TJX FY 2Q17 Earnings Call Notes

Ernie Herrman – Chief Executive Officer and President

Brick and mortar essential

“The customer is clearly telling us that brick-and-mortar retail continues to be an essential part of the shopping experience and certainly when it is executed right with the right values. All of this gives us confidence in our long-term global store growth potential. Across the company, we plan to open approximately 260 stores this year alone.”

3900 stores today

‘Next, with 3,900 plus stores today, we are growing successful business with a global presence in an uncertain retail environment. We saw branded merchandise and vendors know their product will hang next to other great brands in our stores.”

Scott Goldenberg

Average wage pressure going down

Yes. I think a bit in terms of this quarter being somewhat similar the major at Marmaxx you would – in a world where merchandise margins were flat you had no wage pressure or supply chain pressure, you need approximately a three comp to be flat. Clearly, we have had both wage pressure and some average retail pressure. The average wage pressure obviously going down so there will be a little less pressure on the P&L going forward, average retail, Ernie early talked about earlier, so you would clearly need a bit more than a three comp at this point to hold your margins flat given that we still have some wage and some supply chain pressure due to the average retail. But the plans have been put, so I think that answers your question.

TJX 3Q17 Earnings Call Notes

TJX Companies’ (TJX) CEO Ernie Herrman on Q3 2017 Results

International is next major growth driver

“Our next major growth driver is our enormous global store growth potential. Long-term we see the potential to grow to 5,600 stores with just our current change in just our current markets alone. This represents more than 1,800 additional stores on top of our current base before contemplating the potential of new change or new countries. Further we see e-commerce as a complement to our physical locations and as a way to offer consumers the ability and convenience of shopping with us 24×7.”

No shortage of inventory in the market, which means we can hold less

“The market is ramped up a little bit in terms of more loaded market place across more categories than we have seen in the past. So as much as you will read that we tell you timed up an inventory, we are not running into that situation in terms of market availability in terms of what’s in the wholesale market. So that presents an opportunity for us to where possible run with linear inventories to take advantage closer in on the buying. So hopefully you understand, we are going to try to buy I guess simplifying it more hand to mouth closer in than we were a year ago because of the availability.”

E commerce investment is leveling off

“we don’t as others have we aren’t going in investing at the high service peak. So we are — I guess you would call leveling off on our investments there actually, because we are couple of years in on the business. So again very comfortable, we like the traffic we are getting. We like to sales the way it’s doing and on the flip side as you know what be coming up, be careful on your cost structure. So, in terms of the domestic e-com businesses which are really and STP, we have taken a hard look at the cost structures and making sure that we will keep our investment at a very appropriate level and in fact a leveling off level, I guess would be the best way to describe it.”

TJX FY 2Q17 Earnings Call Notes

TJX Companies’ (TJX) CEO Ernie Herrman on Q2 2017 Results

The marketplace is flush with goods

“the marketplace is so flushed with goods, we thought it was a good time to actually lean up our inventories a little bit more than we had been running. So that’s one reason you saw a little shift there where even a little bit more liquid than we were three months or six months ago.”

Macy’s store closings are an indication that there’s share to be taken

“Paul, good question, clearly, an indicator of the times that we’re in and the environment that’s out there, we don’t like to comment specifically on another retailer or what’s going on there. Under our big heading, you heard us talk about gaining market share numerous times throughout our call. That is still our focus. We believe any of the uneasiness that’s happening or any of the store closures not just Macy’s, anywhere across the board in this market. And there’s been a fair amount announced this year in FY 2017, let alone in FY 2016. And I think it’s what you’re getting at. We believe there’s market share – additional market share opportunities for us.”

If other retailers promote less it gives us a chance to widen the price gap

“So Michael, I mean, if we’ve seen some articles, lower levels of promotions, which fairly could to be tied to leaner inventories I think that’s what you’re getting at that’s what some of the articles that talk to. If the retailers in general promote less, there’s for us that widens the gap. So what’s interesting is as we look at that as still market share opportunity. And probably a little bit of margin opportunity and that there’s still availability out there.”

Plenty of goods around

“So Lindsay, also a good question. We really don’t like to comment on specific areas of where the availability is high or low, categories, et cetera. What I would tell you is it’s across all – most families of business and it is most price ranges. And it’s not really a – it’s not like [indiscernible] one area or another it seems to be fairly widespread. And then also, I’d like to keep in mind, there’s never not goods right, so when I say it’s up a level from where it’s been, it’s not that there weren’t goods before clearly because there’s always goods and that’s why we’re always holding the merchants back.”

