TJX - Earnings call transcript Q1 2019 | The TJX Companies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to The TJX Companies First Quarter Fiscal 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded, May 22, 2018. turn over to Mr. like would the to conference I of Officer Companies Ernie Executive President The Herrman, Chief and TJX Incorporated. Please go ahead, sir.

Ernie Herrman

Thanks, Brad.

Deb Before begin, has comments. opening we some

Debra McConnell

Form are without Thank The SEC these and to retransmission, materially. discussed United risks States that the we uncertainties Inc. and XX-K without forward-looking of XXXX. and to comments limitation, that Company’s other otherwise, consent you, vary the morning. and These filings, of Further, and and copyright today recording, in actual or use the prior filed cause April results plans prohibited copyrighted a X, results subject of about the violation the Q&A are profit the implementation the is Ernie, statements laws. same are reproduction Any TJX plans including, could good the Company’s of and risks make follows or other by for The today Companies, TJX, Company’s

approved a in that Additionally, take inaccuracies appear may we a transcript that no responsibility publishing we by call have transcript. third-party, while this for of the of

turn in the have Investors Investors website, today impact Thank of foreign release in our back the section. are website, of exchange to it section We I’ll to non-GAAP over of you. posted international measures divisions measures Ernie. detailed we tjx.com. in today’s GAAP press our Reconciliations consolidated our in And our tjx.com on the results the discuss now, on

Ernie Herrman

Good morning.

the me call Scott and is Joining Deb Goldenberg. on

sales in the of to we they that with am execution increase now apparel sales that performance strength our our once consecutive issues X% customer online quarter and categories. first adjusted pleased In I Further, pleased TJX successfully our increases four Marmaxx. I discussed X% traffic driver the primary traffic traffic underlying quarter I of sales at behind their and retail and XXth comp at types marks divisions. customer the of are last am we say consistency growing. all business, pleased this addressed of believe comp comp results. to was third to am for us. our with increases of the very very also our the quarter across succeed particularly our many Marmaxx Let quarter, increases and home and the customer strong store quarter me Both share our expectations. this again begin speaks $X.XX is our our saying the of and retail and that first consolidated earnings as resiliency ability per exceeded We that through environments by growth year economic of

four convinced We brands us and allow our quarter divisions. our strong our around moment. that which first are the continue share major values, world will hunt full across market our raising shopping year gain detail a With we in results, to for are great outlook Scott treasure will outstanding experience our earnings,

marketplace and that Looking with ahead, to branded a opportunities is a We quarter to we drive our start see banners. is off merchandise. strong the second to consumers see retail many loaded quality

our laser-focused always will surpass is plans, achieving to team management Our strive on and them. as

globe that grow the to around are for continue the today We and future. can confident TJX we

call continue, to over first will numbers. I quarter our I Scott? the Before turn to Scott recap

Scott Goldenberg

morning, everyone. And Ernie. good Thanks,

our major on exceeded our compared each comp at a basis. clear, are our again, sales so our increases our expectations. driver in are that divisions. like-for-like calculated our Once mentioned, ‘XX to sales To ‘XX comparable the comp fiscal be traffic store was primary X% calendar, four overall of a customer comps fiscal shifted up Ernie As and consolidated increase sales of

the As excludes e-commerce our from a increase growth reminder, our businesses. comp

earnings were share per diluted $X.XX. quarter First

were $X.XX, plan, increase which primarily than share the from operating EPS benefit Adjusted over was earnings above year’s benefited $X.XX. last XXXX better act, a an Excluding expected to EPS by our $X.XX XX% a due $X.XX. tax results per $X.XX adjusted estimated

In combination in mark-to-market our addition, hedges on based above four inventory share versus approximately compensation our X% foreign plan coming of benefit benefited we our of growth and penny gains from plan. another currency the had Overall, by X%. EPS

expected one-time due and a increases the higher a e-commerce hedges. with very year-over-year supply up feel These comfortable inventories last inventory second buyout included related up savings, transit increase profit X% partially Consolidated growth liquidity currency better X% factors. to and constant offset versus impacted we merchandise in benefits As flow points expense the by a per Canada, was quarter, This as in several and but wage increases. held lease EPS sales a a in inventories on were versus X%. the enter consolidated decrease store to on negatively through improvement, including We These basis by inventories year. of was a year. quarter. costs, XX%, basis basis, margin decrease prior pretax first on gains about were warehouses, inventory wage end At chain in margin the excluding our XX

opportunities of quality, We branded are a well-positioned marketplace to fashionable merchandise. full capitalize in on buying

slightly sales to our quarter traffic, and are well. performed apparel well were our and driven our execution Segment X%, Marmaxx due Now, on primarily year’s through last average comp. comps categories past above better recap to and a up increased issues. plan. basis we first margin increased Marmaxx’s move profit division. both was by by points, the performance X% we strong ticket Further, Again, home Comp flow customer than to better XX pleased planned. very

are have to to HomeGoods comps and the year’s traffic sales. with pleased Marmaxx’s drive planned grew last the excited over X% increase. X% about We we initiatives are start and year very strong

