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.”