Scott Goldenberg

4% comp growth

Thanks, Ernie, and good morning, everyone. As Ernie mentioned, our second quarter consolidated comparable store sales increased 4% over last year’s 6% growth, which was above our plan. I want to note that this reflects the comp growth in our brick-and-mortar stores and excludes our e-commerce businesses.

Did better than others in UK

” While sales in the UK were slightly lower than we planned, our trends leading up to the Brexit vote were very strong. In addition, we were pleased to perform much better than many major retailers in the UK as the Brexit vote weighed on consumers there. We believe we are gaining significant market share in this environment. This speaks to our resiliency and ability to drive sales even in challenging times.”

Other retailers closing good for our real estate prospects

“But I do think, as Ernie said, it does pertain well for us, not necessarily per se Macy’s, but the real estate environment as other retailers both – as Ernie indicated both in Europe and the U.S. too, feel confident in our store openings that we’ve talked about and hopefully even more in the future.”

TJX Companies (TJX) Q1 2017 Earnings Call

TJX Companies (TJX) CEO Ernie Herrman highlighted strength in the home category

“Let me first begin by saying that I am very pleased to start the year off with such a strong first quarter. Our momentum continued with consolidated comp sales up a strong 7% which was well above our plan and over our 5% increase last year.  All four of our major divisions delivered strong comps and again this quarter, customer traffic was the driver of our comp increases. We were particularly pleased with the strong performance of apparel including accessories and our home category.”

Overall traffic increased and volume increased but total price decreased 

“We were very pleased that customer traffic was the primary driver of our comp increases at every division. We also saw a strong increase in our units sold again this quarter. As we anticipated, overall average tickets decreased.”

Wage growth is a headwind

“Wage increases continued to be a significant headwind.”

“Wage increases continue to have a significant negative impact to margins.”

Remain opportunistic in terms of purchasing inventory

“During the quarter, we took advantage of some great pack-away deals. We feel very comfortable with our inventory liquidity as we enter the second quarter. We are well positioned to capitalize on buying opportunities in a marketplace with a quality, branded merchandize.”

TJX Companies (TJX) CEO Ernie Herrman highlighted the company’s flexible buying organization as a key competitive advantage

“We see TJX as a global sourcing machine. We have a world-class global buying organization with over 1000 associates located in 11 countries across four continents. We are proud of our strong corporate culture and remain dedicated to training and developing our buyers and next generation of leaders.  Our vendor universe numbers more than 18,000 vendors in 100 plus countries. We take pride in our vendor relationships which we believe are some of the best in retail. With a store base of more than 3600 stores in nine countries, we believe, we are an attractive and increasingly important outlet for vendors.  We buy in many different ways and offer vendors a great deal of flexibility. We are typically willing to purchase less than full assortments of items, styles and sizes and quantities ranging from small to very large. Further, we are straight-forward in our dealings and build mutually beneficial relationships for the long-term.”

Sees the potential to expand their store base significantly

“Long-term, we see the potential for grow to 5600 stores with just our current chains and just our current markets alone. This represents more than 50% store growth or almost 2000 additional stores on top of our current base.”

High loyalty amongst those customers enrolled in the company’s credit card program

“The credit card, we are certainly very pleased with our loyalty programs in North America. The credit card program in the United States that has HomeGoods Marmaxx and Sierra Trading Post as a portion of it. We continue to add a lot of new customers every year as we have for the last couple. Those customers – the one finding that we have are certainly the most loyal, they tend to cross-shop the most as they earn rewards when they purchase in all of the different banners. And again, we still think we have room to grow that and it’s certainly been a portion of the success we’ve had. So, again, opportunity is still there to grow that market share of that spend.”

Trying to be less promotion in pricing of their products

“We are trying to get out of the wild promotional up and down swings, because that is not the way we like to retail goods. We’ve been focused on buying off-price behind the scenes, buying it an off-price methodology, but the retail and the goods right now we would say it’s half way on the journey, because it’s still a little promotional on the website.”


TJX Cos FY 1Q17 Earnings Call Notes

Ernie Herrman

The second quarter is off to a solid start

“Looking ahead, the second quarter is off to a solid start. We see many near and long-term growth opportunities in the US and internationally to capture market share. As always, our management team is extremely driven to achieve our plans and we will strive to surpass them.”

