Q4 2024 TJX Companies Inc Earnings Call and Business Update

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Operator: Ladies and gentlemen, thank you for standing by. Welcome to the TJX Company's fourth quarter fiscal 2024 financial results conference call. At this time, all participants are in a listen only mode.

Speaker Change: Ladies and gentlemen, thank you for standing by welcome to the T. J X companies fourth quarter fiscal 2024 financial results Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session at that time. If you have a question you will need to press star one as a reminder, this conference call is being recorded as of today February 28.

Operator: Later, we will conduct a question and answer session. At that time, if you have a question, you will need to press star one. As a reminder, this conference call is being recorded as of today, February 28, 2024. I would now like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of TJX Companies, Inc. Please go ahead.

2024, I would now like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer, and President of the Tea Jacks companies incorporated. Please go ahead Sir.

Debra McConnell: Thanks, Ivy. Before we begin, Deb has some opening comments. Thank you, Ernie, and good morning. Today's call is being recorded and includes forward-looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause actual results to vary materially from these statements, including, among others, the factors identified in our filings with the SEC.

Speaker Change: Thanks, Ivy before we begin Deb has some opening comments.

Deb: Thank you Ernie and good morning, today's call is being recorded and includes forward looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause the actual results to vary materially from these statements, including among others. The factors identified in our filings with the SEC. Please.

Debra McConnell: Please review our press release for a cautionary statement regarding forward-looking statements, as well as the full safe harbor statements included in the investor section of our website, TJX.com. We have also detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and in the investor section of TJX.com, along with reconciliations to non-GAAP measures we discussed. Thank you, and now I'll turn it back over to Ernie. Good morning.

Deb: Our press release for a cautionary statement regarding forward looking statements as well as the full safe Harbor statements included in the investors section of our website T. J X Dot com. We have also detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and in the Investor.

Deb: Her section of T J X dot com, along with reconciliations to non-GAAP measures. We discuss thank you and now I'll turn it back over to Ernie.

Ernie L. Herrman: Good morning.

Ernie L. Herrman: Joining me in depth on the call is John. I want to start today by recognizing all of our Global Associates for their excellent work in 2023. I truly appreciate their continued commitment to TJX and their focus on our customers. I especially want to thank our Store, Distribution, and Fulfillment Center associates for their hard work and dedication to our company every day. Now, to an overview of our results, beginning with the fourth quarter. I am extremely pleased with our very strong finish to 2023.

Ernie L. Herrman: Joining me and Deb on the call is John.

Ernie L. Herrman: I want to start today by recognizing all of our global associates for their excellent work in 2023.

Ernie L. Herrman: I truly appreciate their continued commitment to T J maxx and their focus on our customers.

Ernie: I, especially want to thank our store distribution and fulfillment center associates for their hard work and dedication to our company every day.

Ernie: Now to an overview of our results beginning with the fourth quarter I am extremely pleased with our very strong finish to 2023.

Ernie L. Herrman: Our fourth quarter sales, profitability, and earnings per share all exceeded our expectations. Overall comp sales were up a strong 5% and were entirely driven by growth in customer transactions. This is great to see as it underscores our ability to continue gaining market share in all of our geographies. I am particularly pleased that our U.S. businesses, Marmax and HomeGoods, continue to enjoy their very strong sales momentum. Also, it was great to see comp sales growth accelerate versus the third quarter at our Canadian and international divisions. We are confident that our exciting assortments and excellent values resonated with shoppers across all of our retail banners this holiday season. We believe our gift-giving selections offer customers something for everyone on their list, and we see being a gift-giving destination as a year-round opportunity for our business.

Ernie: Our fourth quarter sales profitability and earnings per share all exceeded our expectations.

Ernie: Overall comp sales were up a strong 5% and were entirely driven by growth in customer transactions.

Ernie: This is great to see is that underscores our ability to continue gaining market share in all of our geographies.

Ernie: I am, particularly pleased that our U S businesses <unk> Homegoods continued their very strong sales momentum.

Ernie: Also it was great to see comp sales growth accelerated versus the third quarter at our Canadian and international divisions.

Ernie: We are confident that our exciting assortments and excellent values resonated with shoppers across all of our retail banners. This holiday season.

Ernie: We believe our gift, giving selections offered customers something for everyone on their list and we see being a gift giving destination as a year round opportunity for our business.

Ernie L. Herrman: For the full year, overall sales surpassed $50 billion, marking a milestone for our company. Even more exciting, we still see plenty of opportunities to continue our growth in our markets around the world. For the full year, consolidated comp sales increased 5%.

Ernie: For the full year overall sales surpassed $50 billion, marking a milestone for our company.

Ernie: Even more exciting we still see plenty of opportunities to continue our growth in our markets around the world.

Ernie: For the full year consolidated comp sales increased 5%.

Ernie L. Herrman: Profitability increased significantly, and earnings per share grew double digits, all well above our initial guidance for the year. Importantly, we saw comp sales growth across each of our divisions, again, all driven by increases in customer transactions. We are confident that we will gain market share in every geography that we operate in. Our outstanding performance in 2023 is a testament to the sharp execution of our talented associates around the world and their relentless focus on delivering excellent value to our customers every day. Looking ahead, the first quarter is off to a good start.

Ernie: Profitability increased significantly and earnings per share grew double digits.

Ernie: All well above our initial guidance for the year.

Ernie: Importantly, we saw comp sales growth across each of our divisions again, all driven by increases in customer transactions.

Ernie: We are confident that we gained market share in every geography that we operate in.

Ernie: Our outstanding performance in 2023 is a testament to the sharp execution of our talented associates around the world and their relentless focus on delivering excellent value to our customers every day.

Ernie: Looking ahead, the first quarter is off to a good start.

Ernie L. Herrman: In 2024, we have many initiatives planned that we believe will keep driving sales and attract more shoppers to our stores. The availability of quality branded merchandise in the marketplace continues to be outstanding. We are in a terrific position to continue flowing a fresh assortment of goods to our stores and online this spring and throughout the year. Longer term, we see many opportunities to capture additional market share across our geographies, and we are laser focused on increasing the profitability of TJX. We are convinced that our flexibility and commitment to value will continue to be a winning retail formula for many years to come. Before I continue, I'll turn the call over to John to cover our fourth quarter and full year financial results in more detail. Thanks, Ernie.

Ernie: And 2024, we have many initiatives planned that we believe will keep driving sales and attract more shoppers to our stores.

Ernie: Availability of quality branded merchandise in the marketplace continues to be outstanding.

Ernie: Yes.

Ernie: We are in a terrific position to continue flowing a fresh assortment of goods to our stores and online this spring and throughout the year.

Ernie: Longer term, we see many opportunities to capture additional market share across our geographies and we are laser focused on increasing the profitability of T. J X.

Ernie: We are convinced that our flexibility and commitment to value will continue to be a winning retail formula.

Ernie: For many years to come.

Ernie: Before I continue I'll turn the call over to John to cover our fourth quarter and full year financial results in more detail.

John: Thanks, Ernie also I also want to add my gratitude to all of our global associates for their continued hard work.

John: I also want to add my gratitude to all of our Global Associates for their continued hard work. Now, I'll share some additional details on the fourth quarter. As I recap the fourth-quarter results, I'm going to speak to everything on a 13-week basis, which excludes the extra week in the quarter.

John: Now I'll share some additional details on the fourth quarter.

John: As I recap the fourth quarter results I'm going to speak to everything on a 13 week basis, which excludes the extra week in the quarter reconciliations detailing the impact of the extra week on our results and other adjustments can be found in today's press release and on the investors section of our website.

John: Reconciliations detailing the impact of the extra week on our results and other adjustments can be found in today's press release and on the Investors section of our website. Adjusted net sales grew to $15.5 billion, a 7% increase versus last year. As Ernie mentioned, consolidated comp store sales increased 5% above the high end of our plan and were entirely driven by an increase in customer transactions. A quick note that on prior calls, we have referred to customer transactions as customer traffic, but for the sake of clarity, we'll use the term customer transactions going forward. Back to the results.

Ernie: Adjusted net sales grew to $15 5, billion% to 7% increase versus last year.

Ernie: As Ernie mentioned consolidated comp store sales increased 5% above the high end of our plan and were entirely driven by an increase in customer transactions.

Ernie: A quick note that on prior calls we have referred to customer transactions as customer traffic, but for the sake of clarity will use the term customer transactions going forward.

Ernie: Back to the results in the fourth quarter, our consolidated comp sales increased in both our apparel and home businesses.

John: In the fourth quarter, our consolidated comp sales increased in both our apparel and home businesses. In terms of divisional sales performance for the fourth quarter, we were pleased to see strong comp sales increases at every division, all driven entirely by customer transactions. At MARMAX, I also note that we saw comp increases in both our apparel and home categories. Fourth quarter adjusted pre-tax profit margin of 10.9% was up 170 basis points versus last year.

Ernie: In terms of divisional sales performance for the fourth quarter. We were pleased to see strong comp sales increases at every division all driven entirely by customer transactions.

Ernie: Yes.

Ernie: <unk> also note that we saw comp increases in both our apparel and home categories.

Ernie: Fourth quarter adjusted pre tax profit margin of 10, 9% was up 170 basis points versus last year, our adjusted pre tax profit margin came in well above our plan primarily due to a higher merchandise margin. This includes a larger than expected benefit from shrink and freight lower.

John: Our adjusted pre-tax profit margin came in well above our plan, primarily due to a higher merchandise margin. This includes a larger than expected benefit from shrinking freight, lower markdowns, and better mark on. We also saw some expense leverage on our above-plan sales. Adjusted gross margin for the fourth quarter was up 340 basis points versus last year. This was driven by a higher merchandise margin, including a significant benefit from lower freight costs and shrink, strong mark-on, and lower mark-down. Fourth quarter adjusted SG&A increased 190 basis points versus last year, primarily due to higher incentive accruals and incremental store wage and payroll costs.

Ernie: <unk> and better Mark on we also saw some expense leverage on our above plan sales.

Ernie: Adjusted gross margin for the fourth quarter was up 340 basis points versus last year. This was driven by a higher merchandise margin, including a significant benefit from lower freight costs and shrink strong mark on and lower markdowns.

Ernie: Fourth quarter, adjusted SG&A increased 190 basis points versus last year, primarily due to higher incentive accruals and incremental store wage and payroll costs.

John: Adjusted net interest income benefited the fourth quarter adjusted pre-tax profit margin by 10 basis points versus last year. Lastly, we were very pleased that adjusted diluted earnings per share of $1.12 were well above our expectations and up 26% versus last year. Now to our fiscal 24 results. Once again, for our full year financial results, I'm going to speak to everything on a 52-week basis, which excludes the extra week in the fiscal year. Adjusted net sales grew to $53.3 billion, a 7% increase versus last year. Full-year consolidated comp store sales were up 5%, entirely driven by customer transactions.

Ernie: Adjusted net interest income.

Ernie: Benefited fourth quarter adjusted pre tax profit margin by 10 basis points versus last year.

Ernie: Lastly, we were very pleased that adjusted diluted earnings per share of $1 12 were well above our expectations and up 26% versus last year.

Speaker Change: Now to our fiscal 'twenty four results.

Speaker Change: Once again for the full year for our full year.

Speaker Change: For our full year financial results Im going to speak to everything on a 52 week basis, which excludes the extra week in the fiscal year.

Speaker Change: Adjusted net sales grew to $53 3, billion% to 7% increase versus last year.

Speaker Change: Full year consolidated comp store sales were up 5% entirely driven by customer transactions. We were very pleased to see mid single digit comp sales increases in both our apparel and home businesses.

