- Earnings call transcript Q3 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to The TJX Companies Third Quarter Fiscal 2023 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, November 16, 2022. turn call to to like would the over conference Mr. I President Chief TJX Executive Herrman, of Officer Ernie and The Companies, Inc. Please sir. go ahead,

Ernie Herrman

Fran. you, Thank

Before some has we begin, opening comments. Jeff

Jeff Botte

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

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

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

Ernie Herrman

Thanks, Good Jeff. morning.

call Joining is Goldenberg. Jeff me Scott and on the

as in more to look role, on I to him emphasize how great I enormously and being forward. which broader forward has As fiscal Company I partner. beginning Chief beneficial Vice as we been move our cannot Financial with January. we to like recognize to and would to to successful He Officer wanted promoted with Finance. Executive year enough has extremely the grateful. for we a is opportunity of his his congratulate is as working announced remaining are been long me President, this John at personally. closely I new the take tenure Senior John Klinger Scott CFO today, Scott truly late

We that appreciate thanking continue shoppers and to associates to of their and for our efforts leadership. John today expertise Scott's day. from merchandise pleased start to benefit both, are I'll our collective TJX TJX. all and to work values and their will truly We very by deliver great global commitment every hard

results. pleased strong quarter our margin. Now I we merchandise to very delivered terrific profitability and with a am third our Once again, performance.

sales were the our top the U.S. apparel line, business, its performance better-than-expected Marmaxx, strong. where comp On excellent sales were at driven by particularly

business quarter third associates. the Our by once our our talented of model highlight outstanding execution results again flexible very

the am that flexibility within merchant While factors, our our immune depth and macro expertise retail organization, to business I an convinced model remain not of advantage experience, for the especially our important us. will our off-price of is and

stores advantage and buying holiday the fourth the to flow our exciting assortments environment in quarter, terrific fresh and As online of take we to position enter tremendous to a we're this season.

our profitable market and holiday term, company. and share moment. opportunities to continue an our beyond drive that a Medium values great wallets longer remain in plans resonate is many with have that whose convinced value sales stretched. initiatives I'll to planned we are extremely very our confident and to we Further, about gain talk remain will our remains well-positioned more We TJX consumers strong. XXXX become proposition and more even

more detail. Scott? I'll third I the results continue, Before to though, call over quarter financial to our turn Scott cover in

Scott Goldenberg

details I'll quarter. with some everyone. Thanks, on Ernie, third additional and the start morning, good

Third points XX versus year. last basis up was XX.X% pretax quarter consolidated margin of

of of some our margin Third the pretax the end timing high expenses. largely to quarter exceeded guidance, due

Our fourth of assume quarter most plans benefit the reverse will for this that out.

other high of our basis Aside in timing of pretax margin expenses, pressure. flat, were with line despite incremental our of freight essentially XXX the plan. end points components Merchandise from of the the margin merchandise XX to we due a Incremental pretax buying. from margin, negative quarter. to benefit points impact with headwind markon, mostly a wage costs be significant better a margin saw Within this to continued basis of was

our X% Third sales U.S. decreased store quarter comp exceeded and expectations.

would anniversarying As U.S. on XX% X-year increase fiscal a year, X-year the same XX% When quarter together, Further, versus increase on our month reminder, improved outsized was comp we U.S. which a basis. last basis. stack an of stack that comp open-only comp represent added were sales each 'XX. a

end quarter been would third exchange, guidance. foreign total of have sales high Excluding our at the

the U.S. strengthened customer as quarter, improved the the down, traffic basket third but up. second and progressed U.S. quarter. was average quarter For versus was

assume reverse Lastly, will the the this largely adjusted the of were of Again, $X.XX. this per to guidance, benefit end from timing was high benefit that expenses, our out. a most quarter share earnings above due and for our of fourth plans some

Now it improved was to a sales quarter third great to has it segment quarter. throughout strong the see store Marmaxx's increase Once XX% apparel comp throughout last margin X% Marmaxx's an was basket the Marmaxx's comp average and increase month Comp increased again, At business. XX.X%. comp our results. year. in profit open-only Again, year. as were sales divisional versus each Marmaxx, increased positive

slightly. versus versus when year versus outsized this saw Marmaxx and saw last segment spending sales categories. margin a an was strong particularly improvement to of increase of increased year-over-year the quarter month traffic -- store profitability. was Canada, a Comp TJX home-related At quarter segment profit significant we customer impact pleased margin the The their costs. was decreased improvement mostly of incremental the HomeGoods' overall their average At X.X%. in basket are with outsized half we saw overall when XX% XX% performance, -- open-only down, we comp second freight with quarter. the third due each moderation profit year of first While the HomeGoods,

despite a up margin which margin fiscal 'XX. X% compared when offset quarter. from sales a growth sales were on in month currency each basis third were Canadian X.X%, lower buying management, other deleverage third constant TJX better the from third was basis profit quarter margin X% International, fiscal exceeding and essentially sales. At quarter third in expense quarter segment to Overall due versus XX.X%, their freight Third the wage profit Further, fiscal of 'XX line margin. sales was incremental quarter some mostly improved pressures. segment currency the was 'XX Pretax also Overall quarter. to expense and constant down on