grow of lower at April quarter, supply in costs, chain to primarily of merchandise related This expenses store feel great due While stores and was up offset and were sales increase favorable the quarter due We TJX segment profit similar to still for overall excluding opportunity currency comps to due buyout, Segment we was openings. margin, which significant lease see as a onetime the Homesense to the up continued was margin transactional Adjusted primarily expectations. which up. the quarters. adjusted increased exceed quarter, by a buyout earlier March couple at of was result beginning to profit related Canada’s down to was largely foreign significantly Homesense Canada’s increased picked pressure exchange. to long lease XXX contemplated in segment merchandise over up softer first benefit, the wage our were new first plans. margin and about margin Further, in levels a few was year. was margin X% mostly basis Without basis X% markdowns sales primarily business foreign HomeGoods the our profit to last the our a points, XXX gain last in to term. points.

X% We up. we leverage overall at challenging execution segment Europe, Canadian despite that Europe, quarter. foreign be margin comps primarily strong. to retail continue impacted TJX basis periods increased quarter. environment. the the was in points, were sales we operating Further, TJX Australia. Adjusted of by up remain margin very XX our we the excluding the gaining In weather while In pleased confident in we’re In believe At sales merchandise unseasonable our of with performance business. to was Australia, were market the to International International, due be continued currency solid organization, negatively profit in first with early with pleased very share

to and European numerous add vendors on is in more capitalizing vendor I’ll the with environment brands we the Our that as organization exciting presenting universe. our finish is our distributions. us opportunities the marketplace shareholder to sourcing

$XXX bought TJX retiring we quarter, million X.X During the stock, million first back of shares.

anticipate to back this buying billion continue of to stock $X We TJX year. $X.X billion

the consecutive in by year of per share In marking increased addition, XXnd dividend April, we the dividend XX% increases.

turn fiscal end second to and will call Now, And Ernie. the the me the recap I ‘XX let call. year guidance quarter full of back our at

Ernie Herrman

reiterate would major the I reasons for to continuing confidence Thanks, our Scott. in gain around share the to market world. like

our evolving of we continue and our consumers First the general, merchandise e-commerce convinced will delivering to that retailers. environment, In versus brands with growth and we and values, on and fashions comparable are brick value mortar excellent in retail today’s both drive foremost, excellent to online stores. are

the the our consumers, business. which online for very heightened believe our we positive of values growth is of for fact, retail has In visibility

the confident Second, enduring shopping hunt the are we of experience appeal treasure we in offer.

and We wide categories for factors that are merchandise convinced shopping simple the elicits, to experience a in branded the across important that a multiple to leads items and touch inspiration feel easy-to-shop we the ability offer variety of all our gratification, shoppers. instant layout. Further,

We easy-to-access convenient, our also locations. stores locate in

us always fresh surprise rapidly to This Our allow assortments and to flexible that trends. changing store changing is to our ensure quickly consumer and excite customers. react and something helps stores are our format there us

new been well the groups age target that all of we millennial customers Z attract especially have This all to for customers. of continue attracting are and we very bodes pleased we while Gen TJX. Third, in divisions, future disproportionately

Next, laser-focused driving we comp on traffic customer sales. and are

have visits planned attract new shopping. consumers, drive encourage many frequent We and more to initiatives cross-banner

joining throughout focus more more We our are a and a UK strong on of banners with across are as programs we This wherever and strategy platforms excited Further, our the towards on U.S., pleased reach retail plans our is Canada programs. are to growth which our to looking. continuous as number are ensure digital year. emphasizing up media year marketing moving well the support about television our and show continued loyalty customers business consumer the includes the the the this

always, the satisfaction, We improving customer continued shopping good the as on feel sites. our innovating. e-commerce are and about focused experience, growth enhancing of We

to us make a and to is and still helping shop happy the marketing While aware XX/X. they that them offer shop choice piece we customers small when to business, are can our our our of of us, where

tremendous confidence last our to four a disciplined growing of is decades X,XXX countries our with The opportunity reason our the current Next, us current product availability. see in our Long-term, and grow to change is to potential our we stores we our alone. keep Giving major estate just a confidence store real of divisions see operational experience. base. approach to global for total

always plans. are existing seeing and merchandise extremely both access of from what the Availability are quality global inventory in our and have we we We are great branded be -- new support confident we growth with terrific to continues marketplace that vendors. will great to to thrilled

for vendors make attractive with do do Let me what to business TJX with us. share some to you we of it at

establish to aim we long-term, beneficial relationships. mutually First,

business. with Our buyers additional around to to find work constantly ways world vendors the do

quantities nine are environment stores business Next, we to stores, access we and have we as on offer an an merchandise. We countries retails items, dealings are over our from assortment closing clear can to online efficient to vendors are and our we sizes as purchase sites, to their Further, markets. well and an in of very across can way wide grow new and ranging still flexible In other growing. an vendors addition offer extremely X,XXX excellent small large. way very where styles

vendors Finally, stores we our desirable and products brands in mixed offer other great great be that such extremely brands. their will is appreciate that with This them. see our to in

reinvesting up, to Before business. you that I I in remind want committed our we global wrap are to