John: We were very pleased to see mid-single-digit comp sales increases in both our apparel and home business. The adjusted pre-tax profit margin of 10.9% was up 120 basis points versus last year's adjusted 9.7%. Adjusted gross margin for the full year was 29.9%, up 230 basis points versus last year's 27.6%, primarily driven by a significant benefit from lower freight costs, as well as strong mark-on and 10 basis points of shrink favorability. Shrink was an area that we were very, that we were laser focused on as an organization all year long. I want to recognize and thank all the associates who worked extremely hard on our initiatives throughout the year. Importantly, we managed our in-store initiatives while delivering a very strong top line and providing a pleasant shopping experience for our customers. We remain focused on shrinking and will continue to look for ways to improve this area going forward.

Speaker Change: Adjusted pre tax profit margin of 10, 9% was up 120 basis points versus last year's adjusted nine 7% adjust.

Speaker Change: Adjusted gross margin for the for the full year was 29, 9% up 230 basis points versus last year's 27, 6%, primarily driven by a significant benefit from lower freight costs as well as strong mark on and 10 basis points of shrink favorability.

Speaker Change: Shrink was an area that we were that we were laser focused on as an organization all year long I want to recognize and thank all the associates, who worked extremely hard on our initiatives throughout the year Importantly, we managed our in store initiatives, while delivering a very strong topline and providing a pleasant shopping experience.

Speaker Change: For our customers, we remain focused on shrink and continue to look for ways to improve this area going forward.

Speaker Change: Full year adjusted SG&A was 19, 3% up 140 basis points versus last year's 17, 9%. This.

John: Full-year adjusted SG&A was 19.3%, up 140 basis points versus last year's 17.9%. This is primarily due to incremental store wage and payroll costs and higher incentive accruals. Adjusted net interest income benefited full-year adjusted pre-tax profit margin by 30 basis points versus last year.

Speaker Change: This was primarily due to incremental store wage and payroll costs and higher incentive accruals.

Speaker Change: Adjusted net interest income benefited full year adjusted pre tax profit margin by 30 basis points versus last year.

Speaker Change: Lastly, full year adjusted earnings per share were $3 76.

Speaker Change: Up 21% versus last year's adjusted $3 11.

John: Lastly, full-year adjusted earnings per share were $3.76, up 21% versus last year's adjusted $3.11. Moving to inventory, balance sheet inventory was up 3% versus fiscal 2023.

Speaker Change: Moving to inventory balance sheet inventory was up 3% versus fiscal 'twenty. Three we are happy with our inventory levels and the plentiful availability, we see in the marketplace. We are well positioned to flow fresh assortments to our stores and online this spring.

Speaker Change: I'll finish with our liquidity and shareholder distributions.

John: We are happy with our inventory levels and the plentiful availability we see in the marketplace. We are well positioned to flow fresh assortments to our stores and online this spring. I'll finish with our liquidity and shareholder distribution. For the full 53-week year, we generated $6.1 billion in operating cash flow and ended the year with $5.6 billion in cash. In fiscal 24, we returned $4 billion to shareholders through our buyback and dividend programs. Now, I'll turn it back to Ernie.

Speaker Change: For the full 53 week year, we generated $6 1 billion in operating cash flow and ended the year with $5 6 billion in cash in fiscal 'twenty. Four we returned $4 billion to shareholders through our buyback and dividend programs now ill turn it back to Ernie.

Ernie L. Herrman: Thanks, John.

Ernie L. Herrman: I'll pick it up with some full year divisional highlights.

Ernie L. Herrman: As we saw with our strong fourth quarter sales every division delivered comp increases for the full year with customer transactions driving the increases across the businesses.

Ernie L. Herrman: Again.

Ernie L. Herrman: We believe this is a strong indicator of our ability to continue gaining market share and it underscores our wide customer demographic.

Ernie L. Herrman: Beginning with <unk> overall sales well exceeded $30 billion.

Ernie L. Herrman: Thanks, John. I'll pick it up with some full-year divisional highlights. As we saw with our strong fourth-quarter sales, every division delivered comp increases for the full year, with customer transactions driving the increases across the business. Again, we believe this is a strong indicator of our ability to continue gaining market share, and it underscores our wide customer demographic. Beginning with Marmax, overall sales well exceeded $30 billion. Comp Store sales increased by a very strong 6%. We also surpassed 2,500 total TJ Maxx and Marshall stores. Marmax's apparel and home categories both comped up for the year. Furthermore, we saw consistently strong comp sales increases across regions and income demographics. As to Marmax's profitability, we were extremely pleased to see Foulier's adjusted segment profit margin improve significantly to 13.7%.

Ernie L. Herrman: Comp store sales increased a very strong 6%.

Ernie L. Herrman: We also surpassed 2500 total T J maxx and Marshalls stores.

Ernie L. Herrman: <unk> apparel and home categories, both comped up for the year.

Ernie L. Herrman: Further we saw consistently strong comp sales increases across regions and income demographics.

Ernie L. Herrman: As to <unk> profitability, we were extremely pleased to see full year adjusted segment profit margin improved significantly to 13, 7%.

Ernie L. Herrman: As we look ahead, we are very excited about the opportunities to see that we see to grow our customer base drive sales opened new stores and increase the profitability of our largest division.

Ernie L. Herrman: At Sierra which is reported with <unk>, we were pleased with the continued sales growth.

Ernie L. Herrman: Our online businesses, we added new categories and brands throughout the year to deliver the same freshness and excitement online as we do on our stores.

Ernie L. Herrman: As we look ahead, we are very excited about the opportunities that we see to grow our customer base, drive sales, open new stores, and increase the profitability of our largest division. At Sierra, which is reported with Barmax, we were pleased with the continued sales growth. At our online businesses, we added new categories and brands throughout the year to deliver the same freshness and excitement online as we do in our stores. At HomeGoods, annual sales grew to nearly $9 billion, and comps grew 3%.

Ernie L. Herrman: At Homegoods annual sales grew to nearly $9 billion and comps grew 3%.

Ernie L. Herrman: It was great to see the home business returned to positive comp sales trends.

Ernie L. Herrman: We are particularly pleased with the acceleration we saw in the second half of the year with comp sales increasing high single digits.

Ernie L. Herrman: Similar to <unk>, we saw consistent performance across regions and income demographics.

Ernie L. Herrman: Homegoods adjusted profitability also improved significantly to nine 4%.

Ernie L. Herrman: It was great to see the home business return to positive comp sales trends. We are particularly pleased with the acceleration we saw in the second half of the year, with comp sales increasing in high single digits. Similar to MARMAX, we saw consistent performance across regions and income demographics.

Ernie L. Herrman: And getting closer to our goal of returning this division to a double digit profit margins.

Ernie L. Herrman: During the year, we opened a combined 34 home goods and home center stores.

Ernie L. Herrman: Long term, we see exciting potential to bring our eclectic mix of home fashions to even more consumers across the United States.

Ernie L. Herrman: Moving the T J <unk>, Canada.

Ernie L. Herrman: Full year sales were $5 billion and comp store sales increased 3%.

Ernie L. Herrman: Home Goods Adjusted Profitability also improved significantly to 9.4%, and we are getting closer to our goal of returning this division to a double-digit profit margin. During the year, we opened a combined 34 home goods and HomeSense stores. Long term, we see exciting potential to bring our eclectic mix of home fashions to even more consumers across the United States by moving to TJX Canada. 4-year sales were $5 billion, and comp store sales increased 3%. Adjusted Segment Profit Margin on a Constant Currency Basis was 14%.

Ernie L. Herrman: Adjusted segment profit margin on a constant currency basis was 14%.

Ernie L. Herrman: With more than 550 stores across Canada.

Ernie L. Herrman: One of the largest apparel and home retailers in the country.

Ernie L. Herrman: We are a top destination for consumers seeking branded merchandize at amazing value.

Ernie L. Herrman: We continue to see opportunities to expand our footprint across Canada and attract new shoppers to all three of our banners.

Ernie L. Herrman: At <unk> International full.

Ernie L. Herrman: Full year sales approached $7 billion and comp store sales were up 3% adjusted segment profit margin on a constant currency basis was four 6%.

Ernie L. Herrman: With more than 550 stores across Canada, we are one of the largest apparel and home retailers in the country. We are a top destination for consumers seeking branded merchandise at amazing value. We continue to see opportunities to expand our footprint across Canada and attract new shoppers to all three of our banners at TGX International. Full year sales approached $7 billion, and comp store sales were up 3%. The adjusted segment profit margin on a constant currency basis was 4.6%.

Ernie L. Herrman: As a reminder, in the second quarter. This division's profitability was significantly impacted by a reserve related to our German government Covid receivable.

Ernie L. Herrman: In Europe, we believe our sales growth outperformed many other major brick and mortar apparel retailers in a difficult economy.

Ernie L. Herrman: Australia delivered very strong sales growth and we continue to open stores in new markets.

Ernie L. Herrman: Going forward, we are confident that we can grow our retail banners in each country that we operate in and are highly focused on improving this division's profitability.

Ernie L. Herrman: Okay.

Ernie L. Herrman: Going forward I am confident that we are well positioned to continue our growth around the world and in many kinds of economic and retail environments.

Ernie L. Herrman: As a reminder, in the second quarter, this division's profitability was significantly impacted by a reserve related to a German government COVID receivable. In Europe, we believe our sales growth outperformed many other major brick and mortar power retailers in a difficult economy. Australia delivered very strong sales growth, and we continue to open stores in new markets. Going forward, we are confident that we can grow our retail banners in each country that we operate in and are highly focused on improving this division's profitability. Going forward, I am confident that we are well positioned to continue our growth around the world and in many kinds of economic and retail environments. Let me briefly remind you of the key characteristics of our business that we believe are tremendous advantages.

Ernie L. Herrman: Let me, let me briefly remind you of the key characteristics of our business that we believe are tremendous advantage.

Ernie L. Herrman: First is our relentless focus on offering our shoppers great value on every item every day for us value means delivering consumers the right combination of brand fashion price and quality as always.

Ernie L. Herrman: Second is the flexibility of our business model that allows us to shift our buying distribution and store mix to quickly react to the hottest trends in the marketplace and changing consumer preferences.

Ernie L. Herrman: Further our global mix of our business allows us to create a differentiated treasure hunt shopping experience in every country that we operate in.

Ernie L. Herrman: Third we.

Ernie L. Herrman: We successfully operate stores across a wide customer demographic our ability to offer a differentiated mix of good better and best merchandise at each of our stores allows us to appeal to value conscious shoppers across a broad range of income demographics.

Ernie L. Herrman: First, is our relentless focus on offering our shoppers great value on every item, every day. For us, value means delivering consumers the right combination of brand, fashion, price, and quality, as always. Second, the flexibility of our business model that allows us to shift our buying, distribution, and store mix to quickly react to the hottest trends in the marketplace and changing consumer preferences. Furthermore, the globalness of our business allows us to create a differentiated treasure hunt shopping experience in every country that we operate in. Third,

Ernie L. Herrman: Further each of our divisions continue to effect, an outsized number of younger customers to our stores track.

Ernie L. Herrman: Trapped and outsized outsized number of younger customers to our stores, which we believe bodes well for the future.

Ernie L. Herrman: Next we are extremely confident that there is more than enough inventory available in the marketplace to support our growth plans.

Ernie L. Herrman: In 2023 or more than 1300 buyers source goods from a universe of more than 21000 vendors, including thousands of new ones.

Ernie L. Herrman: We successfully operate stores across a wide customer demographic. Our ability to offer a differentiated mix of good, better, and best merchandise at each of our stores allows us to appeal to value-conscious shoppers across a broad range of income demographics. Further, each of our divisions continue to attract an outsized number of younger customers to its stores, which we believe bodes well for the future. Next, we are extremely confident that there is more than enough inventory available in the marketplace to support our growth plan. In 2023, more than 1,300 buyers will source goods from a universe of more than 21,000 vendors, including thousands of new ones.