Moving to inventory.

receipts the to supply due XX% last was currency XX% improve. up a quarter versus per-store Our chain merchandise third balance basis, This than on to is of On up as continued basis. early inventory year. higher the sheet constant we was inventory a expected

balance our inventory fiscal store compared We sheet are and 'XX. levels very to comfortable when with

position store and overall and plenty excellent are distributions. markdowns liquidity in I'll We of have buying with inventory take are still opportunities. the 'XX levels. of finish Importantly, in packaway shareholder great environment, liquidity and turns advantage with line our to our fiscal including

million the through dividend quarter, quarter, the quarter $X.X $XXX of operating flow programs. third shareholders buyback generated cash. During returned we billion we billion and with in cash third the $X.X to In our and ended

Now, to will Ernie. I it back turn

Ernie Herrman

Scott. Thanks,

we in quarter. opportunities the the highlight to and see fourth to like I'd drive Now, traffic sales

is confident this believe inflationary visit. am our online seeking and will environment, is every in top store season. This priority, ever we as First, the shoppers banners deliver time great to destination and a that important excellent they for throughout I value be it consumers this our value holiday

better across loaded as good, quality is marketplace saying and best all absolutely year I've branded with Second, been merchandise long, brands. the

gifts this Importantly, this has believe offer us set assortment will season of holiday that we very excite inspire well shoppers. and to up an our branded excellent

our multiple week, which of I times that our is Third, want plan many compared retailers. to stores online and a we key a highlight fresh business product to to other flow to differentiator

be am With are changing they that they satisfied the rapidly confident assortments time gift to I see merchandise every very with the visit. shoppers mix, going

Our store fresh stores. presentations organized our excellent flow are creating throughout managing at shopping teams this and

campaigns shoppers they great of that when new This across believe campaigns help get Next, value of marketing visit. each leadership our money more banners. drive each reinforce our launched. for shoppers traffic and can our that holiday divisions we We just both, will about existing and our their feel from these year, can emphasize

of We holiday in the of Canada, are place and also stand retail with banners, to Less, Spend portfolio brand highlighting the helping we Get as plans us building drive fresh strong our all such efficiencies and our merchandise throughout the More, and to for messaging U.S. help strengths season multi-banner are the awareness. marketing Long. comprehensive In flow we leveraging out. Season have campaigns, retail Further, All

I can of year really business from retail are of has our in us fourth allowed for any extremely manage beyond. quarter to past Lastly, to XX type the that that years. of may some we the that retailers flexibility against emphasize model through every the other we confident and promotion level we successfully operate want our promotional environment see business

and Looking see we business we on for that the our are well beyond opportunities convinced capitalize this term. are up growth set we long the year, very in to medium

around believe have remaining well we drive hold overall is more issue traffic continued many to market and experience plans. opportunities product history, income customers pricing growth inventory key treasure confidence which will across our visible the share. to will has where In our we and believe believe retail quality-branded even reiterate see the a reset our sales in On business. hunt to never top to Throughout we We of to value we has of line, attract our compelling potential support our that growth availability world. been store advantage environment many long-term I geographies our proposition us. and current wide as are a be for been Further, we want our demographics, positioned consumers an of shopping range appeal. tremendous additional higher, in we capture a substantial availability

marketplace from of countries. vendors a expect that more Our XX,XXX X,XXX merchandise could and buy, approximately and XXX more we to we There over buyers the always universe than continue. has significantly in been from than source

to As XXXX. would XXXX committed a be clear, pretax XX.X% to our be that level. to by margin profitability remain outlook, fiscal returning pretax fiscal we To margin our

years, merchandise Over across of divisions. two the additional our next plans our margin all assume opportunities

to will next freight our a that year. and expect expense overall also headwinds moderate be We tailwind

increase single-digit each to low comp two Lastly, store this years. next outlook overall assumes return the our of in will sales a that

Turning report business. to published Goals, Development and report globe includes XXXX with four and focus, and am The an communities, data work on Sustainability continue Board. available this for and ESG share progress Global of our to which to corporate Initiative, global variety responsibility. summarizes report and quarter areas around progress This Accounting do Nations and work programs to disclosures of Standards maps the you including sustainability is corporate our proud make our a and responsible tjx.com. environmental past of teams initiatives, to grateful The XXXX that fiscal frameworks, workplace, the to and I our they our are in within responsibility Reporting I'm appendix Sustainable was pleased the global We're priorities. our our support standards and United to ESG initiatives

we in and invite led results full we'll work always, the closing, world update continue to strong to that to to want next report, our you hard As the visit our their thank third our over associates I to tjx.com all read of quarter. around year. site again the In for the

the of am put holiday the operate believe different and advantage their of Further, all I'm best of our to season. Our TJX believe truly and this major I apart and position us our set I expertise have in for allowed promotional flexibility and teams has economic, areas our us an will some in talent convinced is across excellent depth retail unmatched environments. to all the driven model knowledge off-price continue of business. forward. retail that of convinced many and to we I associates our successfully us commitment execution. off-price have going be strong and that value a in have

historically impacted in outperformed environments factors, and have are we good XX-plus-year bad by history. our we throughout both, While macro

on execute plus billion company. $XX plans our TJX increasingly We and profitable to long-term are growth into an confident short- can we that build revenue

open Now, it cover our I'll back Scott and for turn full fourth the quarter questions. year call Scott? guidance. then, we'll to up to And

