ahead, TJX expects comp store sales to increase 2% to 3% in both the first quarter and the full year of fiscal 2024.

“We are energized for the year ahead and our plans to keep bringing customers around the globe ever-changing selections of great fashions and brands at excellent values,” Herrman said in the release. “Longer term, I am confident that we are on track to becoming an increasingly profitable $60 billion-plus company.”

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