Ernie L. Herrman: As we continue to grow our top line, we believe we become even more appealing to vendors as we offer them an attractive way to grow their business.

Ernie L. Herrman: Fifth we continue to see opportunities for store growth around the world. We believe we can grow our global store base by at least another 1300 plus stores over the long term with just our existing banners in our current countries.

Ernie L. Herrman: Last but certainly not least is our exceptional talent and strong culture.

Ernie L. Herrman: I truly believe the depth of off price knowledge and expertise and the longevity of our talent within T. J X is unmatched.

Ernie L. Herrman: We continue to invest in Chi-ching and training our associates to develop the next generation of leaders within our company.

Ernie L. Herrman: Finally, I am so proud of our culture, which I believe is a major differentiator and another key component of our success.

Ernie L. Herrman: Turning to corporate responsibility.

Ernie L. Herrman: Our teams across the company did great work on our initiatives in each of our four pillars.

Ernie L. Herrman: As we continue to grow our top line, we believe we are becoming even more appealing to vendors as we offer them an attractive way to grow their business. Finally, we continue to see opportunities for store growth around the world. We believe we can grow our global store base by at least another 1,300-plus stores over the long term with just our existing banners in our current country. Last but certainly not least, is our exceptional talent and strong culture.

Ernie L. Herrman: Workplace communities environment and responsible business.

Ernie L. Herrman: Our 2023 global corporate responsibility report.

Ernie L. Herrman: Summarizes our efforts and progress within this work as I shared last quarter.

Ernie L. Herrman: Our value mission extends to our corporate responsibility efforts, including supporting our associates, giving back in our communities, helping mitigate our impact on the environment.

Ernie L. Herrman: And operating our business ethically.

Ernie L. Herrman: I am pleased to share that in fiscal 2024, we supported more than 2000 nonprofit organizations globally through our T. J X foundations, including nonprofit partners in all 50 states within the United States.

Ernie L. Herrman: I truly believe the depth of off-price knowledge and expertise and the longevity of our talent within TJX is unmatched. We continue to invest in teaching and training our associates to develop the next generation of leaders within our company. Finally, I am so proud of our culture, which I believe is a major differentiator and another key component of our success.

Ernie L. Herrman: Through our grant funding and in partnership with our generous customers, we provided more than 30 million meals through our nonprofit partners the people experiencing food insecurity.

Ernie L. Herrman: And our associates across the globe continue to be engaged in this work.

Ernie L. Herrman: Turning to Corporate Responsibility, our teams across the company did great work on our initiatives in each of our four pillars: Workplace, Communities, Environment, and Responsible Business.

Ernie L. Herrman: Running give one dollar campaigns in our stores participating in our associate nominated grants program.

Ernie L. Herrman: And to build homes for those in need.

Ernie L. Herrman: Serving his career coaches for students and more.

Ernie L. Herrman: Our 2023 Global Corporate Responsibility Report summarizes our efforts and progress in this work, as I shared last quarter. Our value mission extends to our corporate responsibility efforts, including supporting our associates, giving back in our communities, helping mitigate our impact on the environment, and operating our business ethically. I'm pleased to share that in fiscal 2024, we supported more than 2,000 nonprofit organizations globally through our TJX Foundation, including non-profit partners in all 50 states within the United States. Through our grant funding and in partnership with our generous customers, we provided more than 30 million meals to our non-profit partners, the people experiencing food insecurity, and our associates across the globe continue to be engaged in this work, running give a dollar campaigns in our stores, Helping to build homes for those in need, serving as career coaches for students, and more.

Ernie L. Herrman: These are just some examples.

Ernie L. Herrman: Work our teams are doing in our communities and we invite you to visit <unk> dot com to learn more.

Ernie L. Herrman: Summing up we are very proud of our team's performance in 2023.

Ernie L. Herrman: And are in a great position as we enter 2024, we are confident in our plans this year and as always we will strive to beat them.

Ernie L. Herrman: We remain committed to investing in our business to support our future growth.

Ernie L. Herrman: Longer term, we believe that the combination of our key strengths and history of strong execution sets.

Ernie L. Herrman: Sets us up extremely well to continue our successful growth around the world.

Ernie L. Herrman: I am convinced that plenty of opportunities remain to drive sales increased profitability and capture additional market share going forward.

Ernie L. Herrman: Now I'll turn the call back to John to cover our full year and first quarter guidance and then we'll open it up for questions.

John: Thanks, again already now to our fiscal 'twenty five guidance beginning with the full year.

John: We are planning overall comp store sales growth to be up 2% to 3% in fiscal 'twenty five over a 5% comp increase in fiscal 'twenty four.

John: For the full year, we expect consolidated sales to be in the range of 55 six to $56 1 billion. We're planning full year pre tax profit margin to be in the range of 10, 9% to 11%. This would be flat to up 10 basis points versus fiscal 2000, <unk> adjusted pre tax profit.

Ernie L. Herrman: These are just some examples of the work our teams are doing in our communities, and we invite you to visit TJX.com to learn more. Summing up, we are very proud of our team's performance in 2023 and are in a great position as we enter 2024. We are confident in our plans this year, and, as always, we'll strive to beat them.

John: <unk> of 10, 9%.

John: Okay.

John: Moving to full year gross margin, we expect it to be in the range of 30% to 31% a 10 to 20 basis point increase versus fiscal 'twenty for us adjusted gross margin of 29, 9% we expect.

Ernie L. Herrman: We remain committed to investing in our business to support our future growth. In the long term, we believe that the combination of our key strengths and history of strong execution sets us up extremely well to continue our successful growth around the world. I am convinced that plenty of opportunities remain to drive sales, increase profitability, and capture additional market share going forward. Now, I'll turn the call back to John to cover our full year and first quarter guidance, and then we'll open it up for questions. Thanks again, Ernie.

John: This increase to be driven by a higher merchandise margin, partially offset by our supply chain investments, we're planning for both freight and shrink to be flat versus fiscal 'twenty four.

John: The full year SG&A, we're expecting it to be approximately 19, 3% flat to last year's adjusted SG&A. We're.

John: We're planning incremental store wage and payroll costs to be offset by lower incentive compensation costs and a benefit from items that negatively impacted us last year.

John: We're planning full year net interest income of about $118 million, which would delever fiscal 'twenty five pre tax profit by about 10 basis points.

John: Now to our fiscal 25 guidance, beginning with the full year. We are planning overall comp store sales growth to be up 2-3% in Fiscal 25 over a 5% comp increase in Fiscal 24. For the full year, we expect consolidated sales to be in the range of $55.6 to $56.1 billion.

For modeling purposes, we're currently assuming a full year tax rate of 26.0% and a weighted average share count of approximately 114 billion shares.

John: As a result of these assumptions, we expect full year earnings per share to be in the range of $3 94 to $4 <unk>. This would represent.

John: We're planning full-year pre-tax profit margin to be in the range of 10.9 to 11 percent. This would be flat to up 10 basis points versus Fiscal 24's adjusted pre-tax profit margin of 10.9%. Moving to full-year gross margin, we expect it to be in the range of 30 to 30.1 percent, a 10 to 20 basis point increase versus fiscal 24's adjusted gross margin of 29.9 percent. We expect this increase to be driven by a higher merchandise margin, partially offset by our supply chain investment. We're planning for both freight and shrink to be flat versus fiscal 24.

John: Presented an increase of 5% to 7% versus last year's adjusted earnings per share of $3 76.

John: Moving to our first quarter guidance.

John: We are planning overall comp store sales growth to be up 2% to 3%. We expect first quarter consolidated sales to be in the range of $12 four to $12 5 billion.

John: We're planning first quarter pre tax profit margin to be in the range of 10, five to 10, 6% an increase of 20 to 30 basis points versus last year.

John: Next we expect first quarter gross margin to be approximately 29, 8%. This would be an increase of 90 basis points versus last year's last year, primarily due to a higher merchandise margin, which includes the annualized <unk> of lower freight costs from last year and favorable mark on <unk>.

John: For full-year SG&A, we're expecting it to be approximately 19.3 percent, flat for last year's adjusted SG&A. We plan for incremental store wage and payroll costs to be offset by lower incentive compensation costs and a benefit from items that negatively impacted us last year. We're planning full-year net interest income of about $118 million, which would de-lever fiscal 25 pre-tax profit by about 10 basis points. For modeling purposes, we're currently assuming a full-year tax rate of 26.0% and a weighted average share count of approximately 1.14 billion shares.

John: Partially offset by supply chain investments.

John: We're expecting first quarter SG&A to be approximately 19, 5% up 50 basis points versus last year.

John: We expect this increase to be primarily driven by incremental store wage and payroll costs.

For modeling purposes, we're currently assuming a first quarter tax rate of 25, 8%.

John: Net interest income of about $37 million and a weighted.

John: <unk> average share count of approximately 114 billion shares.

John: As a result of these assumptions, we expect first quarter earnings to be earnings per share to be in the range of 84 to 86.

John: Up 11% to 13% versus last years 76.

John: Moving on to our fiscal 'twenty five capital plans, we expect capital expenditures to be in the range of two to $2 $1 billion.

John: As a result of these assumptions, we expect full-year earnings per share to be in the range of $3.94 to $4.02. This would represent an increase of 5-7% versus last year's adjusted earnings per share of $3.76. Moving to our first quarter guidance, we are planning overall comp store sales growth to be up 2-3%. We expect first quarter consolidated sales to be in the range of $12.4 to $12.5 billion.

John: This includes opening new stores, Remodels and relocations as well as investments in our distribution network and infrastructure to support our growth.

John: For new stores, we plan to add about 141, net new stores, which would bring our year end total to almost 5100 stores. This would represent a store growth of about 3%.

John: In the U S. Our plans call for us to add about 45 net new stores.

John: Edmar, Max and 40 stores at Homegoods, including 17 homes since stores at Sierra We plan to add 26 stores in Canada, We plan to add 10 stores and at <unk> International we plan to add <unk>.

John: We're planning first quarter pre-tax profit margin to be in the range of 10.5 to 10.6 percent, an increase of 20 to 30 basis points versus last year. Additionally, we expect first quarter gross margin to be approximately 29.8%. This would be an increase of 90 basis points versus last year, primarily due to a higher merchandise margin, which includes the annualization of lower freight costs from last year and favorable mark-on, partially offset by supply chain investment. We're expecting first quarter SG&A to be approximately 19.5%, up 50 basis points versus last year. We expect this increase to be primarily driven by incremental store wage and payroll costs. For modeling purposes, we're currently assuming a first quarter tax rate of 25.8%, net interest income of about $37 million, and a weighted average share count of approximately 1.14 billion shares.

John: 15, net stores in Europe, and five net stores in Australia.

John: Lastly, we also plan to remodel about 480 stores and relocate approximately 40 stores in fiscal 'twenty five.

John: As to our fiscal 'twenty five cash distribution plans, we remain committed to returning cash to the to our shareholders.

John: As we outlined in today's press release, we expect our board of directors will increase our quarterly dividend by 13% to 37 and a half cent per share. Additionally.

John: Additionally in fiscal 'twenty five we currently expect to buyback.

John: Two to $2 $5 billion of TGF stock.

John: Looking beyond FY 'twenty five we continue to believe that on a three to four comp increased our pre tax profit margin can be flat to up 10 basis points.

John: As I've said before this assumes no outsized expense headwinds.

John: Also our plans do not contemplate assumptions for macro factors, such as geopolitical events foreign exchange volatility or consumer behavior.

John: As a result of these assumptions, we expect first quarter earnings per share to be in the range of $0.84 to $0.86, up 11% to 13% versus last year's $0.76. Moving on to our fiscal 25 capital plan, we expect capital expenditures to be in the range of $2 to $2.1 billion.