Scott Goldenberg

down sales flow-through with again, U.S. the down quarter. down We to full X% I'll for guidance them comp Ernie. to of now previous comp be X%. expect year. Thanks versus our now fourth guidance X% our our start year down full outlook our and third increased for to This increased of X% expectations U.S. quarter above-plan and the sales the reflects

$XX.X of exchange our previous now in the impact we're TJX year, change is full planning foreign due the our reported sales our that sales. fourth to unfavorable to $XX.X will rates billion quarter versus forecast range The For negatively total billion. guidance

year year the range full a of maintaining adjusted end anticipating margin X.X%, we're For high guidance. X.X% pretax of margins, to our full

year X% over due we unfavorable previous a the expect share, an full The negative per $X.XX to versus impact last up adjusted is to earnings to range rates. to high from For $X.XX. $X.XX end X% million, guidance change foreign which $X.XX now incremental adjusted of exchange our is year's

this Excluding impact, incremental be would of adjusted foreign end exchange exchange our guidance high foreign the unchanged. EPS

anticipating of returning wage purposes, to X.XX of We For XX we're of programs. expect costs. approximately Also, net fiscal In to XX.X%, incremental through of count approximately share to tax and the 'XX, shareholders an remain X.XX for basis points we repurchase currently to cash XXX freight buy modeling expense interest $XX basis year, X.XX stock million incremental full TJX we're adjusted and committed of rate average assuming points of stock. weighted continue a approximately back to and dividend our billion. expense

to Now fourth quarter. the

we sales increase flat up to For X% our the over year. open-only are U.S. store plan comp fourth XX% store outsized last to for U.S. sales comp quarter, be an increasing

in in planning in billion we're fourth the pretax billion. fourth X.X%. timing quarter. will we of quarter, the now most now -- Next, now the planning -- quarter, $XX.X our sales range that are out assuming This expense third assumes fourth the total of fourth the expenses TJX in X.X% quarter In outlook benefit range the to margin third reverse the we're -- to quarter $XX.X of of

flat. purposes, approximately and costs share currently average X.XX rate approximately weighted a headwind net of also quarter, we're fourth million, be We're billion. incremental interest tax modeling $XX and For from anticipating the of of in expecting income a count freight XX.X%, wage for a to

most EPS assumptions, quarter of fourth benefit third assumes all -- we're outlook of benefits timing As of a of planning This $X.XX now will result $X.XX that these share. to quarter of per expense of reflects impact we out reverse also and great and closing, due position an quarter I in rates. highlight grow financially to expected our want exchange that foreign the to are operationally business. fourth In in unfavorable to the

investments of cash significant balance shareholders. strong simultaneously Further, outstanding support to extremely very making business continue the and while flow. a to have We sheet well up are we growth generate set cash our to our continue returning important to

Now, call every limit person, quarter, will your can. questions it Thanks. we questions. questions. up analysts from do keep so to we many for ask to as schedule you questions going we we're And take now, happy that open we're as And the and commence your please on we our per to one as can

Operator

Omar [Operator Instructions] from Our Saad. is question first

Omar Saad

to little business, you Thanks look for a bit about the the if seeing macro taking the talk question. you're other a pulling your at Great in my that consumer, showing inside whether the in quarter. and channels? job whether you're more your Ernie, a business for lens up resistance business your products? Thanks. you take consumers still could maybe any for trade-down effects any And some or pricing put to premium you also

Ernie Herrman

the success Thanks, in the it. Omar. Well, of hit seeing in little And macro lens, I the we regard would very pricing, with on are on terms is resistance. say very, rate our measuring XX-plus-percent to

in script his talked about think, a turns fact, they and at which are Scott always point, one barometer. FYXX, I our essentially where In were is how

we a So, the level. down SKU and pre-COVID, we all at look way get to

have up effective hit to obviously, really we've have where and of where And at the then gone So, zero-in significantly, the much we we retails and SKU because happened we at categories, it And retail. we so around adjusted been look at level. us resistance. what's so apartments go we extremely look on low

up doing more, opportunity and spotting can as as where we're lot keep also move I for go again. you a we guess, we've gone it, can retail we So, to forward places imagine, we've spot because up

you price intermediate couple remember, or have do the hard we up raise, is unusual an inflationary gone apparel So than a because dynamic, price which more just of points and been point goods, that of it's the have a X% lines, some sometimes hits whether little because have or X%.