While and Further, in cost about an believe we’re XXXX. are years, to be to half the for look at few the quarter to feel second back the of rise, In strategic right structural are long-term to year the investments to great next plans using strong our ways closing, environment expecting we start where our over approach continue investment plans. support to off-price significant our pressures reduce making long-term we and we expenses. we spending our growth

having on us of enormous of replicate. difficult confidence. We is for our breadth sight TJX. our and are U.S. our long-term unmatched The on We extremely our depth and and simultaneously off-price to execution our focused believe vision strengths business while knowledge near-term the in many extremely the give that set internationally

hunt in-stores passionate relentless to changing excellent surpassing values both continue team about and goals. confident online never an our for and management brands us. treasure to are Again, consumers We is and that bring our will strategy outstanding at drive mix be exciting a of our experience shopping winning

and up guidance we’ll for Now, then Scott I’ll go questions. to over Scott? call open to our turn the it through

Scott Goldenberg

year guidance. XXXX Thanks, begin full our Ernie. fiscal with I’ll

I’ll compared fiscal fiscal to that XXXX, purposes, modeling XX-week For remind XXXX is which you was a a year year. XX-week

release press increasing are in of high-end this adjusted we we EPS guidance $X.XX. As the our morning, by our mentioned

factors. our beat quarter assumes that the of will full-year first plan following be $X.XX by Our EPS offset $X.XX

significantly plans. First, exceeding higher due impact our store to is operational than factors. we offset a to as by now primarily our of combination we’re the performance expecting a costs negative stronger we anticipated, results partially we’ve due $X.XX This seen freight expect non-comps originally

from benefit our the Second, $X.XX hedge expect first year. inventory we gains of throughout of reverse remainder about the quarter to the

year want the $X.XX. X% this point come excluding our increasing Again, increase would our $X.XX exchange tax benefit, originally share end a $X.XX from translational the $X.XX high $X.XX from we a act. from to increased in guidance benefit. foreign are related the to the would GAAP X% This adjusted reduction expected the benefit out we from of I lower tax expect versus have full items than previous to evaluate a to adjusted act. benefit $X.XX $X.XX. per ‘XX. of planned. Lastly, to we guidance be ‘XX in EPS approximately we to as than fiscal our basis, FX lower On further to we earnings now in impact expect the the the if now benefit fiscal This not the range share be to tax We expect XXXX we guidance that is XXXX for to $X.XX continue earnings of of translational per $X.XX

the includes increase over billion wage about range, X% guidance EPS sales assumes X%. that XX-week Our prior This growth X% in to consolidated $XX.X guidance a year. increases billion the EPS assumption $XX.X impact negative to of to a an have will

X% We are comp consolidated for plans prior on X% to to our assuming a basis, similar year. a increase

in profit adjusted XX.X% range ‘XX. the to expect be in to down points We XX versus to margin fiscal basis XX.X%, pre-tax XX XX.X% the of

XX.X% margin We adjusted compared are XX.X% profit last gross in XX.X% of year. be planning the the with to to range

a as the the XX.X% in year. SG&A XX.X% versus of sales are range of last expecting to percentage XX.X% We adjusted

of purposes, modeling a we net XXX and XX.X%, are a approximately rate currently of For anticipating count million. $XX of average expense tax million interest share weighted

full division. X% by our of At to are year to Now, X%. comp continuing Marmaxx, we growth plan guidance to

billion XX.X%. $X.X to in and sales $XX.X to X% range profit of sales of comps At margin the to we on are HomeGoods, We now to X% of planning XX.X% continue expect segment increase billion.

profit We of to segment planning are the range in XX.X%. to be margin XX.X%

plan X% translational to For continue of X% sales on of to expectation Canada, reduced due entirely we is increase The to billion. FX. sales a total comp $X.X

of a Canadian which currency, dollar remainder negatively range the margin. be for of X% We segment to comp of profit TJX to of may the currency, billion in X% segment At excluding year, to the $X.X to continue profit billion. XX.X%. in to we to cause excluding are International, Adjusted foreign now is foreign margin, expect impact X.X% to growth assuming is of XX.X% sales on $X.X Adjusted rate lower to margin, be FX segment expected the range transactional expected X.X%.

to on QX guidance. Moving

earnings expect range share the $X.XX. to $X.XX per be of We in to

to by X%. increases the guidance another EPS by $X.XX per our from $X.XX will X% earnings estimated versus department benefit within impact an growth costs the and to reform, share. impact $X.XX will to $X.XX share X% related negatively of be global that would negatively adjusted restructuring items Excluding range of EPS tax growth prior IT in This year’s per assumes wage

EPS that benefit We’re currency anticipating foreign by growth also X%. will

the we in were these noted restructuring IT press original contemplated costs in morning, this As plans. our release

clear, costs be have no fiscal negative growth our to original our restructuring incremental guidance. EPS impact So, to expected versus XXXX these