John: In closing I want to emphasize that we are laser focused on growing our top line, increasing profitability and will strive to exceed our plans.

John: We are in an excellent position, both operationally and financially to take advantage of the opportunities we see to further grow our business, while simultaneously returning significant cash to our shareholders.

John: This includes opening new stores, remodels, and relocations, as well as investments in our distribution network and infrastructure to support our growth. For new stores, we plan to add about 141 net new stores, which would bring our year-end total to almost 5,100 stores. This would represent a store growth of about 3%. In the U.S., our plans call for us to add about 45 net new stores at MarMax and 40 stores at HomeGoods, including 17 HomeSense stores. At Sierra, we plan to add 26 stores. In Canada, we plan to add 10 stores. And at TJX International, we plan to add 15 net stores in Europe and 5 net stores in Australia. Lastly, we also plan to remodel about 480 stores and relocate approximately 40 stores in fiscal 25. As to our fiscal 25 cash distribution plans, we remain committed to returning cash to our shareholders. As we outlined in today's press release, we expect our Board of Directors will increase our quarterly dividend by 13% to $0.375 per share. Additionally, in fiscal 2025, we currently expect to buy back $2 to $2.5 billion of TJX stock.

John: Now we are happy to take your questions as we do every quarter, we're going to ask that you. Please limit your questions to one per person. So we can keep the call on schedule and answer as many questions as we can.

Speaker Change: And now we'll open up for questions.

Speaker Change: Okay.

Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press star one if you need to withdraw. Your question you may do so at any time by pressing star to our first question comes from the line of Paul Lajoie from Citigroup. Please go ahead.

Paul Lejuez: Hey, Thanks, guys.

Paul Lejuez: Got your margin guidance overall for the year, but im curious how youre thinking about profit margins at each of the segments. This year, where do you have the most opportunity and what is assumed in your guidance, which segment drop which are down and then Ernie just any quick comments on the Macys news yesterday, how youre thinking about the store closure.

Paul Lejuez: Community, what that might mean for you guys.

Ernie L. Herrman: Yes, Paul to start off.

Ernie L. Herrman: On this call, we're not going to get into the detail.

Ernie L. Herrman: By Division just to say that we're very confident in the plans we have.

To execute them and we're pleased to be increasing 10 basis points on a two to three comp.

Paul: Yes, yes.

Paul: Paul on the on the.

Interesting the macys store closure. This is a little similar to some of the other closures we've talked about over the last few years.

Paul: Obviously with the Macy's store closures you do have a lot of overlap in categories that marry up which marry up to the businesses that we run so.

Paul: We would think that would be an additional and thats, probably what youre getting at I'm guessing in additional market share opportunity, depending on the categories and the locations that we're in.

John: Looking beyond FY25, we continue to believe that on a 3-4 comp increase, our pre-tax profit margin can be flat to up 10 basis points. As I've said before, this assumes no outsized expense headwinds. Also, our plans do not contemplate assumptions for macro factors such as geopolitical events, foreign exchange volatility, or consumer behavior.

Paul: So not that we would.

Paul: Not that we would get all of that but we would get some of it is what we always figure and again, we've looked at that with any of the other stores over the last 18 24 months that have closed and we look at it similarly.

Paul: <unk>.

Paul: I also think we're our teams I like to give this is rory I'd like to give a planning and allocation organization a lot of credit.

Operator: In closing, I want to emphasize that we are laser-focused on growing our top line, increasing profitability, and will strive to exceed our plans. We are in an excellent position, both operationally and financially, to take advantage of the opportunities we see to further grow our business while simultaneously returning significant cash to our shareholders. Now, we are happy to take your questions. As we do every quarter, we're going to ask that you please limit your questions to one per person so we can keep the call on schedule and answer as many questions as we can. Thanks, and now we'll open up for questions. Thank you. As a reminder, if you would like to ask a question, please press star one. If you need to withdraw your question, you may do so at any time by pressing star two.

Paul: Because they look for trends and our system is sophisticated enough to look for the.

Paul: The trends in nearby store closures and how they affect our store and a home goods or a <unk> start and then we're able to watch that trends and ship back and capitalize on the on the market share opportunity.

Paul: One indirect byproduct and I know youre not asking this but I would like to mention to everyone on the call one of the things Thats happening with all the store closures is the appoint importance to the vendor community keeps rising for our merchants our midst.

Paul: Brick and mortar competition, so to speak so one of the it hasnt been a question yet because we're not there in the order.

Paul: Merchandize margin opportunities I think one of the benefits as we look forward is the importance that our buyers have to the vendor community.

Paul: And.

Paul Lejuez: Our first question comes from the line of Paul Lejuez from Citigroup. Please go ahead. Hey, thanks guys. Um, you've got your margin guidance overall for the year, but I'm curious how you think about profit margins at each of the segments. This year, where do you have the most opportunity and what is assumed in your guidance, which segments are up, which are down? And then Ernie, just any quick comments on the Macy's news yesterday, how you're thinking about the store closure opportunity, and what that might mean for you guys. Transcribed by https://otter.ai Yeah, Paul, to start off, you know, in this call, we're not going to get into the detail by division, just to say that we're very confident in the plans we have to execute them, and we're pleased to be increasing 10 basis points on a 2-3 comp. Yeah, yeah. Paul, on the, on the...

Paul: That is one of the things that probably will continue to allow us to buy a little bit better on an ongoing basis.

Paul: So it's indirectly related to the store closure question I thought I'd point that out.

Speaker Change: Thanks, guys. Good luck.

Speaker Change: Thank you Paul.

Speaker Change: Next we'll go to the line of brokerage from Goldman Sachs. Please go ahead.

Goldman Sachs: Good morning, and thank you for taking my question.

Goldman Sachs: Ernie you talked a little bit about this already about the opportunity for better buying which could help merch margin, but I was hoping you could contextualize the drivers of merch margin expansion that you're forecasting this year as well as the drivers of expansion that you see on a multiyear basis.

Goldman Sachs: Is this a function of mark on Mark down or further price increases where do you see the most opportunity. Thank you.

Ernie L. Herrman: Yeah, Great question Brook, John where you're going to yes.

Ernie L. Herrman: See a combination of both mark on and markdown favorability in FY 'twenty five so we're quite pleased to see that.

I would tell you broke getting even a little more specific for your question is.

Where the Mark on I think comes which is still your I guess most important component here because we can kind of control that is it's a combination of what I just started to touch on with Paul's question on the buying better.

Ernie L. Herrman: Interesting, the Macy's store closure, this is a little similar to some of the other closures we've talked about over the last few years. Obviously, with the Macy's store closures, you do have a lot of overlapping categories that marry up, which marry up to the businesses that we run. So we would think that would be an additional, and it's probably what you're getting at; I'm guessing an additional market share opportunity, depending on the categories and the locations they're in. So not that we would get all of that, but we would get some of it. That's what we always figure.

Ernie L. Herrman: Also linked with that I didn't get to mentioned is clearly availability, which I did mentioned in the script.

Ernie L. Herrman: His outstanding across the board is always it varies by category and vendor.

Ernie L. Herrman: But at the end of the day, there's more goods out there than we can handle and we're still holding our merchants back.

Ernie L. Herrman: I liked that have happened and it's been this isn't a new thing it's been happening over a number of years now is the importance that our buyers are to the vendor community and the way they handle the vendors and our very courteous manner, but straightforward.

Ernie L. Herrman: And again, we've looked at that with any of the other stores over the last 18, 24 months that have closed, and we look at it similarly. I also think where our teams, I like to give this a lot of credit to our planning and allocation organization, because they look for trends, and our system is sophisticated enough to look for the trends in nearby store closures and how they affect our store in a HomeGoods or a MarMac store, and then we're able to watch that trend and shift back and capitalize on the market share opportunity. One indirect byproduct, and I know you're not asking this, but I would like to mention to everyone on the call, one of the things that's happening with all the store closures is that the importance of the vendor community keeps rising for our merchants amidst less brick and mortar competition, so to speak.

Ernie L. Herrman: Is allowing them to continue to buy better season after season, and I think as we continue to gain market share and the vendors see that their goods being placed in our store in an eclectic mix with even more and more better brands has been an incentive for them to continue to want to work with our buyers even more.

Ernie L. Herrman: So then in the past and obviously this has been evolving over a number of years now so we feel good about the mark on from the buying better perspective, and then I think you touched on this on the retailing of the goods.

Ernie L. Herrman: We still feel there is opportunity again, we've just started over the last few years.

On.

Ernie L. Herrman: We used to call it selectively adjusting retails, where it was appropriate and we still think there's a lot of opportunity there our perception on value is at a very high level across all of our brands and as you can see from our sales momentum.

Ernie L. Herrman: So, you know, one of the, it hasn't been a question yet because we're not there in the order, but merchandise margin opportunities. I think one of the benefits as we look forward is the importance that our buyers have to the vendor community, and that is one of the things that probably will continue to allow us to buy a little bit better on an ongoing basis. So, it's indirectly related to this store closure question. I thought I'd point that out. Thanks, guys. Good luck!

Ernie L. Herrman: The customers are responding extremely well to the values that we have in the store. So I would tell you on the <unk>.

Speaker Change: John mentioned, the markdowns that that's one thing I think the mark on opportunities still exists because of both buying better and retailing goods and.

Speaker Change: Again continues to be.

Speaker Change: Midterm and longer term opportunity I hope that answers that.

Speaker Change: Thank you so much.

Speaker Change: Thank you we'll go to the line.

Speaker Change: Next we'll go to the line of Matthew Boss from Jpmorgan. Please go ahead.

Matthew Robert Boss: Thanks, and congrats on another great quarter.

Brooke Roach: Thank you, Paul. Next, we'll go to the line of Brooke Roach from Goldman Sachs. Please go ahead.

Matthew Robert Boss: So.

Matthew Robert Boss: Ernie with holiday comp driven by transaction could you elaborate on new customer acquisition and market share opportunity that you see and just how do you think your apparel and home Assortments are positioned into spring given the good start that you cited and then maybe John on the margin side, just a follow up I mean with margins now.

Brooke Roach: Good morning, and thank you for taking my question. Ernie, you talked a little bit about this already, about the opportunity for better buying, which could help Merge Margin, but I was hoping you could contextualize the drivers of Merge Margin expansion that you're forecasting this year, as well as the drivers of expansion that you see on a multi-year basis. Is this year a function of mark-on, mark-down, or further price increases? Where do you see the most opportunity? Thank you. Yeah, good, great question, Brooke. And John, were you gonna go?

John: Seeding pre pandemic there is there any change to the historical margin flow through on incremental <unk>.

John: <unk> sales it sounds like you walked through a number of drivers.

Speaker Change: But just thinking about incremental sales and flow through in the model.

Ernie L. Herrman: Yes, Matt Great question, well first.

Ernie L. Herrman: Let's deal with the first one which is the new customer acquisition. We've been very happy we are skewing, we continue to skew.

John: Yeah, I mean, we see a combination of both mark on and mark down favorability in FY 25. So we're quite pleased to see that. I would tell you, Brooke, getting even a little more specific for your question is... Where the mark on comes, I think, which is still your, I guess, most important component here, because, you know, we can kind of control that, is it's a combination of what I just started to touch on with Paul's question on the buying better, also linked with that I didn't get to mention is clearly availability, which I did mention in the But at the end of the day, there are more goods out there than we can handle, and we're still, you know, holding our merchants back. What I like that's happened, and it's been—this isn't a new thing.

Matt: With new customers, we continue to skew a little younger which is what we wanted it bodes well for the future I think I also mentioned that in the in the script one other focus though and I think.

Matt: We had this recently hit the meeting where we talked about is we also are trying to.