up some price the gone that items or have XX%, there So, up first point. only and gone XX% are we've

opportunity definitely Scott? in stance. terms pricing all of there, So, if all, Omar, in more anything,

Scott Goldenberg

Yes. Omar. Hi Scott.

at The other quarter, thing, the this Marmaxx. consistency. and last we Marmaxx said example, and of had some I'll the in as outperformance terms use sales, we obviously, our It's

of not across necessarily we way at stores, same that as our it volume. the you goes our would strong across asking back any improved the across versus our rural, up. level numbers you trade we saw down, what of think Ernie it regions, expect, saying teams. it, locations, just and across Most the that buying to saw has on of Almost allocation was the consistency urban, departments consistency. any. went a saw I And been age of So as planning look and second suburban, overall quarter, But just execution

Ernie Herrman

the do sector we're a not makes can. what broadly Omar, mean, best it a or as different nature as good, tried good, script probably better to demos, we levels, And thing, a after way, better not Scott little one by in is income all of we if to makes of levels. goods. one because that before, to said, I trade emphasize emphasize go demographic. not a -- we're of certain or so going going tougher down trade don't there try after age we the We're the interesting the about best it read strengths. between talked to it this in and trying after little that trade we're We've is The it the broadly I fact our we brands, enough -- it the biggest, and -- we biggest

one in we've And fact, cases could think some the that so makes trade-down see think if taking means because down -- it's taking retailers, necessarily level, buys when, to from I tough in sense. I we some actually a you had every at are see not in which week good other trade good cases, list from I some area great we're sideways,

we're well So going offering TJX serve in having a market of again, best good, think is I wide advantage to to continue share. taking better, on the

Operator

question Our is next Hutchinson. from Lorraine

Lorraine Hutchinson

inventory on what to you're there a wanted packaway that of seeing were in dig like? pockets particularly Are you from And look further. the deals your spring preclude great capacity If volume does purchase of does large inventory, little product, home? then bit a to in holiday? I of excess you during some any taking advantage of

Scott Goldenberg

prompt how first been. the overall to Ernie actually I'll about actually that's talk and markdowns

Ernie Herrman

Yes.

great question. so Lorraine, think, I

timely with, One of And think, I than because I counterparts markdowns fast. there, turn is is we guess, the liability of different you're well, board throughout as the becomes also some of, situations our extremely what the counterparts, things those something so -- end And you'd clear think inventory, fast, inventories take that on aggressive not we we up touching our we just a turn we all you think of I if do, even it across fast. kind know, off-price, with call of that, year. know, it, we home on I you

We if anywhere, markdowns high there probably standard as as so. have taking more a not much on aggressive

any of we precludes issues the in never so, or us in inventory opportunities have other it stores we're our very always advantage quickly. And because taking addressing market

way, within that by or Marmaxx Great every applies the brand. that it they really manage in model way, markdowns whether its I business, have, the another seasoning this And that HomeSense mean if we home in the have it's limits and by HomeGoods we box, take think the people the inventory or to think, home applies within it's not again, and is we as goes Canada where differently, question, it advantage. Winners same would Europe, does it to that excess situation anywhere and to I within execute similar do. the other talent online. So, aggressively as a or because And within any have it we the of

Scott Goldenberg

Yes.

fiscal this about markdowns talking markdowns, our levels. year keep just we So the better talking than all year, has about 'XX rate our been

but higher we our have have that forecast slightly built would Although they than thought we each been and we largely markdowns had been what up. into where they've end you been give anticipated, exactly

year, chain there. have inventories our Again, reiterate, of surprises -- last we bit cash flushing inventory our bit quicker. -- the to this ordered in no the But receipts less we've to have as the adjusted the than so of -- to levels inventory getting receipts of obviously year in last earlier just expected And inventory the we down, our end what and at open So, fourth they been fourth in most quarter has come flow a a had adjusted pickup to that just we'll year goods, even our lot fiscal had quarter. supply you all 'XX. quicker came expect, want due a where inventories by the and again, both both we when will buys, than we really, than we improved great to to and compared compared

Operator

from is Matthew question next Boss. Our

Matthew Boss

Congrats on tough nice a and backdrop. a quarter

Ernie Herrman

you. Thank

Matthew Boss

the merchandise if as I acceleration in Scott, share in structural Marmaxx pre-pandemic? think relative traffic. above then holiday? drivers And could remains help Maybe comp if to XXXX quarter cited through maybe what walk to of to And levels. improvements just positioned you are notably, So I Ernie, materially sequential you you that you the the margin, in you see improvement freight, progressed? speak guess, could exclude model you see take how

