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”