Matt: Acquire new customers, but we're trying to in our market and create additional visits out of our existing customers because that is still a huge.

Matt: Driver of market share is if we could get one additional visit out of only 10% of our customers that that is a that is a monster. So yes. We are obviously looking for new customers.

Matt: And happy that they're skewing younger and where we've been happy with the acquisition of new customers, but just say equally here.

Matt: We are.

Matt: We have challenged the organization to try to increase visits and our marketing team we have.

Ernie L. Herrman: It's been happening for a number of years now, the importance that our buyers are to the vendor community. And the way they handle the vendors in a very courteous manner, but straightforward, is allowing them to continue to buy better season after season. And I think as we continue to gain market share and the vendors see that their goods being placed in our store in an eclectic mix with even more and more better brands has been an incentive for them to continue to want to work with our buyers even more so than in the past. And obviously, this has been evolving over a number of years now. So we feel good about the mark-on from the buying better perspective. And then, I think you touched on this.

Matt: Just had a bunch of <unk> and I'm thrilled with what our marketing team has done on their creative for this coming year, we have some great creative and great messaging plans across each brand.

Matt: Recently had marketing meetings.

Matt: For a couple of weeks with every division and we love the messaging, where we're going out and in some cases.

Matt: Trailing to what you just mentioned new customers. Some of our messages are really geared at educating our customer what are prices in the messaging. So that we can try to get those new customers.

Speaker Change: One other thing I'd like to point out on this that's really encouraging we always talk about how we trade broadly and in the call here. We've talked about different income demographics are really neat thing I think for everyone to remember is we're very balanced actually relative to the population of the United States We are back.

Ernie L. Herrman: On the retailing of the goods, we still feel there's opportunity. Again, we've just started over the last few years on, as we used to call it, selectively adjusting prices where it was appropriate. And we still think there's a lot of opportunity there. Our perception of value is at a very high level across all of our brands. And as you can see from our sales momentum, the customers are responding extremely well to the values that we have in the store. So I would tell you on the – John mentioned markdowns. That's one thing.

Speaker Change: On age and income demographics, and a very appropriate manner, we're not.

Speaker Change: Some retailers can skew towards different categories. We actually are at the point now where we over index in the age 18 to 34.

Speaker Change: So we're slightly over the population average with those shopping our stores, which I think bodes really well.

Speaker Change: For the future and then on income demographics, we're very balanced by category under $50050 to 99000 over 100.

Ernie L. Herrman: I think the mark-on opportunity still exists because of both buying better and retailing goods. And I think, again, it continues to be a midterm and longer-term opportunity. Hope that answers that question.

Speaker Change: We skew a little bit more to the over 50000 and.

Speaker Change: And above that.

Speaker Change: So.

Speaker Change: Great question, obviously, we spent a lot of time on it.

Matthew Robert Boss: Thank you so much. Next, we'll go to the line. Next we'll go to the line for Matthew Boss from J.P. Morgan. Please go ahead. Thanks and congratulations on another great quarter. Thank you. Ernie, with holiday comps driven by transaction, could you elaborate on the new customer acquisition and market share opportunity that you see? And just how do you think your apparel and home assortments are positioned into spring, given the good start that you cited? And then maybe, John, on the margin side, just to follow up, I mean, with margins now exceeding pre-pandemic levels, is there any change to the historical margin flow through on incremental above-plan sales? It sounds like Ernie walked through a number of drivers, but just thinking about incremental sales and flow through in the model. Yeah, Matt, great question.

Speaker Change: The second part.

Speaker Change: Just say on the income demographic when you look at our sales performance in the fourth quarter was very consistent across our income demographic bands that we look at particularly.

Speaker Change: Particularly in the U S divisions.

Speaker Change: But yes as far as the sales incremental flow through I would say that we.

Speaker Change: It's very consistent with what we've been saying all along we see our lever point somewhere between a three to four comp.

Speaker Change: As we said in the script and I don't think anything has changed on that.

Speaker Change: And that was the last part of your question was that about our go forward was it about the home business.

Speaker Change: Yes, just opportunities you mentioned spring off to a good start just any elaborating on on your Assortments in apparel and home into the spring apparel at home you had said right. So yes I have to tell you that we did not we were not.

Speaker Change: At the beginning of February we were getting hit with the weather that I think than even our across the country. So we that was holding back our comps a little in the first couple of weeks of February.

Ernie L. Herrman: Well, first, let's deal with the first one, which is the new customer acquisition. We've been very happy. We are skewing.

Ernie L. Herrman: We continue to attract new customers, and we continue to skew a little younger, which is what we wanted. It bodes well for the future. I think I also mentioned that in the script.

Speaker Change: Even though we were we were within our guidance range and.

Speaker Change: And then over the last really the last couple of weeks our business got stronger when the weather was more normalized three from week three on we were.

Ernie L. Herrman: One other focus, though, and I think... We had this recently at a meeting where we talked about it is that we also are trying to acquire new customers, but we're trying to, in our marketing, create additional visits from our existing customers. Because that is still a huge driver of market share, and if we could get, you know, one additional visit out of only 10% of our customers, that that is a monster. So, yes, we are obviously looking for new customers. And happy that they're skewing younger.

Speaker Change: We are much happier with our comps. So that's why we're off to a good start and by the way I would say that we.

Speaker Change: When the weather is like that it can affect your apparel, but we were still pretty pleased with where we are trend and given the weather and our home business I would tell you again I don't want to take up too much more time on this section, but our home business as you could tell from our Q4 and as we go into spring and this year as I mentioned in the script, we just feel a just a.

Speaker Change: Massive opportunity and market share because our home business, we do it so differently than really anybody anybody else. We don't have competition the same way, whether it's all the fashion aspects of what we do in our home.

Ernie L. Herrman: And we're happy with the acquisition of new customers. But just so you know, we have equally challenged the organization to try to increase visits, and our marketing team, we just had a bunch of them, and I'm thrilled with what our marketing team has done with their creative for this coming year. We have some great creative and great messaging plans across each brand. I recently had marketing meetings for a couple of weeks with every division, and we love the messaging where we're going out and, in some cases, appealing to what you just mentioned, new customers. Some of our messages are really geared at educating a customer about our prices in the messaging so that we can try to get those new customers. One other thing I'd like to point out about this that's really encouraging.

Speaker Change: Some of the categories that are more replenishment, where we are.

Speaker Change: Increasing our steady traffic and home goods, because we have items that customers replenish and then you have utilitarian items that we sell so homegoods is such an eclectic treasure hunt that it's really a special place in terms of <unk>.

Speaker Change: Impulse buying and I think just huge market share opportunity there and we're positioned I love the way that team is positioned.

Speaker Change: And that isn't just I'm not talking just about Homegoods I'm talking about the home area and <unk> has been really strong home area are over in TK Maxx.

Speaker Change: And then winners.

Speaker Change: Marshalls in Canada.

Both family stores have been running a strong home business and its also continuing that way as we enter spring.

Speaker Change: Yes.

Ernie L. Herrman: We always talk about how we trade broadly, and in this call here, we've talked about different income demographics. A really neat thing, I think for everyone to remember, is that we are very balanced actually relative to the population of the United States.

Speaker Change: Let me just.

Add on to what I was talking about as far as.

Speaker Change: The incremental sales flow through.

Speaker Change: So as we said in the past.

Speaker Change: For every point in comp 15 basis points.

Speaker Change: And again unchanged from what we've been saying.

Speaker Change: Great color congrats again.

Speaker Change: Thank you.

Ernie L. Herrman: We are balanced on age and income demographics in a very appropriate manner. We're not, as some retailers can skew towards different categories; we actually are at the point now where we over index in the age 18 to 34. So we're slightly over the population average with those shopping in our stores, which I think bodes really well for the future. And then on income demographics, we're very balanced by category, from under 50,000 to 99,000 and over 100.

Speaker Change: Next we'll go to the line of Lorraine Hutchinson from Bank of America. Please go ahead.

Lorraine Hutchinson: Thank you good morning.

Lorraine Hutchinson: I was hoping to get your outlook for pricing for this year do you still see an opportunity for like for like price increases throughout the assortment and then also how will mix factor into your outlook for total AUR in fiscal 'twenty five.

Sure no.

Speaker Change: Both on point, there Lorraine Yeah, no. We feel there is still opportunity on the like for like pricing.

Speaker Change: As we look we comp shop, so regularly our buyers are so good at that and we can see.

Lorraine Hutchinson: Specific items here and there where we could be going up a price point again, it's you would never notice it because we're not we're doing it so sparingly throughout the assortment. It isn't it isn't a widespread thing, but theres enough that there is opportunity to be doing it.

Ernie L. Herrman: We skew a little bit more to the over the 50,000 and above that. So, great question.

John: Obviously, we spent a lot of time on this. So the second part, I would just say on the income demographic. When you look at our sales performance in the fourth quarter, it was very consistent across our income demographic bands that we look at, particularly in the US divisions. But yeah, as far as the sales incremental flow through, I would say that it's very consistent with what we've been saying all along, you know. We see our lever point somewhere between the three to four comp, as we said in the script, and I don't think anything's changed on that. Matt, what was the last part of your question?

Surgically and different places throughout the store. We can we can just see because other retailers have had to go up and they arent coming down even though inflation has moderated so much cost John and I talk about all the time cost is embedded in all of the businesses out there. So I think that Lorraine is going to still continue for a while this is.

Lorraine Hutchinson: Just a season or a this year thing.

Lorraine Hutchinson:

Speaker Change: Yeah and then.

Speaker Change: I'm sorry, the second part was.

Speaker Change: Okay the mix.

Speaker Change: Was it mix really yes. So the mix is always we are always going after the hottest trending mix I don't.

John: Was that about our going forward, was it about the home business? Yeah, just opportunities. You mentioned spring off to a good start, just any elaborating on your assortments in apparel and home for the spring. Apparel and home, you had said, right? So, yeah, I have to tell you, though, we did not, we were not, at the beginning of February, we were getting hit with the weather that I think many of you know across the country, so that was holding back our comps a little in the first couple of weeks of February, even though we were within our guidance range. And then over the last, really the last couple of weeks, our business got stronger when the weather was more normalized. Yeah, from week three on.

Speaker Change: Our plans right now on our AUR, we don't see the AUR changing that much.

Speaker Change: We've been kind of going after some of the hotter categories and taking down some of the ones that arent and as you know us well, we move very fast to the trends. So we still see some of those categories that we're looking good that we were trying to maximize last year continuing this year.

Speaker Change: Year and on our plans right now we're looking at the <unk> is not changing that much actually.

Speaker Change: We can always go we don't top that's one one as we talked about for some time, we do not top down manage that right.

Ernie L. Herrman: From week three on, we were much happier with our comps. So that's why, you know, we're off to a good start. And by the way, I would say that we... You know, when the weather's like that, it can affect your apparel a little, but we were still pretty pleased with where we were trending, given the weather. And our home business, I would tell you, again, I don't want to take up too much more time on this section, but our home business, as you can tell from Q4 and as we go into spring and this year, as I mentioned in the script, we just feel a massive opportunity for market share because, in our home business, we do it so differently than really anybody, anybody else.

Speaker Change: <unk>.

Speaker Change: What we see our visibility right now looks like they won't change much.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Next we'll go to the line of Jason <unk> from UBS. Please go ahead.

Jason: Great. Thanks, so much I wanted to ask about maybe some of the smaller banners just on home centers. There's a lot of talk in the market that some categories broadly across the U S aren't doing that well, but instead.

I just had a couple of times at home is doing really well.

Jason: Talk about home.

Jason: How thats doing what your store opening plans for <unk>.

Jason: For next year and also just because you mentioned on the script.