Ernie Herrman

Yes. right. All

very the general aspects. our acceleration of apparel the getting is sales. we're Scott of and in outpaced you're in So on that Matt, our the regard I mentioned total to Marmaxx But and margin Yes, we first me think the what quarter, jump store. let and within some with go the categories, couple, with with -- then will at pleased some this,

healthy. you because means Marmaxx. that most share And course, apparel be the of but road. we in to happy, businesses, over It is was we the had healthy business we do more typically extremely just Whenever of some an is best traffic business the that, it's that not driving are gains our are for run also barometer with very year, market very When going down board, we us. across whole a home store indexing in in last is particularly our TJX, happy participating. that So,

when other any So, help the it, And think apparel that retailers. ask with I same what driving yes, story you categories is ironically. don't

to more in business. I mixed And out think performing on better brands. better, you -- different think you're apparel branded going good, hear every our reads of best the is this apparel as more division the I'll do way, the there content, results think by again, why give I I shines. we're come because Once the

brand-driven, have private non-branded-driven. three and it's after that to best. our And ladies all better kids go applies branded try apparel business We is our not whether a good, business. and levels our to It's not label really our across a it's men's So, focus. and or focus, or

buying I that's one that's your as in think there we now. order first buy close the sales have is applies to Marmaxx, buy at at just the we level think to normally the a brands on been we we driving open these how you're of available and to This is because some is And our that been shape. talk look or And to areas areas, are And amount can branded some need, we hardlines really The yielding all at happening accessories we going of think so our going areas. the I putting all I right in of position, what's this better great of across what that based see that to questions to because lot speak, I see. the content order to quarter the of applies So, we buys the apparel. asking, but new I'll And now in not why -- market, start here goods content future, open on into I was be margin. of really, in an let what's to a forward. those our the about areas harder branded really to marketplace on inventory look sales, again, our to can beyond still key. the also just Scott performing of see tech buckets, nature

Scott Goldenberg

I'm expert. not we're Yes. actually Well, why I'm better. buying the

So, I'll that. Ernie say let

Ernie Herrman

didn't mean for you Yes, to. I

Scott Goldenberg

Yes.

on I’ll a side So, hit bit there. technical the

when unchanged. look -- quarters, we we've in has August in what the last that the of the we largely, have -- the think since I said of back couple last as beginning retails for did our and year is been

What that the quarter was changed the buying and actually done -- through. slightly been we marketplace, the cost, last thought. raising So we're not what buying more when better. any basically because we're couple -- cost anything we that our thought have come retails our of up what changed than is The we we've has has been and they above or as the changing it's said, but been last haven't have really better, what haven't have quarters we loaded anymore -- over raised less than absolutely we They increases haven't thought happened. and we dramatically, have forecast retails

on coming -- what we're the this quarter. than a again, it's of fourth between and a is thought. again is the -- Some our and but higher, better in we we in freight more not but Markdowns than thought came third increase buying largely we forecast, retail actually little slightly where want what timing largely

same expect would again, markon. strong a the and quarter thing overall fourth margin better we have merchandise by -- to So in with the -- and

on have margin. merchandise I So, say that's to about all

Ernie Herrman

jump just I'll in, Matt. Yes.

buying I than anticipated of ago. effort are back I better think even terms two-pronged buying been saying The new months the continues. retailing. think couple we we But think and based a I had Scott's of in really that is environment a news it's market goods the on better the retailing

out Although that’s us to read more is that like of where so. about advantage models that there creating turning take in I think to of out inventory be true, that, -- anything for business you'd the availability part

Scott Goldenberg

about we also we was last saw Yes. contribution. a better We're home And back back it fiscal the 'XX. where significantly move all the the because half third were would back in at apparel it contribution as quarter we been this we kind year, as we've of home apparel getting of through year. higher And the we having out were end to helped thought from where the of

mix been retail. which certainly X%, change the it's apparel So, benefited from bit on home in the a a almost average point just a has X% contribution, on of us view

Operator

Roach. from now Our next is question Brooke

Brooke Roach

I to wanted year few XXXX. next follow level that a the you Ernie, and high of into up calendar on provided guardrails

be a driver strategy single-digit you pricing of or comp by major led As and And you've this be low takes do be this that branded will increase that that are sales banner? should the ticket any by next a contemplating there a ongoing puts you year, and increase in expect better and we balanced suggested traffic traffic, sequential to stores? as availability in result contemplate

Ernie Herrman

good are those high-level Awesome, questions.

long couple similarly it vary the our bandwidth of in is who is us one SEVPs vary this This all it's think right where have around say. than a with volatility much and out try or of year. to challenging part kind thinking initial out manner on us different to executed on, to by of comp. sales team a We've I things our we now, we've that. able I the of going to I the really does the some well. -- planned that, how said executing ticket. be going not it us what's of The going guess. team question But would first make for a a think, our flex. little happened kind all, the it's being pull I on are does of much be Having has execute by will Scott different who team, to first that combination. us to projected. his but benefit -- things on And to And and this all based We're going off year, a within the call -- best of for by I And They're have banner. the that executed is, first figure Hard of a us and a very had the but conservative are step what's our making banner. be forecast that narrow how to fairly we points, for where your model, to pretty past think think But it call term. been flexibility hard the could that expectations even little myself some on what's on traffic believe probably I is single-digit today strategically early traffic on from in is it not

on sure. only our thinking So they'll again, a initial now, little narrow vague fairly our I a thing The right can be similarly. that to on not because planned we're you I have in is, pretty tell banners is bandwidth be all

