TJX Reaches for $40B in Sales

As TJX pursues an aggressive domestic and international expansion strategy, CEO Carol Meyrowitz claims the company can become a $40-billion business.
The retail group could operate as many as 5,100 stores total, Meyrowitz recently told analysts, which is 60% more than its current fleet of stores and only includes growth in the company's existing markets. "The most significant driver of this increase is our belief that Marmaxx can be an even bigger business and grow to 3,000 stores," she added, noting that figure is 1,000 greater than the number of stores it operates today.
In Canada, TJX said it could grow to about 450 stores, 30% more than the current store base, reflecting the potential the company sees there for the Marshalls brand.
E-commerce is another area ripe for significant growth as TJX has only begun to explore opportunities online. September's launch of was "strategically low-key," noted Maryowitz, but customers are responding well and e-commerce is postioned to be a "long-term growth catalyst."
"We will continue with our deliberate approach and plan to grow smart," she said. "But we are very excited about giving consumers the ability and convenience to shop 24/7."
Sierra Trading Post also began selling online in a "smooth transition" to e-commerce, added Maryowitz, who noted that online operations could be beneficial for all TJX brands.
The CEO believes TJX maintains several advantages that position the company well for so much growth. Beyond its mission of offering "extreme value," the company's four large synergistic divisions are feeding off each other to drive growth. TJX employs 900 associates in its buying organization, has developed a robust global sourcing network over 36 years and works with 16,000 vendor partners around the world. And the company continues to invest in its supply chain to ensure it's shipping the right product to the right stores at the right time.
The company hopes to ride strong third-quarter momentum — which saw consolidated comp store sales rise 5% year-over-year driven by increases in ticket price and traffic — into the holidays and become a gift-giving destination during the season, added Maryowitz.
TJX forecasts fourth-quarter earnings per share in the range of $0.77 to $0.80, down slightly from last year's fourth-quarter EPS of $0.82, which benefitted from a 53rd week.
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