We see TJX as a sourcing machine

“we see TJX as a global sourcing machine. We have a world-class global buying organization with over 1000 associates located in 11 countries across four continents. We are proud of our strong corporate culture and remain dedicated to training and developing our buyers and next generation of leaders. Our vendor universe numbers more than 18,000 vendors in 100 plus countries. We take pride in our vendor relationships which we believe are some of the best in retail. With a store base of more than 3600 stores in nine countries, we believe, we are an attractive and increasingly important outlet for vendors.”

See long term potential for 5600 stores

“Long-term, we see the potential for grow to 5600 stores with just our current chains and just our current markets alone. This represents more than 50% store growth or almost 2000 additional stores on top of our current base.”

There’s a lot of merchandise available

“we are in one of those modes right now where one of our most difficult challenge is controlling how much we buy right now, because the markets are plentiful and they are plentiful with spring summer goods coming up. Based on the environment going on that’s probably no surprise.”

Scott Goldenberg

Expecting EPS for full year to be 3.35-3.42

Thanks, Ernie. Now to fiscal 2017 guidance, beginning with the full year. As Ernie mentioned, we are raising our full year diluted earnings per share guidance. We now expect fiscal 2017 earnings per share to be in the range of $3.35 to $3.42, which would be down 1% to 3% versus $3.33 in fiscal 2016.

TJX Companies 4th Quarter 2015 Earnings Call Notes

TJX Companies (TJX) CEO Ernie Hermann says they have a business model which works through regardless of economic cycle

Consumers are loving our stores and shopping as even more frequently. We are convinced we are gaining market share profitably around the world.  In our 39-year history, we have seen only one comp store sales decline.  Our 2015 performance once again demonstrates the power of our differentiated flexible business model to succeed across many different geographic, economic and retail environments.”

TJX Companies (TJX) CEO Ernie Hermann highlighted the firm’s competitive advantages

Now, I’d like to talk about the major strengths that differentiate TJX from so many other retailers. We’re convinced that the same elements of our business that differentiate us from other retailers are also key to our continued successful global growth. Further, we believe these elements would be extremely difficult for others to replicate. First, we have a world-class global buying organization that I believe is the best in retail.  Second, our global supply chain and distribution network have been developed and refined over nearly 40 years to support our highly integrated international business and opportunistic buying. There is no off-the-shelf, off-price inventory management software to support a global business model like ours, which is why our proprietary IT systems are designed specifically to handle our off-price buying. Our distribution network can process buys as small as 100 units to over 1 million units from any one of our thousands of vendors in a timely and efficient manner and then allocate that merchandise to the right stores at the right time.  I believe that it is often underestimated how difficult it would be for other retailers to try and replicate these strengths. “   

TJX Companies (TJX) CEO Ernie Hermann noted he feels good not closing many stores whereas many of his retail brethren are undergoing significant restructuring initiatives

It also feels great to say that even in today’s volatile retail environment, we closed only one store last year. That’s on a store base of over 3600 stores. All of this speaks to the fundamental strength of our business, our disciplined approach to real estate and our decades of operating expertise in the U.S. and internationally. I should note that while we are opportunistic in our real estate strategies as well and see volatility in the marketplace as an advantage for our business.”

TJX Cos 4Q15 Earnings Call Notes

Ernie L. Herrman – Chief Executive Officer, President & Director


“For nine years as CEO and over a long tenure with the company, Carol has led TJX to great success with achievements too numerous to cover on this call. I am delighted that, in her new role as Executive Chairman, Carol and I will continue our 20-plus years of working together.””

Supply chain is competitive advantage

‘There is no off-the-shelf, off-price inventory management software to support a global business model like ours, which is why our proprietary IT systems are designed specifically to handle our off-price buying. Our distribution network can process buys as small as 100 units to over 1 million units from any one of our thousands of vendors in a timely and efficient manner and then allocate that merchandise to the right stores at the right time.”

Off price can continue to get bigger

“we would say off-price can continue to get bigger and bigger and bigger, and we are not as high on the full-price business for a reason. I think, in the environment that we’re in right now, by the way, I think the value of off-price business still plays better and some of the results that come out there, I think that will validate that.”

There’s still more merchandise out there than we can buy

“And we just never – sometimes there’s a concern, there’s going to be a lack of goods as we continue to growing out all these stores. It just, as you know – I think I said it like 20 minutes ago. We actually have to hold the merchants back still. There’s so much merchandise out there. We’ve never not had it be that way. It goes in waves, sometimes a little more than others. Yes, right now, it’s a little bit more of that mode, but even when it cuts back a little, there’s still more goods than we can take in. So, we’re just bullish on this model.”