Jason: Our trading post do you plan to open more Sierra trading post and can you give us a little bit more color on what youre seeing in that manner.

Speaker Change: Yes definitely.

Speaker Change: So John is looking at their stores once they all go I'm going to tell you one thing on the <unk> mix.

Speaker Change: We make we make adjustments.

It's interesting just similar to what I was just saying to Lorraine, we will go with where the customer is voting again, our model allows us to do this and our teams are experienced so we are in the process and actually they started in fourth quarter. The <unk> team has started.

Ernie L. Herrman: We don't have competition the same way, whether it's all the fashion aspects of what we do in our home, some of the categories that are more replenishment, where we're increasing our steady traffic in home goods, because we have items that customers replenish, and then you have utilitarian items that we sell. So home goods is such an eclectic treasure hunt that it's really a special place in terms of impulse buying, and I think there is just a huge market share opportunity there. And we're positioned, I love the way that team is positioned, and that isn't just, I'm not talking just about home goods. I'm talking about the home area in Marmax has been really strong, the home area in TK Maxx, and in Winners, Marshalls in Canada. All the full family stores have been running a strong home business, and it's also continuing that way as we enter spring. Yeah, and Matt, let me just add on to what I was talking about as far as, you know, the incremental sales flow through. So, as we said in the past, it's for every point in comp, 15 basis points. And again, unchanged from what we've been saying. Great color, congrats again.

Speaker Change: Modifying the mix to go to whats more happening than some of the other categories that have not been that.

Speaker Change: That are big in home sense, but that hasnt been trending as strongly and we started shifting in shoring up our home trend now has picked up dramatically since we made those adjustments.

Speaker Change: So by the way in our Sierra.

Speaker Change: Our sales trend all last year was strong and we've been thrilled with where we're heading there which is why in both of these situations, we're pretty aggressive on store count.

Speaker Change: Yes, I mean, we're really pleased with what we're seeing in our in our we'll call them their seed businesses that were adding 17 homes 10 stores.

Speaker Change: We're adding 26 stores in Sierra and we're also very pleased with what we're seeing in Australia as well.

Speaker Change: We're adding five stores down there. So we're really quite pleased with what we're seeing with the performance of these businesses.

Speaker Change: Sure. Thank you so much because we don't get to talk about the small business is offense. So that's good.

Speaker Change: Thank you.

Lorraine Hutchinson: Thanks. Next, we'll go to the line for Lorraine Hutchinson from Bank of America. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Next we'll go to the line of John Kernan from TD Cowen. Please go ahead.

Ernie L. Herrman: Thank you, good morning. Ernie, I was hoping to get your outlook for pricing for this year. Do you still see an opportunity for like-for-like price increases throughout the assortment? And then also, how will mix factor into your outlook for total AUR and fiscal, Doerr. No, both on point there, Lorraine.

John Kernan: Excellent congrats on a great holiday.

John Kernan: Thank you.

John Kernan: John you talked about unit growth within the guidance in fiscal 'twenty five.

John Kernan: In the context of your long term store targets and also.

John Kernan: The trends with the new store productivity as you open new <unk> and Homegoods stores, how should we think about it.

John Kernan: Real estate availability.

John Kernan: Also the long term outlook for stores. Thank you.

John Kernan: Yes.

Speaker Change: So right now the.

Ernie L. Herrman: Yeah, no, we feel there's still an opportunity for like for like pricing. As we look, we comp shop so regularly, our buyers are so good at that, and we can see specific items here and there where we could be going up a price point. Again, it's you would never notice it because we're not doing it so sparingly throughout the assortment. It isn't, it isn't a widespread thing.

Speaker Change: Yeah.

Speaker Change: What we see in total is unchanged it's just.

Speaker Change: Just under 6300 stores, we see as the potential.

Speaker Change: And.

Speaker Change: As far as store availability.

Speaker Change: We play.

Yeah.

We want to make sure that the stores that we're opening across all of our banners are the right stores for what we for us So we're not necessarily going to.

Speaker Change: Pick a number and then shoot for that number we we make sure that the stores were looking at fit right within our R. R. R store mix.

Ernie L. Herrman: But there's enough that there's opportunity to be doing it surgically in different places throughout the store. We can just see it because other retailers have had to go up, and they aren't coming down, even though inflation is moderated. So much cost; John and I talked about time cost is embedded in all of the businesses out there. So I think that Lorraine is going to continue for a while. This isn't just a season or this year thing. Yeah, and then the, I'm sorry, the second part was a mix. Oh, was it mix related?

Speaker Change: Quite pleased with the performance when they do open so when we see these store openings performance, we're quite pleased with that as well.

Speaker Change: The other thing that that gives us.

Speaker Change: No.

Speaker Change: That really works well with us are the relocations that we do so this year, we're planning 40 relocations and here we're actually finding.

Speaker Change: Better locations in the store trading areas that we're in for stores that are.

Ernie L. Herrman: Yeah, so the mix is always, we are always going after the hottest, trending mix. I don't, in our plans right now, on our AUR, we don't see the AUR changing that much. Um... We've been kind of going after some of the hotter categories and taking down some of the ones that aren't, and as you know, you know us well, we move very fast to the trends, so we still see some of those categories that were looking good, that we were trying to maximize last year, continuing this year You know, we can always go, we don't top, that's one of them, as we talk about this all the time, we do not top-down manage that, but from what we see, our visibility right now looks like it won't change much. Thank you. Next, we'll go to the line of JSOL from UBS. Please go ahead. Great, thanks so much.

Speaker Change: That are coming due as far as leases. So we're able to relocate those stores to the better.

Speaker Change: Shopping pitch in the area. So we see definite improvement in the performance as we do move those stores.

Speaker Change: In Europe.

Speaker Change: We see more opportunity in Germany to open up stores.

Speaker Change: And in the UK for more of our relocations.

Speaker Change: And.

Speaker Change: In the U S and Canada.

Speaker Change: We're also as we see more department stores close.

Speaker Change: We see the opportunity to if we don't have stores in those areas to put stores in some of those areas to be the department stores of that so we're seeing opportunities there for new store growth.

Speaker Change: So that's kind of what we're seeing for the.

Speaker Change: The strategy.

Speaker Change: Understood I guess, one quick follow up would be.

JSOL: I'd like to ask about maybe some of the smaller banners, just on HomeSense. There's a lot of talk in the market that some home categories aren't doing that well. But you know, you've said a couple times that HomeSense is doing really well. Can you talk about HomeSense, how that's doing, what your store opening plans for next year are, and also, just because you mentioned in the script this, you know, Sierra Trading Post, do you plan to open more Sierra Trading Posts and can you give us a little bit more color on what you're seeing in that banner? Definitely.

Speaker Change: Just on other categories outside of apparel.

Speaker Change: Home you spoke about quite.

Speaker Change: Quite a bit on the prior question just what about beauty it feels like its much more elevated in store than it has been in the past, what's the opportunity within beauty and the elevation of that category.

Speaker Change: Yeah I'll jump in here.

Speaker Change: John Yes, the beauty business is obviously you can see from the presentation in the store that's been very healthy for us.

Speaker Change: And I would tell you we see big upside there obviously.

Speaker Change: And we're continuing to go after that.

Speaker Change: We have.

Speaker Change: Done something with a presentation, but <unk> seen the assortments expand as well so as you can imagine that's one of the businesses, we feel as a lot more upside.

John: So, John is looking at the stores. One thing, I'll go. I'm going to tell you one thing about the HomeSense mix. We make adjustments, just like, it's interesting, just similar to what I was just saying to Lorraine. We will go with where the customer is voting. Again, our model allows us to do this, and our teams are experienced. So, we are in the process, and actually, they started in the fourth quarter.

Speaker Change:

Speaker Change: If you look at things that go along with that health and wellness and beauty.

Speaker Change: Some of those other categories in the store obviously.

Kind of go along with that if you know what I mean, so beauties the more noticeable one you're calling out but that trend kind of spills over I would say to some other categories in the store that we're going after.

Speaker Change: And I think we've talked about this before.

Speaker Change: We don't just do it Brian we love that our stores are very flexible so.

Ernie L. Herrman: The HomeSense team has started modifying the mix to go to what's more popular than some of the other categories that have not been, that are big in HomeSense, but that haven't been trending as strongly. And we've started shifting, and sure enough, our HomeSense trend has picked up dramatically since we made those adjustments. So, by the way, in our Sierra, sales trended strong all last year, and we've been thrilled with where we're heading there, which is why, in both of these situations, we're pretty aggressive on store count. Yeah, I mean, we're really pleased with what we're seeing in our, we'll call them their seed businesses, that we're adding 17 HomeSense stores. We're adding 26 new stores in Sierra.

Speaker Change: You bring out beauty one thing you probably noticed is the way we've done the beauty thing, we still can flex the department's around it.

Speaker Change: So that is an advantage again as always I'd like to point that out when our buyers are able to in our planning organization. We're able to go after the hunt business in our flex it in the store very quickly and it doesn't take as much.

Speaker Change: Labor or <unk>.

Speaker Change: Capital to redo the stores, because there aren't any walls et cetera, So great question, though.

Speaker Change: Alright, thank you.

Speaker Change: Thank you.

Speaker Change: Next we will go to the line of Alex <unk> from Morgan Stanley. Please go ahead.

Alex: Perfect I wanted to focus on the home home goods are all quite here. So ended the year at just under a 10% margin I was wondering if you could speak to kind of what's constraining that business below your long term goal of low double digits and when do you think it gets there and then secondly, just on the ability to take <unk>.

John: And we're also very pleased with what we're seeing in Australia as well, where we're adding five stores down there. So we're really quite pleased with what we're seeing with the performance of these businesses. Super, thank you so much.

Alex: <unk> over time, just wondering if theres any color you can provide on particular categories or changes in the market landscape that are going to enable that going forward. Thanks a lot.

Speaker Change: Sure Yeah.

Speaker Change: So I'll start off.

On the margin yeah, so with Homegoods.

Ernie L. Herrman: Okay, because we don't get to talk about small businesses often, so that's good. Thank you. Next, we'll go to the line of John Kernan from TD Cowen. Please go ahead.

Speaker Change: It's a couple of things I mean, homegoods was impacted by freight more than some of the other divisions.

But for home goods, it's about continuing to.

John Kernan: Excellent, congrats on a great holiday. Break. John, you talked about unit growth within the guidance for fiscal 25. And just within the context of your long-term store targets and also some of the trends within new store productivity as you open new Walmart and HomeGoods stores, how should we think about real estate availability? All for the long-term outlook for STORS. Thank you.

Speaker Change: Drive that top line sales growth.

Speaker Change: Well looking at the cost structure of that that freight and continuing to try to be as efficient as possible on that freight line.

The Homegoods team executes.

Speaker Change: Very very well and it's just about continuing to grow.

Speaker Change: Focus on execution drive that topline and be as efficient as we can.

John: Yeah, I mean, right now, what we see in total is unchanged. It's just almost just under 6,300 stores we see as potential, and you know as far as store availability, we we play. We want to make sure that the stores that we're opening across all our banners are the right stores for what we, for us. So we're not necessarily going to, you know, pick a number and then shoot for that number.

Speaker Change: Yeah, and Alex if you look when you're asking about.

Speaker Change: One of the things that's going to also help with the margin is the market share and growth sales growth opportunity that we strongly believe that we have there if you look at.

Speaker Change: If you look at the year that we had there in Homegoods dramatic first half the second half and then even as you went to Q4, you can see how powerful the homegoods sales trend is relative to competition.

Speaker Change: And so it.

John: We make sure that the stores we're looking at fit right within our store mix, and we're quite pleased with the performance when they do open. So when we see these store opening performances, we're quite pleased with that as well. The other thing that gives us, you know, that really works well with us are the relocations that we do. So this year, we're planning 40 relocations.

