• Marmaxx produced a strong +5% comp-sales increase and HomeGoods a stronger +6%. For Marmaxx (TJ Maxx and Marshalls), the commentary and comp composition suggest that its merchants were able to source something extra special in terms of “best” brands. This would be from Neiman / Saks’ high-end vendors that had to redirect orders elsewhere given Neiman / Saks’ inability to pay for them.
  • We now suspect that this “extra special” sourcing or “boost of luxury” also drove FQ3 and Ross’ results.
  • The cross-read from TJX to Ross is favorable. Burlington has had more volatile performance this year, so we wouldn’t draw a cross-read.

TJX Inc was the first of the off-pricers to report FQ4 and the results were robust. The Marmaxx division produced a +5% comp, which puts the 2- and 3-year CAGRs consistent with FQ3, but above the 1H. Contributing to the comp increase was product mix, pricing, and traffic. Mix was particularly emphasized with CEO Ernie Herman saying, “In Marmaxx … had a lot of better goods at higher prices that had nothing to do with what we would have had before.” Reading between the lines, what we think is driving such strong mix benefits is “cancelled” orders from Neiman – Saks, where the vendors sold the goods to TJX with the promise that it would “sprinkle” the goods across the store. This allows the brand to suffer little to no brand debasement while also getting paid. (See our analysis of FQ3 results here .) For Marmaxx and Ross, this allows the retailer to really surprise and delight (a “boost of luxury”) their treasure hunting, fashion-forward customers. Truly delivered surprise & delight keeps the customers coming back and keeps them promoting the retailer to friends / family / social media, as it has for many years now, but to do so, the merchants need to keep finding something new. That’s what the Saks’ discombobulation provided for this year. Herman, “Clearly, [the consumer has] been disappointed in some of their in-store shopping experience or merchandise content at various other retailers. And I believe our teams have taken advantage of that.”

Herman, “Availability [of coveted brands and merchandise] is off the charts. I think I mentioned outstanding in the opening remarks- I know you guys like to have fun with whatever wording we’re using, but today it’s outstanding and off the charts. But all seriousness, we’re having to slow the buyers down to a large degree in every division that we’re operating in.”

Marmaxx’s +5% comp compares to Advan’s observed figures of +2% traffic* and +3% ticket. As the chart above shows, traffic was strong through the holidays and into later January, before this year’s weather in the Northeast became brutal. February had been strong going into the latest Nor’easter.

Management noted that they are gaining customer types across the board, but CEO Herman added, “We continue to see an outsized number of new younger customers visiting our retail banners at each of our divisions.” Advan’s data of visits by demographic / psychographic segmentation** (Advan+Spatial.ai) show that Marmaxx has gained younger shoppers in particular over the past two years, up 17% vs. ’23. Notably, Rising Professionals has increased from rank #15 (out of 80 segments) to #9. Rising Professionals is defined as well-educated college graduates renting in the trendiest parts of town. Huge podcast listeners, this segment loves NPR and a host of podcasts, particularly related to true crime. For them, local is cool, etc.

Turning to HomeGoods, which produced a strong +6% comp-sales increase. The +6% was driven principally from comp-ticket, and it drove an acceleration in the 2- and 3-year comp CAGRs. Advan’s observed traffic was +60bps stronger QoQ, which, combined with an observed average ticket increase of +4.6%, moves the observed figures close to the reported comp. As the above chart shows, HomeGoods’ traffic is far more volatile than Marmaxx’s (which is why we added a moving average for the series) and more susceptible to bad weather.

Given that the boost-of-luxury and stronger social media advertising campaigns were also drivers for Ross’ FQ3 results, we expect that Ross will have an excellent FQ4. Burlington has been more mixed this year, and so, we think a cross-read from TJX is more difficult to make. Additionally, Burlington has historically been more susceptible to adverse weather, and that’s what late-January / February brought.

See our last write-up on industry trends here  and the last results  from TJX.     ‘* Others had Marmaxx traffic per location up +4.0% -150bps QoQ.

“**Advan + Spatial.ai segments visitors into 80 psychographic cohorts for any given period of time. Looking at changes in the cohorts between time periods allows one to see which cohorts are growing / holding flat / declining.