It’s an environment with lots of available merchandise

“What we feel in general is an environment of, again, a lot of availability of merchandise. And so, we don’t know where that – some of it’s department stores, some of it’s specialty stores, some of it’s other types of stores. So, that’s really our only barometer. In terms of their promotional activity, again, not sure. We do see their ticket actually declining is our perception. We see – I would say not declining, but we see their ticket kind of staying into the zone than it’s been to last year”

Miscellaneous Earnings Call Notes 11.19.15

El Pollo’s (LOCO) CEO Steve Sather on Q3 2015 Results

We’ve seen reduced visits from some of our more price conscious consumers

“it was reduced the visits from some of our more price conscious consumers.”

It’s going to take some time for consumers to come back in and see these value initiatives

“I think it’s going to take some time to as consumers come in and see these value initiatives that are on the menu now as well as the service improvements that we’re making. And I think that’s just going to take more time to bring those consumers back. Let them experience that both on the price side and the service side and regain those customers.”

We’re fortunate that minimum wage headwind is being offset by lower commodity prices

“In terms of then managing pricing versus margins, I’m not ready to get into a full discussion about 2016 margins. One thing I will highlight is obviously we do have a minimum wage impact. Fortunate thing is on the commodity side, as we highlighted it worked 3% to 4% deflation, which were actually offset the minimum wage impact on our business”

Value conscious consumer is trading down

“when we did the research what we found is that we saw that the fact — the frequency has declined in our business, especially among we call more value conscious consumers. And we ask them where do you go instead of El Pollo Loco, it was pretty clear where they’re going, which was down to the lower end called the Taco Bells, In-N-Out Burgers and McDonalds.”

Burberry Group’s (BURBY) CEO Christopher Bailey on Q2 2015 Results

Impacted by weaker Chinese Consumer

“given the importance of the Chinese consumer to the luxury sector, our retail sales were affected by a slowdown in total Chinese spending. This reflected weakening consumer sentiment following the stock market turbulence and economic uncertainty over this summer.”

The US slowed markedly in the second quarter

“the U.S. slowed markedly in the second quarter. This reflected uneven demand from both the domestic and tourist consumer. The drivers here remain hard to read against a backdrop of a generally positive economic picture. However, we believe recent stock market volatility may have influenced local sentiment, and that the strong dollar discouraged tourist spend.”

The fundamentals of the luxury industry are changing. Growth is slowing

“current macroeconomic uncertainty, notwithstanding, there is no doubt that the fundamentals of the luxury industry are changing. Growth in Chinese luxury spending is moderating, competition in digital is intensifying, pricing leverage and space growth are tempering and customer behavior is rapidly evolving. For these reasons and more, sector growth is now forecast at just 1% to 2% in 2015 compared with 7% just a couple of years ago.”

Xinyuan Real Estate (XIN) Q3 2015 Results

Xinyuan Real Estate says that Chinese government policies continue to favorably impact business

“With respect to our operational effort on the government policies to continue to favorably impact our business. In the fourth quarter, we remain committed to driving performance of our shareholders with our quarterly cash dividend program. We will execute our sales purchase program as appropriate based on valuation.”

Bancolombia (CIB) Q3 2015 Results

Saw a significant depreciation of the Colombian peso against the US dollar

“During this period, we saw a significant depreciation of the Colombian peso against the U.S. dollar, which caused Bancolombia balance sheet to grow faster when presented in pesos. Let’s remember that the depreciation on an annual basis, it is 53%; and in a quarterly basis, it is 19%.”

Minimal impact though because operations are dollarized

“Nevertheless, despite every expression of assets and abilities into Colombian pesos, the impact in shareholders’ tangible equity is very small. This is due to the fact that all of our operations in Central America are dollarized and the assets that we have in U.S. dollars in Colombia are funded with liabilities in U.S. dollars as well.”

NIM was impacted by a raise in rates by the central bank

“A third topic that drove, and is driving the business environment today is of the monetary policy in Colombia. The Central Bank increased rates by 75 basis points over the last couple of months, which currently proceeds at a level of 5.25%. These increase coupled with our lower growth in deposits in the Colombian system and the higher stock of long-term debt caused the cost of funds to increase during the third quarter. As a result, we experienced a compression in the net interest margin during the quarter.”