We’re due of guidance assumes benefit modeling FX. to billion. a translational approximately sales second quarter revenue to $X reported This X% consolidated

range X% consolidated on and we’re sales, X% Marmaxx. basis at assuming both store growth the to comp in For a

in X.X% is XX.X% range margin quarter the prior Second year. to for pretax versus planned profit the X.X%

to versus year. to We’re profit $XX.X% in anticipating XX.X% of last gross second the range be quarter margin XX.X%

in again XX.X% contemplated of were We’re versus restructuring year. sales SG&A plan. be in original percent to approximately expected primarily which the as is expecting to costs, due our SG&A increase a last The XX.X%

XX.X%, tax from currency average the It exchange will to currently count expense and interest second beginning at million. weighted for purposes, For of of guidance share $X levels and rates about of the modeling anticipating quarter. of we’re second a unchanged assumes that rate million, is year net that quarter our remember remain a XXX the full the important approximately

please questions. you now, Now, to To your it up one call we’re Thanks. questions. schedule, open take per happy person. going questions we ask that to we’re your will on limit to And the keep to

Operator

first Thank Greenberger. question Kimberly comes you. [Operator Instructions] And from our

Your is line open.

Kimberly Greenberger

Thank commentary I really on first Scott, so congratulations and about Wonderful. morning your a with excellent regard Okay. IT. you your global wanted ask Good quarter. much. to to

the Can Thanks. do I think, process you said about on you to reorganization, of us in for that, progress the years and reorganizational restructuring. just on the I need technology know, talk to you’ve what’s infrastructure. a driving the been whole that? expected this benefits, number now improving just

Ernie Herrman

Really, jump give terms I’ll is IT benefit’s said number it don’t really the growth and plans next for -- of this us in felt our always And to what in the but we thing reasons, of of is had contemplated that plan Ernie. way, few plans, positioning Scott. had it’s Scott in a certainly years boils was the the for going a But, future us already be. the do to take achieving. we as down the it for something, here difficult rates to on it out to growth to the this specifics into by we of Kimberly, that boils necessary down and for area. our

Kimberly Greenberger

buy. with to us just you. for I almost concerns resurgent is a of for years to so here your Company the really the the very availability much. issue I’d to the are find never of can give on goods I sort ask we inventory of But it remarks followed as seems inventory Ernie, the regard forum given a and quality hearing XX seeing. Thanks But, bit opine every commentary you’re able availability? are like to It that you’d like having follow-up inventory you you an the inventory there, just during that to as on looks out prepared much position, still clear thought

Ernie Herrman

I way you for back with go us of Kimberly, know so first and years. all, years

in actually five asking of And years what this there it, not I unusual vendors of the all, because on Right is appreciate goods been you across terms brand the supply about would in call I or for that years, of tiers and six. market front. although and can’t and the you’ve there the last in degree ups an recent remember level. So, question past, I times the downs seen certainly talks quality now, has

general on well, better time, has quickly. vendors just much it And by brands. category challenging every never interesting nothing is It’s probably hear our to more availability. to It’s are always way to But how be It’s the all dialogue. that’s would regard complete with say. selective So and been category, to buy it we it more the varies most most now, or had plentiful experiencing the degrees get buyers, been we talking be out manufacturers the hear right there, in we I seems in dialogue thing cutting we And across the are happening industry say in about asked any varies that I -- would our brand. by all the team what -- by how my they it more the tier the usually And or every reflects in that back. pipeline of we opposite.

have same I the I a And So then glad question because the question. we to am here degree. it’s brought you puzzling quote, the little

any you are experiencing at, out in exactly hearing there is just based what being not what we are we So what hear way. on it’s

Operator

from Our next Saad. comes question Omar

open. is line Your

Omar Saad

insight the costs. for ask the availability, on freight a maybe to inventory bit deeper dive to little Ernie. you I on in wanted Scott, Thanks Hey. rising

over You obviously few with last years. the been have payroll dealing

fee. and raising Amazon membership watching commodities are prices We go its up. is energy prime

where are costs into guys in needs higher does you industry goods kind And the evolve of industry. over deliver this to entire We thinking expenses eventually to transportation rise two? to about across freight to kind it tactically of next and a the accommodate or seeing elevate prices are How situation consumers? the then,

Scott Goldenberg

-- Ernie will about you let I about little the and So, comment take just bit through, retails that. think a how me that

the we a this give built we I -- costs rising on have freight increase but had color the point obviously as to allows much monitors our is built just into The to kind more of due year. that wheel. in that drivers, had strengthening be was may we regulation government largest -- At as it this of think, anticipated. not obviously the a you little some of the impact

of than how more our that it’s higher we increases say we higher had cost had network. several result obviously had we they mid we increases And than As we single-digit are anticipated. rate anticipated, logistics and to points do seeing a are impacting our related that

surcharges, extent on also the to last as fuel, our Marmaxx. we last gone nine -- higher as additional significantly into and both of seeing fuel We’re some months, build the to up as more primarily sales really higher the the have weeks into rates a they at year forecast volumes rest couple over relate of lesser in

have Finally, shipping. read where you not for may for to spot just of rates we do are considerably which what higher vast major is through the to rates us contracted majority our or -- be our a clear,

just give So, cost on little there. color more you the to a

Omar Saad

terms company similar see, and an other response cost opportunity retailers follow-up, And the do anticipate of in a you or increases? as so, are pricing synthesizing as guys presumably

