The TJX Companies Inc. (NYSE: TJX) saw sales slightly drop during the third quarter of 2021 while earnings benefited from lower tax rates. Open-only comp store sales were down 5% overall for the quarter even though the sluggishness seen in August paved the way for a strong recovery in September. The company also saw growth in customer traffic and average basket size.
In terms of assortment, TJX started focusing more on higher demand categories such as home, beauty and activewear which saw momentum during the quarter across Marmaxx, TJX Canada and TJX International. The company saw strong sales in HomeGoods as well.
For the holiday season, TJX will continue to focus on home, beauty and activewear categories. The company also sees opportunity to expand its market share in the home category which has been gaining in strength and as part of these efforts, it is increasing its home mix across all its banners to capture the demand seen in this space.
TJX plans to give importance to gifting assortments and opportunities for the holiday season. The company plans to expand and continuously replenish its product offerings both in its stores and on its digital channel so that customers can find new gift assortments each time they come for shopping.
TJX will continue to add new categories and brands to its online business in the US and UK and also expand its gift assortments for the holiday season. The resurgence of the COVID-19 pandemic in certain places has led to temporary store closures as well as changes in shopping patterns as less people are likely to visit stores frequently. This could boost online sales. The company is also planning to roll out ecommerce on homegoods.com next year which is expected to drive further growth in the home category.
TJX sees significant opportunity to expand its store fleet across the world over the long term. The company plans to continue opening new stores and relocating and remodeling existing stores to improve the shopping experience and drive growth.
For the fourth quarter, TJX expects overall sales to be negatively impacted by temporary store closures, mainly in Europe. For the first two weeks of the fourth quarter, the company saw open-only comp store sales fall 7% similar to the trend seen in the last week of October. TJX also expects to see an increase in COVID-19-related costs compared to the third quarter. Despite these headwinds, the company sees significant opportunity to capture market share going forward in various categories.
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