TJX (TJX) owner of TJ Maxx, HomeGoods, Marshalls, etc., recently saw a surge in sales and is confident it can maintain that momentum even if President-elect Donald Trump approves a policy that some retailers say will have a negative impact. their consumers' wallets.
In TJX's fiscal third-quarter earnings report for 2024, the company said overall comparable-store sales increased 3% year over year.
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Specifically, Marshalls, TJ Maxx and Sierra combined increased their U.S. comparable-store sales by 3%, compared to the same period last year. Additionally, HomeGoods and HomeSense U.S. comparable store sales increased 3% year over year.
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The sales growth contributed to TJX's net income of nearly $1.3 billion, or $1.14 per share, during the quarter, up 11% from what it earned during the same quarter in 2023.
TJ Maxx could benefit from the 'chaos' of Trump's tariff proposal
As TJX sees an increase in sales, it says Trump's proposed tariffs, which include between 60% and 100% on all products coming from China and between 10% and 20% on products imported from all other countries will actually help their stores prosper.
Tariffs are fees that companies typically pay to import goods from abroad, and the additional costs are often passed on to consumers, resulting in higher prices for goods/services.
During a recent earnings call, TJX CEO Ernie Herrman said the company imports a “very small portion” of its products from abroad.
“Most of our inventory is purchased from brands,” Herman said during the call. “So we don't even have visibility into where those products come from.”
TJ Maxx, HomeGoods, Marshalls and other TJX stores primarily rely on brands with excess inventory and other supply chain disruptions to sell merchandise 20% to 60% less than their full price.
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Herman said the proposed tariffs could push their manufacturers to order their products in bulk in advance in an effort to avoid paying the additional tax once it is officially imposed. It claims this could create “additional availability of products at advantageous prices” for TJX businesses.
“When there's a little bit of chaos in the market, if that happens a little bit in certain categories, ultimately it's usually an opportunity for us,” Herman said.
Retailers sound alarm over Trump's proposed tariffs
Some retailers have recently been warning consumers that Trump's proposed tariffs could force them to raise their prices.
For example, Walmart (WMT) Chief Financial Officer John Rainey issued this same warning to buyers during a recent interview with Fox Business' Liz Claman on Nov. 21.
“The tariffs are going to be inflationary. There's no doubt about that,” Rainey said during the interview. “Likely consumers will pay more for the items they pay for and to which these tariffs apply.”
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AutoZone Auto Parts Retailer (AZO) He also warned investors last week that his clients will foot the bill for Trump's tariffs.
Steve Madden Shoe Retailer (SCARE) It also recently announced that it will reduce its purchases of Chinese-made shoes by 40% to 45% to avoid Trump's proposed tariffs.
“We have been planning for a potential scenario where we would have to move products out of China more quickly,” Steve Madden CEO Edward Rosenfeld said during the company's Nov. 7 earnings call.
“We have worked hard over a period of several years to develop our factory base and sourcing capacity in alternative countries such as Cambodia, Vietnam, Mexico, Brazil, etc. And as of yesterday morning, we're putting that plan in motion, and you “We should expect the percentage of goods we get from China to start declining more rapidly in the future.”
during a interview With John Micklethwait, editor-in-chief of Bloomberg News in October, Trump claimed that he is proposing these tariffs in an effort to boost business in the US.
“The higher the tariff, the more likely the company will come to the United States and build a factory,” Trump said.
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