Speaker Change: It's an unusual thing when the whole business years ago.

Speaker Change: We've had really strong home goods and home trends for years, typically yes, we'd be outpacing competition, but not as dramatically as recently and so that just shows you that.

Speaker Change: The market share, which is I think like a third part of your question. The market share is really up for grabs and Fortunately, what's going on I think in the landscape as you have the E com players on home as well as the brick and mortar.

John: And here we're actually finding better locations in the store trading areas that we're in for stores that are coming due as far as leases are concerned, so we're able to relocate those stores to a better shopping pitch in the area. So we see definite improvement in the performance as we do move those stores. In Europe, we see more opportunity in Germany to open up stores and in the U.K. for more of our relocations. And, you know, in the U.S. and Canada, we also, as we see more department stores close, we see the opportunity to, if we don't have stores in those areas, to put stores in some of those areas to be the department stores of that.

Speaker Change: All creating additional opportunity for our home business because of their execution and their lack of excitement.

Speaker Change: We do believe like our <unk>. So we believe Homegoods is one of the most exciting <unk>.

Speaker Change: Store shopping experiences on the planet really.

Speaker Change: And you've seen that whether you look on tick tock or any of the with third party endorsements that come out on different markets.

Speaker Change: <unk> talk shows had segments on Homegoods lately, it's become it's become a bit of a cult.

John: So we're seeing opportunities there for new store growth. So, you know, that's kind of what we're seeing for the strategy. Okay. I guess one quick follow-up would be just on other categories outside of apparel. You know, home you spoke about quite a bit in the prior questions. But what about beauty?

Cuz people know that you can't go in there and spend less than a couple of under a couple of hundred dollars, even though youre planning on selling it just for a bed pillow. So.

Speaker Change: It's well that's why we're so bullish we also.

Speaker Change: Corporately, it's one of our most collaborative arenas are home merchants or so.

Speaker Change: Our linked up across all the organizations, which is why we are bullish on total T. J Maxx home business, which as you know we've talked in the past is over a third of our.

John Kernan: It feels like it's much more elevated in-store than it has been in the past. What's the opportunity within beauty and the enhancement of that category? Yeah, I'll jump in here, John.

Speaker Change: Over a third of our business will be home business and T. J X this year.

Speaker Change: Heading to a higher percentage over the next few years, that's what we believe.

Ernie L. Herrman: Yeah, the beauty businesses, obviously, you can see from the presentation of the store, that's been very healthy for us. And I would tell you, we see a big upside there, obviously. And we're continuing to go after that.

Speaker Change: So youre touching on it what I think is a competitive advantage and future.

Speaker Change: <unk> to be traffic drivers for T J Maxx.

Speaker Change: Okay.

Great. Thanks, so much.

Speaker Change: Yes.

Speaker Change: Thank you next we'll go to the line of Michael Binetti from Evercore ISI. Please go ahead.

Ernie L. Herrman: We've done something with the presentation, but you've seen the assortments expand as well. So, as you can imagine, that's one of the businesses we feel has a lot more upside. If you look at things that go along with that health and wellness and beauty thing, some of those other categories in the store obviously kind of go along with that, if you know what I mean. So beauty is the more obvious one you're calling out, but that trend kind of spills over, I would say, to some other categories in the store that we're going after. And I think we've talked about this before. We don't just do it plain.

Michael Binetti: Hey, guys congrats on a great quarter.

Michael Binetti: Let me I just wanted to ask.

Michael Binetti: A little bit on the margins I know you've talked about a little bit today, but.

Michael Binetti: Its remarkable to see the profitability you guys are putting up particularly when competitors are looking at stores and saying look the economics are going the other way and we're going to we're going to close a few stores.

Michael Binetti: As we think about Max that was a 14% to 15% margin business at its peak with labor and supply chain stabilizing a bit now and you have you have this pricing lever that you didn't really have or flex before COVID-19 are there any reasons why <unk> is in a structurally higher business in the long term given it's now above 2019 levels.

Ernie L. Herrman: We love that our stores are very flexible. You're bringing up beauty. One thing you probably notice is the way we've done the beauty thing; we still can flex the departments around it. And so that is an advantage. Again, as always, I like to point that out.

Speaker Change: And then I guess as a follow up John you did you did mentioned earlier that you have.

Our long term, 3% to 4% same store sales growth is flat to 10% or sorry flat to 10 basis point leverage.

Speaker Change: Algo, but this year is flat to 10 basis points on a two to three comp Something's a little better this year and then it normalizes next year, if we get out to the middle of the year and Youre running above the two to three again any reason it wouldn't flow through at a better rate unemployment Thompson.

Ernie L. Herrman: When our buyers are able to in our planning organization, we're able to go after the hot business and flex it in the store very quickly. And it doesn't take as much labor or capital to, you know, redo the stores because there aren't any walls, etc. So, great question, Mark. All right, thank you.

Speaker Change: 15 basis points that you mentioned.

Thompson: Yes, I mean, so I'll pick up the last part of your question first.

Speaker Change: Yes, we had some.

One time.

Alex Stratton: Thank you. Next, we'll go to the line of Alex Stratton from Morgan Stanley. Please go ahead.

Speaker Change: Headwinds so.

Speaker Change: Whether it's the incentive accruals or homegoods dot com that negatively impacted us last year that that.

John: Perfect. I wanted to focus on home goods real quick here. So, end of the year at just under a 10% margin, I was wondering if you could speak to kind of what's constraining that business below your long-term goal of low double digits and when you think it will get there. And then, secondly, on the ability to take market share over time, just wondering if there's any color you could provide on particular categories or changes in the market landscape that are going to enable that going forward. Thanks a lot.

Speaker Change: Helped us to offset.

Speaker Change: What we see as continued wage pressure.

Speaker Change: So we were able to.

Speaker Change: Be at flat to up 10 on a two to three versus a three to four.

Speaker Change: That makes sense.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: As far as well go ahead and then in this year does it in this year is the flow through.

Speaker Change: Still the same though on a point of upside or is it also different margin profile.

Speaker Change: At 15 basis points holds true in FY 'twenty five as well for every point of comp opportunity.

Speaker Change: And then as far as Maher Max goes.

Ernie L. Herrman: I'll start off with HomeGoods. HomeGoods was impacted by freight more than some of the other divisions, but for HomeGoods, it's about continuing to drive that top-line sales growth while looking at the cost structure of that freight and continuing to try to be as efficient as possible on that freight line. The HomeGoods team executes very, very well, and it's just about continuing to focus on execution, drive that top line, and be as efficient as we can. Yeah, yeah.

Speaker Change: <unk> three point 13, 7% pre tax profit.

Speaker Change: Yes, I mean.

Speaker Change: Obviously, we had a huge improvement during the year.

Speaker Change: Up 100 basis points and.

Speaker Change: That has to do with again.

Speaker Change: The lower freight rates, even though freight is not back to where it was in FY 'twenty, we're still 100 basis points off.

Speaker Change: Where we were so.

Speaker Change: We've had two.

Speaker Change: Through the merchandise margin has been able to.

Speaker Change: Offset.

Ernie L. Herrman: And Alex, when you look at what you're asking about, one of the things that's going to also help with the margin is the market share and growth, and the sales growth opportunity that we strongly believe that we have there. If you look at the year that we had there in HomeGoods, the dramatic first half, the second half, and then even as you went to Q4, you could see how powerful the HomeGoods sales trend is relative to competition. And so, it's an unusual thing when the whole business started years ago. You know, we've had really strong HomeGoods and home trends for years.

Speaker Change: Some of that headwind.

Speaker Change: And again, we've talked about this in the past that we.

Speaker Change: We don't anticipate freight to come back all the way.

Speaker Change: Just because of the wage increases that we've seen particularly domestic freight.

Rich.

Speaker Change: People that work on the rail or in trucks.

Speaker Change: But we are looking for we continue to look for ways to be more efficient on how we move our freight and Thats really where we see the opportunity.

Speaker Change: Moving forward.

Speaker Change: But again similar to what we talked about Homegoods Maher Max It's again, it's about that strong execution.

Ernie L. Herrman: Typically, yeah, we'd be outpacing competition, but not as dramatically as recently. And so that just shows you that the market share, which is, I think, like a third part of your question, the market share is really up for grabs. And fortunately, what's going on, I think, in the landscape is you have the e-com players on home, as well as the brick and mortar.

Speaker Change: Driving that top line and continuing to.

Speaker Change: <unk>.

Speaker Change: Improve the merchandise margin through better buying.

Speaker Change: Thanks, a lot.

Speaker Change: Thank you.

Speaker Change: And for our final question will go to the line of Marni Shapiro from retail tracker. Please go ahead.

Marni Shapiro: Hey, guys. Congrats on a fantastic year and a lot of my questions have been asked but I do want to dig into one smaller part of your business.

Ernie L. Herrman: All creating additional opportunity for our home business because of their execution and their lack of excitement. We do believe, like our monarchs do, we believe home goods are one of the most exciting store shopping experiences on the planet. And you've seen it, whether you look on TikTok or any of the third-party endorsements that come out on different talk shows have segments on home goods lately. It's become a bit of a cult because people know that you can't go in there and spend less than a couple of hundred dollars, even though you're planning on going in just for a bed pillow.

Marni Shapiro: We talk a little bit about your credit card business.

Marni Shapiro: Lately has that been in your stores that have had some associates asking me if I wanted to credit card I'm curious what percentage of your business is done on your own store credit cards is there an opportunity. There is there a data capture that has been helpful. To you is there an opportunity or loyalty or does that just not really matter because everyone's so addicted they don't need to actually.

Marni Shapiro: Do loyalty because it's a physical addiction could you just dig into this part of the business a little bit. So that's something you guys usually talk about.

Speaker Change: Yes, as far as our credit cargos.

Speaker Change: We don't get into the the amount that goes through on our credit card, but I will say this that.

Ernie L. Herrman: So it's, that's why we're so bullish. We also, corporately, it's one of our most collaborative areas. Our home merchants are so linked up across all the organizations, which is why we're bullish on total TJX home business, which, as we have talked about in the past, is over a third of our business will be home business in TJX this year, heading to a higher percentage over the next few years. That's what we believe. So, you know, you're touching on what I think is a competitive advantage and a future, continuing to be a traffic driver for TJX. Great, thanks so much.

Speaker Change: It's.

Speaker Change: Our penetration is not as high as some of the other retailers that offer incentives to use the card or.

Speaker Change: Our everyday value is our everyday value and we don't want to train the customers into waiting on.

Speaker Change: A discount day to use the credit card. So we're highly focused on making sure that the.

Speaker Change: Messaging for the model itself is not affected.

Speaker Change: That being said.

Speaker Change: The it is the one way that customers can get.

Michael Binetti: Thank you. Next, we'll go to the line of Michael Binetti from Evercore ISI. Please go ahead.

Speaker Change: <unk>.

Speaker Change: When they use a credit card they get coupons back and that drives volume back into our stores.

John: Hey guys, congrats on a great quarter. I just want to ask a little bit about the margins. I know you've talked about it a little bit today, but it's remarkable to see the profitability you guys are putting up, particularly when competitors are looking at stores and saying, look, the economy is going the other way, and we're going to close a few stores. So as we think about, you know, Marmax, that was a 14 to 15% margin business at its peak, with, you know, labor and supply chain stabilizing a bit now, and you have this pricing lever that you didn't really have or flex before COVID. Are there any reasons why Marmax isn't a structurally higher business in the long term, given it's now above 2019 levels?

Speaker Change: So definitely see it as a positive.

Speaker Change: Four are driving customers back to our stores.

Speaker Change: And let's face it.

Speaker Change: It pleases the customers when they when they get that coupon.

Speaker Change: Okay.