Operator

Our is Lejuez. from next Paul question

Paul Lejuez

I to to want just about. that spoke you go back benefit markon the

in helped XQ. said You it that

curious Scott, can to the If that been relative also what saw And you've detail maybe, been about what XQ and it's just in Also XQ, you. in helping markon expenses shifted were just there? any you give are you expenses, prior out could you But versus you the the about just the think frame how those? of Thanks. then, I into seeing? thinking XQ XQ quarters? of that benefit nature

Scott Goldenberg

between the the capitalized going expenses of the due or just of not into and detail We're and/or to one another. timing to costs Yes. related related get how quarter some inventory, flow items, multitude and they

that's that. really say So, all on to

three-year the and or of two-year items. to largely it of going a you it's whether basis nothing a on on really to if -- it basis In on at much a driven thousands three-year can't markon, add it's levels be similar terms there's by It more our basis, of strong markon, tens because of margin, down look break there.

whether quarters DC, we've stores been as expense about the So, higher getting benefit freight, to helps that's retail well. a the it's X in exactly it's but of and slightly over the combination of course X, as chunk to it's of again, and the a goes and some combination talked both. better we've average parse last the hard some a on out lines, Certainly, which, buying what the and a of it's having retail of good

Paul Lejuez

one just the could Got other If pivot Ernie. I it. direction,

business you over looking over business. some just feel what advantage I'm how the the seeing promotional there value, there's concerns, take in Europe. Just you're consumers macro maybe maybe positioned perspective of over to concerns is curious of a there out from for there competitive and positioning

Ernie Herrman

there here, at market and even of different there they more are by Yes. We a is even than serious, challenging. more time. about all From significant the you level retailer drops the Paul, it's this the have talk question. great or here. environment And

we been Our points we we basis competition is have there. expectations look performance basically the do the of what our to trending retail there. been sales market, our against and at ahead XXX X,XXX sales below have But

we share the actually relatively way there. and us. speaking, significant the So, But we getting are there our hit like -- is gaining don't market consumer affecting

that and our can’t footfall do off, can that do control gain and share there in environment -- liquid conversion demanding So, measure extremely been of We looking the going And we're the stores. has -- over the we with terms a Being can't We level or type of off execution and the year two healthy and staying is our little next to the market and more there for they're of type stores, the patient into to as the outlook continue same traffic. things we here. not our advantage model same control. take when there.

very a they're when similar very store, is news is buying good and with are the customer conversion happy rate the the mix So, before. to they our at in they find,

the for So for off. footfall off is it The issue. -- than less the is is And competition. issue but that's us not it's

So, Scott…

Scott Goldenberg

probably many there other over as the more in for for is, the But have terms getting more retailers. it's vendors better certainly best in share of me. past environment certainly mean over fair even many can I better Yes. and after Ernie we most probably and new given we're and the -- thing our there, good, as difficult quality. of adding in jump the and even branded And -- it's

Ernie Herrman

Absolutely.

Scott Goldenberg

about and obviously our I of we've lower advantage leases that's -- getting good And we're -- relocation of the when environment, given both taking at we still when come. rates rates So, think this before, the thing. opportunities talked

can. costs, the that we So, we're taking minimizing of of those advantage some aspects

Ernie Herrman

level brands talking deals there's was after this Paul, up was go best point Scott there over you The Yes. the from disproportionate had wouldn't how sizable that good and of all as We've what of vendors bringing normally better, is wouldn't about goods have opened we some a and -- we situation good, a best, we some a open there. three. do amount like and have in or better seen recently. have some I

So, marketing that truly form our of our long a bodes -- best our capturing the well. for customer all term. That's and form of best

So again, anything we -- we we'll have we'll I we're to the execute mitigate range or And always the think weather margin business any because that we'll like and and just way stay patient do. clean. keeping

Operator

question is Altschwager. next Our Mark from

Mark Altschwager

you've and few some talk you're Ernie, that I opportunity and plans trends the you've years. a terms years bit incorporated with of position the then this in into about learnings last assortment of the over what how next freight Can thinking Thank you your quite support the in that seeing marketing year to you're And the confidence? just freight, versus year? emphasized recent your from holiday for on gifting color you. Scott, guess, recapture inbound respect first any further about domestic expenses,

Scott Goldenberg

freight over we're But, when of would go to are of XX.X%, time. Yes, benefit. years it we those to back switching really year thought of to of that guidance -- we at what point over what go demerge significantly would that. over factors years or than we so a see were due it's we as two course details, half major going the some will assuming February consequently of changed over impact the of on the and ocean -- into and the we're have, -- a the two that this more thought so out But obviously, for as think the 'XX certainly or third stated tailwind, other and happen changes not it's the no from built over in, the -- long-range on down we definitely some been quarter. giving yes, year. a tailwind two at quarter some from we or I yes, certainly versus still whether freight next there's the do but more give in specific to And none And on it have give 'XX last call. ‘XX we happen last over freight the currently when thought giving year years guidance intermodal we Sure. fourth not the going some contemplated going factors what detailed this to largely the next the we earlier, more guidance But we into that less freight the