Ernie Herrman

follow we’re it closely. So, trying to

retails, out well. leader, to sure our you’ve just all, operate gives so the comes it while would the we of retail follow for and adjust so the to relative and other to retail you We know of know savings to the door when door make would So, us the would retail. as we speak how first appropriate out a

frequency business increased freight not as increase -- but of slightly, box by enough versus there their to The not perhaps the go could are out we and right of other some is thing up. how only our to question slightly retailers. impact much is it’s little might definition, news the might delivery now, way our they be the other are of of with is, your prices, course So, will of start retails meaningful we model on specifics then the our is the shipping affected. -- We a

we’ve been is. it, to how right we’re a monitoring retailers as now and -- based on certain big on little it So, clear other when

all is it. nothing also, talked know, dynamics, fair that a handle hinting in happen if notch. get the certainly does away. called you that on continues freight about retails the to are long-winded way. something up lead happen, it of that continued And Scott answer get being get go situation out were your is at Although could don’t would to to given We to think could releases. right of if moved amount just My point, actually more, it that worse I a I that in even trying just to up do where it

But, asked are about. to way to see. So, sensitive you just we very we’ll what

a question. very So, good

Omar Saad

Got it, job. Great Thanks. Ernie.

Ernie Herrman

you. Thank

Operator

next question The comes from Oliver Chen.

open. is line Your

Oliver Chen

Hi. Thank you.

thinking happening just from the Could And understand categories? terms in trends. a up strategy you picture was ticket help what On different what’s question you’re Marmaxx was and around M&A. us encouraging side, and being prior there about of the bigger

driven been closely and to experience. it value drive as your resale continue more disruptors. business and One in be to gets new and about resale of ways and that we’ve is Thank markets you. opportunity as millennials the What thoughts different that mainstream interested are generations following

Ernie Herrman

take I’m one one. ticket to So, second Oliver, the let I’ll and average take going Scott then the

Scott Goldenberg

Yes.

Ernie go seeing mix, go, exact what a this more a better of just are said some do best not -- more bit, into of than is we other strategies, I’ll details In that doing, brands. the we’re terms of we

piece that’s of it. So, a certainly

-- certainly have but to at the point, helped for specific plan into say Marmaxx. indirectly the other may is you your am categories going The the well, that the talking would retail piece both does second am is that we that at I I not parallel one get as of helps, this have of healthy go that. as within flat a quarter I changes also mix

the planned flat had back slightly with than slightly So retails to that is up. anticipated better slightly half we

see decreases we -- the in first of heard that for about couple Marmaxx. there years, again, obviously for So less retail pressure the years have time talk you’ve we and so us last at

big is change. this So, a

Ernie Herrman

will with mix as as the at beginning, I in Oliver, the of just as departments And mentioned and far some Scott back. else has the brought way jump something it there, that

this category was categories just really beginning -- level, in like top level So, down and the and not merchandise down in driving mentioned managerial it question. a was it your where at you we strategy

and approach. I So driven and level other way. also from and up, guess, give down also little -- trying a it the merchandise the want the here, not are -- same It’s color what’s the with you GMM. going to got level it’s to happening understand way coming was again, managers top the trending Scott of I was buyer the anything ticket down back us some from that from are just a helping that more are categories now the a bottom not And we generating.

we like to goes a took generally it’s that -- happening to good than because us So, thing nice when it usually cycle. moderate, this you thought, see would see it just on it it’s a longer

trend our the ticket. keep seeing keep continuing, helping categories will in we hopefully, So, those

think, would tell retail that were do probably the it’s to something at think we would expandability interesting. you asked is you more something big question, We it be the would not strongly. about to I where find now that believe On actually enough asking. the I likes that that stream market entertain do when I level road to down main there you, we appealing, if It’s it’s is think that we or or goes

by see it sites on. However, the are intrigued, at we and we we look A, everything

There it’s is that of really what in are certainly market terms a branded do. to not which that great the and of intrigued product fashion up it and they We a we probably lot by retail value like price carries rally branded. is selling business dissimilar the that’s designer, I and content real at. are

So, on call. won’t anything commit obviously, conference this we

it’s will just very intrigue. Good We question. say

Oliver Chen

good look about of we a really chain, distribution on And non-apparel. of Are categories terms centers things supply Because basis? to there quick on thanks. just at continue longer a have think have you great Okay, job as opportunities which in should term pack in differentiation done the in really with a and sizes. dynamics also handling the terms entering different very you

isn’t happen home around So, product what such, the cetera? because just it easy there, move very to et should

Ernie Herrman

asking you goods about more the Maybe… to ability efficiently? Are process us

Oliver Chen

the of growing mix how and time? in just And that reorientate nature might of also the the that the future DCs and non-apparel over

Ernie Herrman

expanded have our we mean, I DCs. home area processing So,

of that that a part taking it where ways that’s the home we that. our at area as categories DCs externally one of processes least for processing. out the we’re we’re our specifically. efficiency think talk is look efficient I increase can mentioned new at getting, Because about you’re of of looking in always you the to in to terms But, put

obviously we an opportunity as enormous move However, sales forward.

