TJX Group, the leader in the discount retail industry, has the most international business and the most powerful e-commerce, and performed best during the holidays, although in some ways it still fell short of analysts’ expectations.
During this period, TJX’s net sales rose 27% from 2020, 14% from two years ago to $13.9 billion, and open-end store sales increased by 13% compared with two years ago.
Net profit recovered to $940.2 million from $325.5 million the previous year, but failed to reach $984.8 million in 2019.
According to a research report by Jane Hali & Associates analysts, in addition to e-commerce and large store size, TJX’s advantages include several specialized household chain stores, among which Marshalls stores have a growing range of household items and are also an excellent sales channel for designer brands.
While TJX’s fourth-quarter results were rarely lower than expected, analysts at Wells Fargo believe the company is likely to gain more share in the current period of retail volatility.
“the last time something similar happened was in 2008, followed by a decade of low share prices and the excellent performance of its TJ Maxx stores and Marshalls stores,” Wells Fargo analysts led by Ike Boruchow said in an email comment.
If history repeats itself, TJX should be able to take advantage of the new high-quality supply of brands that enter the market after 2020, as its strong low-price business model is likely to further boost market share growth and push commodity profit margins to the company’s all-time high.