Ernie Herrman

entertainment buying been comfortable us talked have very even our geography every and gifting we're for I that gifting hitting as every in, from in we've neat, really and about we think, we've -- gifts audiences us. banner we're because that the question What's yes, for last have but years. younger on position, cooler talking for we few every so year cooler about what all talked Mark, about we've are our a that, become now done

happened And handful the a over present think COVID phenomenal them and a I our from on let's have experience that's up X register X or years really our all execution credit Maxx, in-store store whether for beyond start is, a and -- -- T.K. it, presentation Sierra, HomeGoods division on lot it certain name job in in I of store good, level. ops we and organization at of items. -- does Marmaxx setting tables a, the and do well a gift-giving years, store, the is teams the an the our with toward we where accelerated mentioned I script, store over Winners, big you And goods. this gift-giving and impulse and that's last did it's thing our the best knowing a every our from with they to gift and giftable put just what better to they are stores board or And catering features items the really and and how with up ago. we really across field amazing give setting during

now we are ever. Secondly, more branded than

applies gift and So, a give feel gift on to income level, group, giving good label if lean a a a going It to want think that's doesn't you if you or this any generic. to towards age are gift any about just to any give ideally gift. demo private -- of branded you kind

holiday, do to And for we our as ever, business branded gift this the third a year is Christmas. will amount we a well I more aspect While become tried think even then, lot to done get back done little to every to is in that we've closer year. we -- It moves closer and gifting going bode gifting of than Christmas terms that's significant -- of be then is bit. every

a little steam of bit And last so year, of we, out towards ran right Christmas.

bode year sales, have before this in for QX last week we especially think this is going I or flowing right that our well opportunities quarter fourth are going after which goods gift-oriented our of year, branded two fresh Christmas. one think the in to we later, which are significantly So, coming to is

for at year it. last year grab to continue thought think I year on This really -- holiday. two think, get to those we destination. of again, us we've that reasons comparison. But at better I of Even more every not been really ago, last about every why So, a share touches this are market I and is better years year one, intend as gift though were why doing

we're that. I think now absolutely becoming

for you Mark. thank the question, So,

Operator

Binetti. from question Michael is next Our

Michael Binetti

congrats on Congrats the on add next steps. to I'll And to you have quarter. my a Scott, here nice

first three-year near-term bit deceleration quarter. to just three-year in little are your third the of that you a you're like about rate comp half looks source that it's any Strong expectations seeing conservatism you rest just taking Scott, was of on exit hold quarter, guidance the a consensus back? that the looks of the what then, throughout next X% said a versus little comment a said for math in rate. from in you November that's U.S. think want I if the year. one, -- on on expectation, to combined the And rate, a increasing I think the Maybe model, X% business like on a

things. of a looked number You at

You're I make about it. you want to just sure think reasonable. comfortable that's with/excited

Scott Goldenberg

Yes.

We getting to we're year haven't from after. how on given breaking out any the the next XX.X% guidance or year

we -- next don't any share year. both quarter breakout to at have have details we for So or haven't this by on the point

or quarter, the the start In terms as But, unseasonable on, to U.S. this our the have overall of U.S. fourth fourth been QX increased last comp improved so. over -- that early there factored day guidance. this however, some the into weather has your comps quarter, question was

So I all guess, again, we've contemplated. what just what factored into we're --

Michael Binetti

to you a further at long you're assortments? you I best of with one on year branded bit via visibility out. you commented I'm assortment follow good, you think goods buys up the having on, how sense. this that have point? into And do great these have next branded packaway of -- better, this your Do great fall into maybe visibility how wondering to long just going Makes Based have could little

Ernie Herrman

would well flooded to continue ever there has I think at the which had will level buy. the And more market here, we than unusually so good only type as said hard to surge we the script, term. have better, -- buy. always that best Michael, we've content has for of can recent prior than availability there of as to the really availability. XX-something out it's thing that visibility Yes. I the say, is I been would is to across that more years in could The long It's

even our there thing didn't has our don't get changing. seen So, vendors, I -- to and ever other Even here's earlier. recently that this down lean give I'll and availability have during thing, it before. as comes them COVID, One little. we've over we happened more even out if you see become -- And the and I important a the than and if merchants as mention to for that

first relationship of of ahead, their that I talking, a without for So there more call, their perspective, become we're we always the them. a goods they if become most to different branded just market, the going a on to we from again, most we imports cuts get even and as we're which, have I'm doubt, know have important are aggressive like the be think cuts for them to those think important that for some liquidate to

our there So, we I even know are that when they relationships more ever. so -- than think better now

Scott Goldenberg

you were packaway, the about asking level the packaway? of Michael, And

Michael Binetti

already the deployed the next you that I'm of very clearly for -- got fall that just goods can the today. good and wondering you're season know branded goods about amount be year that packaway in in excited you've if content if

in have packaway before today able fall. that to those visibility you'll goods have You be today next visibility in-store