Scott, know, I don’t I So, guess you do have…

Scott Goldenberg

Yes.

say I I And would we’ve said very with that key ship difficult think, efficient way prepared business the it to back we earlier and to one the we as our we in think items capacity adding something goes growth a pretty that well. HomeGoods, that’s been that. where we handle I we bulky, of supply home. do it we that very I of of And differentiator plus chain And do we certainly are is to think that think do in it’s efficiently. the XX% only our things the do thing think in remarks I

get obviously that to again, the all I a and is differentiator of to we’re with But, do it the long. it’s slightly same do -- think it to have I view, a think think thousands of doing been do. volume compared skews these items and of point I very level for probably expensive Ernie’s key big more it of to Just do model these in and different that others efficiently, don’t able

Operator

Our from question next Hutchinson. comes Lorraine

open. Your line is

Lorraine Hutchinson

Thank for up you. Good quarter. to challenges morning. on that back could early I were positive at HomeGoods, was year you’re you hoping put remainder then, specifically? a further little comment the HomeGoods you margins what feel the in the on do track the of And merchandise

Scott Goldenberg

Ernie take just it will I’ll in. Yes. and jump

to on -- -- what issues through we at it that the expect I merchandise that as flow move of of year-end primarily pressure year. think, we we the first we our in call called end had quarter, the due what we the did as to of call some some relates the the that markdown end margin,

we clearly we longer than on of the sales have an it majority of the and for our our sales to we But, what last markdowns year. at anticipated had indicated, the lasted and were picked up I seeing both a think, it impact, bit think would the beginning as trends I quarter.

to through quarter the middle normal the everything normal was, -- clearance flow. back normal level we as move with quarter, again, So, March April the of levels fresh to we else as move and was and of a letters

component normalize So, to of least rest we our at through that the year. of the -- the we pretty markdown be would expect as move

Ernie Herrman

will sword. terms I in and of also jump double-edged a was Yes. in It Lorraine of the the a sales. topline bit

actually as And about course and that January our But markdowns As out we of sales our a ended the our while bit quarter ago. a had flow during with disruption through. as we up highlight first January, and as transactions quarter accelerated that came little talked to for quarter, the more, impacted we Scott February well. moved of in said we fourth the

from So, they March each April, to better month. February got to

to in were aware last other situation dynamic out slow, over easy were something were forget, our quarter. I’d of and estate the little going but prepared we we the So, it’s like gate the a One opportunistic kind encouraged there, we unfortunately the be of again, based years. end of you of the at forward it’s just would -- we to couple on flow of that start real

found is And openings store new this count deals had and we like at reason advantageous pockets numerous country. -- our because accelerated estate and store do we HomeGoods one so, just we very the in throughout anything real

we last HomeGoods prior So, months, had ironically, a opened opened small XX that we stores quarter, on to relatively XXX base. the -- had

a actually the growth. that as next growth probably further a tick sales at And that store have going have So I little couple we something lot quarters. more and comp. probably coming a forward because new again experiencing Scott transfer of ticks looked imagine, of is over with you we new out bit that that was, a Anyway can up more about our of were XX% stores,

greater top-line at the growth many versus So, our of if year new a even so stores. in guys this of look take because year, you it’s HomeGoods last

reasons where So, under it, but little like the I we a top-line talked comp normally our for the was place, would about a good we is to in guess, speak. so

to right the though. to quarters. couple we So, look next over that Still do at you that the as keep of cannibalization mind thing bit like a in just more little

good that happy, positioned years because on us will it down where of in happy stores. all And We HomeGoods. line, are very these very very the throughout couple have bode we these stores with income

great Lorraine. So, question,

Operator

Our Lejuez. next from question Paul comes

open. is Your line

Paul Lejuez

what curious, question. theme, actually opening then, could those you sticking on of with your Thanks. any reads impacted thinking that point that you difference stores seeing from anything are HomeGoods? not HomeGoods Ernie, if to the you perspective new of the might made was there on and last look Homesense going there of the HomeGoods the the was and my stores comps are the is that a And impact home might stores, impacted, at early share that us quantification also if be if store nearby I that by with the be versus category there? performance stores you

Ernie Herrman

Yes. Paul, Scott I will let deal.