Cresud’s (CRESY) CEO Alejandro Elsztain on Q1 2016 Results

Low commodity prices affecting our portfolios

“The low commodity prices are affecting all of our portfolio in all the region and there was a big drop that we saw on the prices mainly on the corn and soybean is effecting margins in all region too. ”

Good weather conditions for crops

“we can see how good weather condition in the region allows a positive start during this planting moment. Rainfall for this summer is above average as we’re going through a New Year. As we can see in the map Argentina presents good weather conditions in general particularly good in the Northeast of the country. In Brazil, even though the rainy season got delayed, the rains went back to the average levels along the normal soybean and corn productions.”

Copa Holdings SA (CPA) Pedro Heilbron on Q3 2015 Results

Latin America continues to be affected by slower economic growth

“Financial results for the quarter were in line with expectations, as Latin America continues to be affected by slower economic growth and weaker currencies. We expect the situation to continue in the short to medium term.”

We expect things to stabilize next year, but not expecting dramatic improvement

“we’re not building into our guidance an economic – an improvement in the economics of our region, we are expecting currencies to be stable, to stabilize, but we’re not building in a dramatic improvement to the economies.”

The Coca-Cola’s (KO) Management Discusses on Morgan Stanley Global Consumer & Retail
Sandy Douglas – President-Coca-Cola North America

Now expecting 4 point worse headwind from FX than expected on 3Q call

“Since our third quarter earnings call, the U.S. dollar has continued to strengthen. So while our business results are on track, we now expect a greater headwind from currency. After considering our hedge positions, current spot rates, and the cycling of our prior year rate, we now expect a seven point headwinds on net revenue and 11 point headwind on income before taxes for the quarter. Now, this is a four percentage point worse than the guidance that we provided.”

Consumers are moving to smaller packages which is higher revenue per volume

“The consumer is now changing. The consumer is moving to smaller packages. A 12-ounce can traded to a 7-ounce can is a 30% reduction in volume, but it’s an increase in revenue.”

TJX Companies’ (TJX) CEO Carol Meyrowitz on Q3 2016 Results

Carol Meyrowitz – Chairman and Chief Executive Officer

We like competition

“there is always competition and our job is to be outrageous value every day and have a very unique eclectic mix and that’s what we strive for. We don’t harp on we move forward, we don’t harp on the competition, we like competition, we like when we are next two, I won’t name certain stores, but we’re fine with it, it brings traffic and our job is to do a better job.”

JPMorgan Chase’s (JPM) Management Presents at the Bank of America Merrill Lynch
Daniel Pinto – Chief Executive Officer, Corporate and Investment Bank

IN fixed income trading you need to have scale and diversification

“when I look at the fixed income business, I think that, in my view the key of success in fixed income is scale. It’s a relatively expensive business to run and if you have scale, you can make it profitable. The other component that is important to me is to have diversification because when you look at what has happened for the last couple of years, two, three years, one of the challenges in business was the rate business. This year is doing very well. So credit has done very well in the last few years even though the climate this year has a bit more challenge than before.”

I do believe the Fed will move in December

“I do believe that the Fed will move in December. I think that, as you look at where the market is pricing today, is probably pricing 75% probability of that were to happen. So I think that the impact in trading will be not very relevant at all. I think that the Fed is starting to cycle.”

M&A is still healthy. Companies have to show growth somehow

“The M&A process is still very healthy and will continue to be so in the sense that companies will – the S&P earnings growth this year is zero when you look at the evaluation. So you would argue that companies need to demonstrate some growth. At this level of growth, in the United States for the economy, there will have to be a bit more inorganic than organic, so therefore the M&A will continue as long as funding and capital is available. I think that funding and capital is available. I think that the risk appetite overall has dropped recently.”

Walgreens Boots Alliance’s (WBA) Management Presents at Morgan Stanley Global Consumer & Retail Brokers Conference
George Fairweather – Chief Financial Officer

This whole industry is going to see reimbursement pressure

“I think specialty like other parts of market will continue to come under reimbursement pressures. I don’t think there is any part of the market that’s going to escape. And this is just the way of – the way of our industry. The healthcare expenditure here in the United States is still a high proportion of GDP versus perhaps what you might see in Europe where I come from. And I believe that what we are going to see in our market is continued pressure on growth in healthcare expenditure. We will see pressures in various reimbursements and then what we have got to do is continue to drive efficiency, drive the front-end profitability.”