Scott Goldenberg

Yes. point we We're at of than lower slightly in time. a this not at We're packaway probably would high or even what level -- have been.

or it's what for buy the on rest So more on the could year… of come will the we

Ernie Herrman

What the in of middle right is, jump we're still on I'll availability there the -- now just typically, we're that. happen because in could November. of is

the You're in goods. Michael, time, using actually you're when this

goods. prior. there's My -- later and as start gut that And these to So, to get away. you maybe say category a that packing kind through we those December, current than there I -- you you me going of going saying, at you wait be it, of from would buy vendor left. lot now in goods for you there's don't am to through go as look of okay, more was you toward don't that

not right said, So, we don't as now, -- we're that. Scott see

what's guess next pack Christmas last fall out I than coming would on would for did we out will there, there away based of this Just packaways however, be more year. that we

Operator

Our Grom. Chuck next question from

Chuck Grom

tough you a you not. that's guess, it out, has may your and peers to consumers when to dollar case And clearly called you look the have that? start during call you it trade do think ahead, good when different stores have I for see started curious Typically, today? Walmart out, but on the down think economic not you why times, I'm quarter. you guess, yet. that's but these I Congrats And

have history the on So if when in And think I just you sense to any curious guess, the you think on it you based might come? it business? of it's if start see

Ernie Herrman

it's I we're think it's it's it if -- to for just Chuck, getting or I not read across hard trade-down guess, the Yes. if board. us

-- So to because trade-down goes buying we of -- trying read before we buy again, trying I every -- service good, if it's so we're say across think we better to to that that what we're can't part were almost is customer.

we is, So, share from what the sideways. now, gaining happens I trade across think get market we're board. Right

we're not say of a Scott call of read we trade-overs, for getting wouldn't the which guess it. region, us created mentioned, might I can't we're many would telling that's piece by kind everywhere. It's say region, look you region to -- just of down. -- might I by not that's little down, I out would hard too trade even and you I closing that you stores think would trade so, And some is the if some any of where at difference look be we're where have getting significant seeing Scott? the a seem

Scott Goldenberg

Yes.

market the little you were If XX, demographics people years during was overall was it XX the in and it again, you impact pronounced last more income go a history, where recession, more and the -- pronounced -- higher back at given those demographics. stock

Ernie just think said the than -- so so across across more we the it just may It's noticeable. getting from board I top be it and more it's right. So, consistent, end. Again, it's just

Ernie Herrman

question. have think time I we more for one

Operator

much. Dana from for Tesley. the you question The Thank final very day will be

Dana Telsey

goes the and exactly path John, what that home Can expand Scott. you a I forward? you're congratulations, coming from, go you more you opportunity see -- that should from you. how margin Ernie, and bit we business, to But saw mean, be And you apparel HomeGoods the what back on Thank Hi. home mentioned over of in congratulations, index. and versus and seeing it apparel? there normalized improvement what expecting little and

Ernie Herrman

Yes.

is for going where and Dana, at margin, forward. getting you're So sales

much there enormous year year, you that's always those year hoping some and good our on freight buy which trend -- Again, businesses. opportunity because again, categories freight in toward rest sales more The outpacing We know, dropping close feel still we probably seen comps of business, upside with the adjust in of seeing up news to everybody. mouth is said was far what Margin-wise, more forecast from of hand of next to other around at we board, generating of business hope. that if that's home It there's impulse, good earlier, the And across because it looks moving so just wouldn't And back environment. business we the we our yes, built We're as increases we're with the Our starts so newness we'll But what to of be -- again, single-digit in. look tough what's not bit a in The retailers much the but business. as was is that forward business some going and as this we're back kind there. to against we an apparel us and get would business some outlook start we Good right newness as are I reason barometer. our to not than -- beauty there's to low as bodes were all is as that that, our an a feel the volatility home we as what's impulse on bullish a outlook SKUs we like across board. do consistent business. -- -- well and that I've to play now. by accessories to home as has because of should I on a other our have a track significantly so our question. tailwind. happening well feel And so as business the becoming that hit the most home next we our

Dana Telsey

you. Thank

Ernie Herrman

us for Thank to you. today. today. was I'd like think joining for last our all that you thank I And question

updating We again will earnings call February. you in be on fourth quarter our

So, thank everybody. you,

Operator

and conclude today. gentlemen, that Ladies for does conference call your

may participating. for You very disconnect. much all Thank you

Ernie Herrman	President and CEO
Scott Goldenberg	Sr. EVP and CFO
Jeff Botte	IR
Omar Saad	Evercore ISI
Lorraine Hutchinson	Bank of America Global Research
Matthew Boss	JPMorgan
Brooke Roach	Goldman Sachs
Paul Lejuez	Citi
Mark Altschwager	Baird
Michael Binetti	Credit Suisse
Chuck Grom	Gordon Haskett
Dana Tesley	Telsey Advisory

The TJX Companies, Inc. (TJX) 16 Nov 222023 Q3 Earnings call transcript