Scott Goldenberg

prior -- bit again, cannibalization. store got a it’s not be a don’t think will but overall It’s versus year, I would mean, Yes. difference more -- a Ernie it reiterating a large what just there’s the that But, I store it’s versus I more. just difference. said. a a in cannibalized non-impacted I think bit

stores of any among so trying think the terms I of year more. what comp don’t we all first, the pretty in of your that of not when have consistent is you getting third -- seen into age the I -- make the comp divisions Ernie you the stores, once is second, there’s those start So, point stores are still many think, to have opening, was

start that future, stores next in hundred or status. just comp the entering we should have we starting to that So, -- as two the couple the to year, now will that will years start less they enter are as seeing be of a benefit

is seeing we quarter. going margin, due for I pressure, markdowns. of And -- terms at the our And is, In the think merchandise in most our mark-on the basically, least last are to I’d last terms one Lorraine the HomeGoods although the of back this mark-on. offset thing the to with call of strong with is essentially across all shortfall most freight other at of the mention of divisions question of -- many

to So just out. wanted get that

Ernie Herrman

Homesense, experiencing than Their -- -- Homesense look HomeGoods transfer And at stores. pleasantly our are And then, top stores continued on sales nearby we nearby constantly. are with the surprise outperform less at the their this to planned. we

to So, right -- you pulled both And nearby the Homesense been categories fronts. better relative expected. so store. the think the why have now on each and is are we plan. home I which soft we were pro formas about the initially asking Well, to pleased cannibalization the why et from that’s driver HomeGoods so with that on think the really, that we’re are which performance been the winning reduced differentiated certain we accelerate is of just the from It’s top-line beyond even even stores Homesense new than been differentiated so -- cetera. just differentiation, out But categories has we

Paul Lejuez

Canada on versus and apparel Great. Home Can touch in just you Europe?

Ernie Herrman

performing How’s healthy it’s -- been numbers, we performing way, won’t in -- Yes. both. the put Home that? it been but give has you this

Paul Lejuez

apparel though? Outperforming

Ernie Herrman

to We will right don’t that want give now. we -- not

Operator

comes next Adrienne Yih is Your The question from line open.

Adrienne Yih

to on Congratulations morning. the the great start year. Good

Ernie Herrman

Thank you.

Adrienne Yih

sources. talk from to play much. to e-commerce aggressively you the strategy, follow You’re is percent brands? you on the then, inventory welcome. the Ernie, Is And you inventory how build e-commerce growth about there that? Thank that’s wanted it up today, supply want I coming pure Scott, very can

Ernie Herrman

Adrienne. Hey,

addressing first if online value terms prewritten creates I A, the at would your apply vertical of don’t for well question, you non, of as that an caught value. So, the as the in script, compare umbrella the know us in it that to players script and

able the side availability of of a the that goods vertical, not they And from So, situations. to from But we’ve whether that’s been business. is online buy those grow been benefit both type are vertical to continue and markets actually. or prediction will of secondly,

they’re merchandise predict years. to flow if you all harder retailers know, sites. merchants, amount, you all on et next that believe online the few expand are to going to businesses those reason we look sell why continue So, the vertical because goods any going harder up to what quantity the the can’t appropriate see as of cetera and by from are I of way omnichannel, -- to and those the at, for over availability

knowing which will we’ve So, Maxx script terms a that treasure appreciating in hang they hunt of think can strong come us which it’s challenge brands very to mentioned strong other format them. get other for enjoy harder I they’re And the benefit and also seen the goods, a a is really what online, the and we of they into are T.J. in they in visible those dispersed with a with fact the brands, Marshalls.

only is doing, something, this already see see yes, we as but not a as it we So, it we’re opportunity. growing

Adrienne Yih

helpful. Very Great.

Scott Goldenberg

Yes.

about talk strategy of I’ll forward. -- terms e-commerce bit the little let the In a Ernie going

at seen seeing, certainly what tjmaxx.com increases the our strong quarter. we’ve very tkmaxx.com In first we’re terms of business, in and

We also percent scores we’re a both customer the awareness sites is satisfaction like the those what UK, pleased the seeing, In we’ve up; lot grown of up. of that the around are business. the metrics the in with particularly

is few year, there click through some pretty collect have sales business UK quarter click do terms Our the the of in online basis business and the and virtually that and the the of in is UK we our points the prior in versus percentage collect. of about so growth; in done in advantages stores a XXX all significant XX% almost a up

have we there. So, a advantage nice that

the with results. pleased real So,

get growing getting. growth. but returns also of I see the to growing incremental a In we -- going the small it think seeing think to We terms store. business, believe we’re hope we rates to we’re back part It’s the in it, similar of still of terms due and we’re nature, -- certainly like what the that of I visits -- we’re

we think, as it adding positive certainly view TJX overall. to I business

Operator

The next Matthew Boss. from question comes

Your open. is line

Matthew Boss

or about execution reoccurrence? and maybe guardrails mirror rearview the now in think of put is HomeGoods Ernie, issues the in that learnings Marmaxx and to likelihood to Thanks. you’ve is that it key both fair place now fully any the reduce

Ernie Herrman

Yes. Matthew, good question.

this? issues It’s the We mirror. isn’t It structured, are the Marmaxx, we execution business in. happens isn’t the that have in traditionally gray. a -- this guardrail -- On put I rearview we’re how in. Right? what little And put a is totally do rigid guardrails