Micron Technology Presents at UBS Global Technology Brokers Conference
Ernie Maddock – Chief Financial Officer and Vice President, Finance

It would be pretty silly for the Chinese to try to compete in DRAM

“I would tell you that if you aren’t in the DRAM space, it’s kind of tough to imagine finding that a particularly appealing space to want to deploy a lot of capital and a lot of effort in and certainly as has been released in the press over the last couple of days, I think there’s been some commentary made about at least one particular Chinese entity having not being interested in DRAM per se. But it’s a business that is quite mature. It’s hard to envision that capacity expansion will be required based upon what we know of bit growth and where we think folks would be on the technology curve. And I think whether your perspective is that DRAM technology is very near the end of its technical capability or not quite to near the end. I think there is at least some amount of finite lifetime that certainly [indiscernible] if I were thinking about a rational economic investment in an industry, it wouldn’t be one that is in this state of maturity, because I think the opportunities for success there would be pretty low.”

Still in the very early stages of understanding the potential of 3D X Point

“because it is arguably the first new memory technology in 20 years, we’re having to learn how that market is going to develop. And of course, there is a relationship between how quickly the market develops, how quickly output ramps up and what happens to cost as a result of that. So there are still a lot of variables at pay that are quite different than the visibility, the understanding and comprehension we have of the NAND business or the DRAM business. So we are at the very early stages of learning here”

E-House’s (EJ) CEO Xin Zhou on Q3 2015 Results

Next year’s real estate market wont be much different from this year’s in China

“Overall, we don’t think next year’s real estate market will be very different from this year’s. The main theme is still efforts encouraged by the government to reduce inventory, reduce the overall level of inventory. And we continue to believe the Tier 1 and Tier 2 market overall will be healthier relative to the Tier 3 and Tier 4 business, which will continue to experience difficulties.”

Staples’ (SPLS) CEO Ron Sargent on Q3 2015 Results
Ron Sargent – Chairman and CEO

Markets softened across all categories early in the quarter

“Early in the quarter, the markets softened across all categories relative to the trends we had seen during the first half of 2015. We also saw deceleration in our contract print business as we cycled a couple of large customer wins from last year and continue to feel pressure from the ongoing digitization of our forms business.”

I don’t know if there’s been a lot of change in corporate spending behavior

“from my perspective, I don’t know if there’s been a lot of change or differences in corporate spending behavior. I know in general, technology has been weak and we have had great success in selling products beyond office supplies.”

Office supplies down to only 45% of sales mix

“You look at the total company mix, gosh, it wasn’t that long ago, we were probably 75% to 80% office supplies and today I think that number for the whole company is probably about 55% office supplies and 45% BOS or beyond office supplies, and obviously, as BOS continues to grow, at some time point those lines will cross and will be more non-office supplies than we are office supplies.”

Macy’s Management Presents at Morgan Stanley Global Consumer and Retail Broker Conference
Karen Hoguet – Chief Financial Officer

Clearly the consumer isn’t doing as badly as our industry

“clearly the consumer isn’t doing as badly as what my industry, our industry is doing, because of some of the shifting in spending patterns of the customer. But that didn’t change between Q2 and Q3.”

Top malls are still going to be fabulous shopping experiences

“one of the thought from the industry that I hear most often is what is the future of malls? And we kept hearing ourselves saying, we have absolutely no doubt that the top malls are going to continue to fabulous shopping experiences.”

Wells Fargo’s (WFC) Management at BAML conference
David Carroll – Senior EVP, Wealth and Investment Management

I’m bullish on financials

“Personally, I’m very overweight financials; I have it for a long time. But seriously, I’m pretty bullish on the sector. I think institutions are very positively positioned relative to raising rates. I think if we do get any kind of economic expansion, financials are going to be the beneficiary of it. But, we are better capitalized more liquid than we have been in a decade. I think in our case, given the breadth of our business mix, whatever parts of the economy, you are experiencing growth we are going to benefit from it.”

DOL proposals on fiduciary standard have unclear impact

“Again we don’t know. There is speculation that this could be the catalyst for the demise of 12b-1 fees and other types of network — networking fees. We don’t know. So it’s kind of pointless to speculate on it. At the end of the day, we have enough confidence in our platform and in our client relationships. We think we’ll be successful.”

Tractor Supply Company’s (TSCO) CEO Gregory Sandfort Presents at Morgan Stanley Global Consumer and Retail Brokers Conference

There’s a lot of things that can’t be delivered to a customer via drone

“Omnichannel for us is a growing business but there are a lot of things that can’t be sold on omnichannel and delivered to the customer through a drone or through an easy methodology. And some of these things are things that are unique to Tractor and we have to find ways to get it to our customer.”

Philip Morris International (PM) Management Presents at Morgan Stanley Global Consumer and Retail Brokers Conference
Jacek Olczak – Chief Financial Officer

Russian market responding to price increases reasonably well

“So far the total industry volumes are responding to the price increases within the sort of acceptable elasticity ranges, but we’ll have to – I think Russia will remain one of the least of the countries to watch the next year. I mean so far everything seems to be working well. There is some down trading, but with the price increases which we are taking there, I mean obviously you will have some down trading.”

No Macro environment that really concerns me

“Nothing today stands in the least which would worry me. There are few places to watch, but I think it’s pretty manageable going forward.”

General Motors’ (GM) CEO Mary Barra Presents at Barclays 2015 Global Automotive Conference

More change in this industry in the next 5 years than we’ve seen in the last 50

“I believe that we’ll see more change in this industry in the next five to 10 years than we’ve seen in the last 50, but we are not waiting to follow, we are not waiting to be disrupted, we are disrupting ourselves because with all these changes and challenges there is also opportunity whether it’s the strength in the U.S. market whether it’s the growth potential in China although China is moderating and even with the non-traditional entrants coming in the space when you look at the assets that we have and I’ll cover them as we go through the presentation, we feel we are well positioned.”

Will be launching the Bolt 200 mile range

“And we’re very excited about the next generation Volt which is the foundational technology that enables us to be able to be launching the Bolt, and the Bolt will go 200 miles on a charge, this really starts to change the equation in all electric, remember the Bolt is extended range electric vehicle because once you get to 200 miles you really get to a point for most drivers most days even with unexpected, you’re not going to create range anxiety”

You could make the argument that sharing cars will expand the market

“”when you look at sharing you can look at it and say, hi that’s going to be less cars sold. But you can also say it’s going to enable people either the use or people who have some impairment or at an age where they are not able to drive. And so I think it expands the market.”

JS Earnings Call Notes TJX Companies

TJ Maxx (TJX) CEO Carol Meyrowitz said they saw significant gain in customer traffic to their stores, potentially stealing market share from traditional department stores and malls 

“Our 5% consolidated comp store sales growth over 2% increase last year continued our strong trend from the first two quarters of the year and was also well above our expectations. The comp was entirely driven by customer traffic. This marks the fourth consecutive quarter and traffic was the primary driver of our comp sales growth.”
The company continues to expand internationally at a measured pace as they opened their first stores in the Netherlands
“Also during the quarter, we were delighted to open our first store in the Netherlands and add Trade Secret in Australia to our family of companies. I’m very happy to say that we now operate in nine countries on three continents. The addition of Australia clearly increases our already enormous global growth opportunities.”
TJ Maxx (TJX) CFO Scott Goldenberg reminded investors that the company continued its streak of sequential comp store sales growth 
“Our third quarter consolidated comparable store sales increased 5% continuing our strong trend this year and exceeding our plan. This quarter marks our 27thconsecutive quarter of consolidated comp store sales growth. We were very pleased that customer traffic was the primary driver of our comp increases at every division.”
But they did see a decrease in average customer purchase 
“As we anticipated, average ticket decreased which was essentially in line where we had planned it.”
TJ Maxx (TJX) CEO Carol Meyrowitz highlighted the adaptability and flexibility of the business model as a key competitive strength 
Importantly, for the fourth consecutive quarter we saw an increase in merchandize margin. We continued our strategy of adjusting our pricing and merchandize mix to offer shoppers amazing assortments and value. As we expected this resulted in a lower average ticket, our gains in traffic, units sold and merchandize margins tell us our strategies are clearly working and underscore the flexibility of our business model.  We believe our ability to adjust our values and mix to suite customers needs and preferences, differentiates us from many other major retailers.
They are still experimenting with their E-commerce initiatives and think the channel is another way to interact with their customer base 
“Now to e-commerce, since launching two years ago, we have added more than 3,000 brand in over 25 department. Our e-commerce sites in the U.S. and UK have sensational gift-giving initiatives planned for the holidays. Our aim is to be there for our consumers however and whenever they want to shop us. Our e-commerce site is our another avenue for us to attract more customers and new customers.”
TJ Maxx (TJX) CEO Carol Meyrowitz said they are finding a plethora of opportunities to buy attractive merchandise and apparel from manufacturers 
We see a marketplace loaded, I would say loaded with quality, brand and merchandise and we are in excellent inventory position to take advantage of this great opportunities. We feel great about our inventory liquidity and plan to be buying right up until Christmas.”
And she spoke about how a challenged retail environment benefits her company 
“I would like to take a moment, as some of you may be concerned about today’s retail environment. To talk why TJX is so different from other retailers and how we continuously drive over comp store increases in many kinds of economic and retail environment, whether it’s very promotional or less promotional. We have built one of the most flexible retail models in the world over many, many years. Our vendor Universe is more than 17,000 and growing and no one brand has ever a substantial portion of our merchandise mix.  With our global presence, we have the ability to buy all over the world and offer consumers an eclectic differentiated mix and unique selection. We have a balanced portfolio of businesses in the U.S. and internationally which allows us to leverage our key advantages and mitigate our risk as one part of the world maybe more volatile than another at given time.”
TJ Maxx (TJX) CEO Carol Meyrowitz said she is never satisfied with the previous years performance numbers, no matter how good they are
Every year we look and we say, what did we do wrong and what could we do better? We never look at it as let’s just repeat exactly what we did. We always try and improve and that’s the part of innovation, it’s part of learning, it’s part of our secret sauce, it’s part of our sourcing, so we strive to be better every year. That’s what keeps our comps going.”
Their E-commerce business is lower margin than their traditional brick and mortars business
“E-commerce doesn’t produce the kind of operating income that Marmaxx does it, you are look at 14% almost operating income, so what it does do is build traffic, it is bringing in new customers and it’s doing exactly what we wanted to do and it’s giving the convenience of shopping, which is why we are differentiating it. Number one, it’s not the same as that product in the store, because it’s enticing for people to continue shopping 24/7.  So the combination of bringing in new customers and seeing a lifetime value of a customer that shops online and in brick-and-mortar, is really what is driving for.”
TJ Maxx (TJX) CEO Carol Meyrowitz said they are seeing an influx of young customers which will benefit their customers for decades to come
We’re getting the younger customers. We absolutely are, even in our HomeGoods is even getting younger customer, and they’re targeting it, we want to get them young and we want to keep them.  We’ve such a wide demographic of all the customers and younger, but our newer customers are tending to be younger.”