And So, you’re fashion-oriented balance amount it’s to issues degree you of have of subjective bit if and that what you a remember, dealing you taste were the of buying look the goods the and with when issues, issues. to a fashion-oriented Marmaxx more that goods. have

really it’s And to so, our that But less. Matthew? certainly of is, impossible make minimize news put business, the guardrails. we And -- the as years, the any happening is execution up able firm impact quickly sense, you were to good and very in of Does model it could likelihood of all identify we have see, fix those of as over missed and issues. quickly, the

tell it from we we Great of put little our involves had business, I quickly a question. yes, years or would our can spent type issue pudding. especially from part a I we’ve of put in It’s past And proof guardrails, the know in any time happen, pride experience it always then if a an of recover have. areas fix ability on art form on things re-strategizing aspect a those to qualitative help think, being and conservative just minimize tougher. answer we the is execution that I’m past do the just of because bit we on But, place you, and to that that that something my of would -- So lot -- likelihood. I ourselves

Matthew Boss

transitory now X% items, more If growth. the line think bottom about efficiency Got you just earnings years maybe guess, profile of and it. some margin X% tax for guide look this as the look Scott, I calls think current some to forward were in through ahead? And to we the can then, we I to initiatives talk how year’s to the of reform at

Scott Goldenberg

new to really add there. Nothing

to what doing be we’re But, said -- change EPS our is Obviously, going I really and a that margin growth plan that both talk the will strong continue point. up We the this real what to merchandise on when the the very at year-end no tick we to not we call we said at healthy and about moment think -- that. earlier control. implies to on could expense

Operator

And from Shapiro. today Marni for the final question comes

open. is line Your

Marni Shapiro

closing you the with because hope best. I me you’re left for last

Ernie Herrman

That’s very good, Marni.

Marni Shapiro

I we just things wanted here, -- haven’t work the couple miss of and into to we’ve here, up a on put follow strategy over on exchange. technology you’ve years a focused that foreign so much

all like If But, Australia, up you just works You’ve beauty to sort in of bring a the CUBE? departments and departments what is these -- at could us things speed the it it maybe the Marmaxx still still are the And THE things And you about are about talked internationally? is works? are on for RUNWAY and to out? international pressing. in seat rolling bringing Like, general. you the have shoe they Are been them in all into what’s example? of taken putting back

Ernie Herrman

Okay.

with first deal let’s So, the couple.

like Marni, was that a… So, good, it’s because

Marni Shapiro

Ten part?

Ernie Herrman

question RUNWAY not on store, sense. It’s RUNWAY we wrong haven’t years It’s don’t by heard and been even -- And but or We watching could What stores way, to by want may shoes Scott that that that new clarity what THE certain RUNWAY asking? we’ve little RUNWAY a been probably some circle On it. it’s back in now one the stores -- the do stores. us something there. on obviously appropriate THE of me do doing other But have parts. that’s and to shoes? you’ve on. added, we THE and it And put little adding some you’re we for But, for makes question in with store be love you yes, we’ve to been we the added rob stores, five RUNWAY, we’ve mini be our your clarify and RUNWAY we you stores any careful an update. that if

Marni Shapiro

one And know all where you silent into it. There expanded whole at bunch stores. rolled department on was again, it a radio didn’t little point. push Marshalls at stood. then, I shoe guys little And for like that you out a these an a went sub-segments, And extended

Ernie Herrman

in the actually It Yes. Marshalls is has we ingrained We and because just T.J. -- radio for -- Maxx between it all stores. us shoe think, And the the silent don’t a Marshalls. expanded became gone our differentiator key shoe into I business. format of went

into it Canada We we when Marshalls opened Canada. in have expanded

over that We to deal because business have separately. we not in each the have with UK done

UK, the over estate have go So, space. don’t when of footage you they the amount real square to of

are the there. we with situation So, rack stuck

albeit have that but we So rack. -- it’s those upgraded still racks, more

T.J. like But did expand. Maxx. more So, we it’s

Marshalls this So that what area to other was the -- day see every expanded footwear new has it. in the you other Then, category?

Marni Shapiro

guys significantly had very have there? a -- in months your obviously of puts Beauty a department are like XX look you to and takes been personal and but what the lot which across, very X been and also say. What pretty it’s a care growing for thoughts T.J. I’d last that in hot today sure It’s Maxx. does category,

Ernie Herrman

terms more we pretty give tell taken good it. -- But, Yes. sauce, secret so. we rearview until thinking give a in mirror, speak. some that little the don’t as And of category. we’re to we in of to you I it’s cannot give specifics department strategy what would from can’t could position we see like you future or out on We bit out the -- a expanding store, so you future don’t not, if the we’ve in in can’t give yes,

Marni Shapiro

Fair the yes. luck of Yes, summer. with enough. Best

Ernie Herrman

to Same you, you. Thank Marni.

our think, that was I last caller?

Operator

Yes.

Ernie Herrman

this you for look second you, us would our updating on really Thank of At forward I earnings call to joining And today. point, you everybody. I thank August. quarter all like to in

Operator

that your today. for gentlemen, conference call and concludes Ladies

all disconnect. participating. may you for Thank You

The TJX Companies, Inc. (TJX) 22 May 182019 Q1 Earnings call transcript