TJX 2Q15 Earnings Call Notes

Comps up strongly, but margins impacted by higher wages, lower ticket and higher supply chain costs

“In the U.S., Marmaxx comps grew by strong 4% and it was terrific to see that this increase was entirely driven by customer traffic, while segment profit margin was down 40 basis points, margins were negatively impacted by our investments in our associates, as well as the lower average ticket and higher supply chain costs as we had anticipated. Importantly, we were very pleased with our increase in merchandise margins.”

We think we can grow to 5475 stores

“With over 3,450 stores today, we see the opportunity to grow to 5,475 stores long-term with just our existing chains in our existing countries and the Netherlands. This includes 1,500 additional stores in North America and another 500 plus stores in Europe. Last month, we were excited to announce our plan to enter our next continent, Australia which I will talk about in a moment.”

We are one of the few US retailers to have successfully expanded internationally

“Over the last 38 years, we have built a global off-price powerhouse that we are sure would take decades for others to replicate. We are one of the few major U.S. retailers to have expanded successfully internationally. We have developed a highly integrated organization and infrastructure to support our off-price model. ”

Do your homework before making an investment

“we go into countries and we build brands and we are constantly increasing our number of vendors in every single country. I think what we have learned prior to going into Germany is to really investigate country for a long period of time before we go in. So, you tread lightly, you are camping, you really understand the mix of the customer, and every single country is very, very different. So, you have to take a long time to study each country before you go in. So, we have lots of learnings. And now we have obviously expanded into many new countries a little bit quicker, but we did a lot of homework before.”

See opportunities for growth in Europe and filling in in the US

” we think Europe, especially, Dana given the other countries that we are going into as well as in the current – like in Germany we feel like there is more opportunity to do more stores over the next couple of years. So, we are pretty bullish there. We are filling domestically. We will continue to probably be about where we have been on the store count. And in terms of I think you also asked about size of box. We are not seeing any major change there. I think we take that location by location. So, we do adjust as we go into more stores, we do adjust based on the location the size of the box, but there is no current plan to really play with that in a major way”

Turnover a little better, partially because of wage but also probably because of a lot of other stuff

“We are seeing a slight positive in terms of turnover. I mean it’s early on and we will see what happens over time. But along with that is we just worked very, very hard on building our culture and being a company of choice. So it all comes together. We try to work very hard to train. As we have growth in the company there is lots of opportunities for people and we try to make it an exciting place to work. So I can’t tell you if our turnover is better because of that, because of wage, but I think it’s a combination of everything. We just strive to do a better job every year.”