<unk>.

Speaker Change: So.

Speaker Change: But.

Speaker Change: Everybody has read the.

Speaker Change: The reports about whether its delinquencies or the potential for <unk>.

Speaker Change: Having.

Speaker Change: The late fees reduced.

Speaker Change: That will impact us, but not as much as some of the other retailers that rely much more heavily on the credit card.

John: And then I guess as a follow-up, John, you did mention earlier that the long-term three to 4% same store sales growth is a flat to 10%, or sorry, flat to 10 basis point leverage algo. But this year it is flat to 10 basis points on a two to three comp. So something's a little better this year, and then it normalizes next year? Or if we get out to the middle of the year, and you're running above the two to three again, any reason it wouldn't blow through at a better rate on the point of comp than the 15 basis points that you mentioned? Yeah, I mean, so I'll pick up the last part of your question first. Yeah, we had some one time, you know, headwinds.

Speaker Change: Is there an opportunity to grow that penetration is that something you guys would look to do.

Speaker Change: There is probably some level of loyalty.

Speaker Change: And increased visitation with those customers.

Speaker Change: Arnie just said we have we have been growing that penetration over.

A number of years right so as much as.

Speaker Change: As much as.

As John pointed out we're not at when other retailers doing they're almost there are credit card programs, but we are.

Speaker Change: Fair amount higher than we were a handful of years ago. So, yes, rightfully, so and those shoppers right John tend to.

Speaker Change: Also cross shop, our different brand correct.

Speaker Change: Great.

And so there's a lot of benefits in our.

Speaker Change: And our sales and as John said when they do it is the only way to get any type of a rebate from us and it does create that extra visit.

John: So, you know, whether it's the incentive accruals or homegoods.com that negatively impacted us last year, that helped us to offset, you know, what we see is continued wage pressure. So we were able to be at flat to up 10 on a two to three versus a three to four. Does that make sense? Yeah, it does.

Speaker Change: So, yes youre right.

Speaker Change: And we're still by the way that's why you get asked in the store, what we're trying to still grow that percentage.

Speaker Change: That's fantastic and we'll talk to you guys later fantastic. Thank you so much.

Speaker Change: Thank you Marni and thanks Marni.

Speaker Change: Alright, well I think that that was our last.

John: In this year, is the flow through still the same on a point of upside, or is it also different? Margin Profile and Applied Solicitor. And then as far as MARMAX goes, you know, at 13.7% pre-tax profit, yeah, I mean, obviously, we had a huge improvement during the year, up 100 basis points, and a lot of that has to do with, again, lower freight rates. Even though freight is not back to where it was in FY20, we're still 100 basis points off where we were. So we've had to, you know, through the merchandise margin, which has been able to, you know, offset some of that headwind. And again, we've talked about this in the past, you know, that we don't anticipate freight coming back all the way, just because of the wage increases that we've seen in particular domestic freight, whether it's people that work on the rail or in trucks.

Speaker Change: Question. Thank you all for joining US today, we look forward to updating you again on our first quarter earnings call in May Thank you everybody.

Ladies and gentlemen that concludes your conference call for today you may disconnect at this time and thank you for participating.

John: But we are looking for, we continue to look for ways to be more efficient in how we move our freight. And that's really where we see the opportunity moving forward. But again, similar to, you know, when we talked about home goods with MARMAX, it's again, it's about that strong execution, driving that top line and continuing to improve the merchandise margin through better buying. Thanks a lot.

Speaker Change: [music].

Marni Shapiro: Thank you. And for our final question, we'll go to the line of Marni Shapiro from Retail Tracker. Please go ahead. Hey guys, congrats on a fantastic year. A lot of my questions have been asked, and I do want to dig into one smaller part of your business.

Marni Shapiro: Can we talk a little bit about your credit card business? Lately, when I've been in your stores, I've had some associates asking me if I want a credit card. I'm curious what percentage of your business is done on your own store credit cards. Is there an opportunity there? Is there a data capture that has been helpful to you? Is there an opportunity or loyalty, or does that just not really matter because everyone's so addicted? You don't need to show loyalty because it's a physical addiction.

John: Can you just dig into this part of the business a little bit? It's not something you guys usually talk about. Yeah, as far as our credit card goes, we don't get into the amount that goes through on our credit card.

John: But I will say this, that our penetration is not as high as some of the other retailers that offer incentives to use the card. You know, our everyday value is our everyday value, and we don't want to train customers into, you know, waiting on, you know, a discount day to use the credit card.

John: So we're highly focused on making sure that, you know, the messaging for our, the model itself is not affected. That being said, you know, the, it is the one way that customers can get, you know, we, you know, when they use the credit card, they get coupons back. And that drives volume back into our stores. So we definitely see it as a positive for driving, you know, customers back into our stores. And, you know, and let's face it, it pleases the customers when they get that coupon. You know, they, you know, so but, you know, you've all read the reports about, you know, whether it's delinquencies or the potential for having, you know, the late fees reduced, you know, that will impact us, but not as much as some of the other retailers that rely much more heavily on the credit card Is there an opportunity to grow that penetration? Is that something you guys would look to do?

Ernie L. Herrman: Because I would think there's probably some level of loyalty and increased visitation among those customers. So, Arnie, just so we have, we have been growing that penetration over a number of years. Right.

Ernie L. Herrman: Excellent. So as much as, yeah, as much as, as John pointed out, we're not at what other retailers do in their almost their credit card programs, but we are a fair amount higher than we were a handful of years ago. So, yes, rightfully so.

Ernie L. Herrman: And those shoppers, right, John, tend to also cross shop our different brands more, and so there's a lot of benefits in our sales. And as John said, when they do, it is the only way to get any type of rebate from us. And it does create that extra visit. So, yes, you're right.

Marni Shapiro: And we're still, by the way, that's why you get asked in the store. Right. We're trying to still grow that percentage. That's fantastic. We'll talk to you guys later. Fantastic. Thank you so much. Thank you, Marni. All right.

Operator: Well, I think that was our last question. Thank you all for joining us today. We look forward to updating you again on our first quarter earnings call in May. Thank you, everybody. Ladies and gentlemen, that concludes your conference call for today. You may disconnect at this time, and thank you for participating.

Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? https://www.youtube.com.uk https://www.youtube.com.uk, Ladies and gentlemen, thank you for standing by. Welcome to the TJX Company's fourth quarter fiscal 2024 financial results conference call. At this time, all participants are in a listen only mode.

Speaker Change: [music].

Operator: Later, we will conduct a question and answer session. At that time, if you have a question, you will need to press star one. As a reminder, this conference call is being recorded as of today, February 28, 2024. I would now like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of TJX Companies, Inc. Please go ahead.

Speaker Change: Ladies and gentlemen, thank you for standing by welcome to the T. J X companies fourth quarter fiscal 2024 financial results Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session at that time. If you have a question you will need to press star one as a reminder, this conference call is being recorded as of today February 28.

Debra McConnell: Thanks, Ivy. Before we begin, Deb has some opening comments. Thank you, Ernie, and good morning. Today's call is being recorded and includes forward-looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause actual results to vary materially from these statements, including, among others, the factors identified in our filings with the SEC.

Speaker Change: Oh 2024, I would now like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer, and President of the Tea Jacks companies incorporated. Please go ahead Sir.

Speaker Change: Thanks, Ivy before we begin Deb has some opening comments.

Deb: Thank you Ernie and good morning, today's call is being recorded and includes forward looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause the actual results to vary materially from these statements, including among others. The factors identified in our filings with the SEC. Please.

Debra McConnell: Please review our press release for a cautionary statement regarding forward-looking statements, as well as the full safe harbor statements included in the investor section of our website, TJX.com. We have also detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and in the investor section of TJX.com, along with reconciliations to non-GAAP measures we discussed. Thank you, and now I'll turn it back over to Ernie. Good morning.

Deb: Review, our press release for a cautionary statement regarding forward looking statements as well as the full safe Harbor statements included in the investors section of our website T. J X Dot com. We have also detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and in the inverse.

Deb: Your section of T. J X dot com, along with reconciliations to non-GAAP measures. We discuss thank you and now I'll turn it back over to Ernie.

Ernie L. Herrman: Good morning.

Ernie L. Herrman: Joining me in depth on the call is John. I want to start today by recognizing all of our Global Associates for their excellent work in 2023. I truly appreciate their continued commitment to TJX and their focus on our customers. I especially want to thank our Store, Distribution, and Fulfillment Center associates for their hard work and dedication to our company every day. Now, to an overview of our results, beginning with the fourth quarter. I am extremely pleased with our very strong finish to 2023.

Ernie L. Herrman: Joining me and Deb on the call is John.

Ernie L. Herrman: I want to start today by recognizing all of our global associates for their excellent work in 2023.

Ernie L. Herrman: I truly appreciate their continued commitment to T J maxx and their focus on our customers.

Ernie L. Herrman: I, especially want to thank our store distribution and fulfillment center associates for their hard work and dedication to our company every day.

Ernie L. Herrman: Now to an overview of our results beginning with the fourth quarter I am extremely pleased with our very strong finish to 2023.

Ernie L. Herrman: Our fourth quarter sales, profitability, and earnings per share all exceeded our expectations. Overall comp sales were up a strong 5% and were entirely driven by growth in customer transactions. This is great to see as it underscores our ability to continue gaining market share in all of our geographies. I am particularly pleased that our U.S. businesses, Marmax and HomeGoods, continue to enjoy their very strong sales momentum. Also, it was great to see comp sales growth accelerate versus the third quarter at our Canadian and international divisions. We are confident that our exciting assortments and excellent values resonated with shoppers across all of our retail banners this holiday season. We believe our gift-giving selections offer customers something for everyone on their list, and we see being a gift-giving destination as a year-round opportunity for our business.

Ernie L. Herrman: Our fourth quarter sales profitability and earnings per share all exceeded our expectations.

Ernie L. Herrman: Overall comp sales were up a strong 5% and were entirely driven by growth in customer transactions.

Ernie L. Herrman: This is great to see is that underscores our ability to continue gaining market share in all of our geographies.

Ernie L. Herrman: I am, particularly pleased that our U S businesses farmer Mac's at Homegoods continued their very strong sales momentum.

Ernie L. Herrman: Also it was great to see comp sales growth accelerate versus the third quarter at our Canadian and international divisions.

Ernie L. Herrman: We are confident that our exciting assortments and excellent values resonated with shoppers across all of our retail banners. This holiday season.

Ernie L. Herrman: We believe our gift, giving selections offered customers something for everyone on their list and we see being a gift giving destination as a year round opportunity for our business.

Ernie L. Herrman: For the full year, overall sales surpassed $50 billion, marking a milestone for our company. Even more exciting, we still see plenty of opportunities to continue our growth in our markets around the world. For the full year, consolidated comp sales increased 5%.

Ernie L. Herrman: For the full year overall sales surpassed $50 billion, marking a milestone for our company.

Ernie L. Herrman: Even more exciting we still see plenty of opportunities to continue our growth in our markets around the world.

Ernie L. Herrman: For the full year consolidated comp sales increased 5%.

Ernie L. Herrman: Profitability increased significantly, and earnings per share grew double digits, all well above our initial guidance for the year. Importantly, we saw comp sales growth across each of our divisions, again, all driven by increases in customer transactions. We are confident that we will gain market share in every geography that we operate in. Our outstanding performance in 2023 is a testament to the sharp execution of our talented associates around the world and their relentless focus on delivering excellent value to our customers every day. Looking ahead, the first quarter is off to a good start.

Ernie L. Herrman: Profitability increased significantly and earnings per share grew double digits.

Ernie L. Herrman: All well above our initial guidance for the year.

Ernie L. Herrman: Importantly, we saw comp sales growth across each of our divisions again, all driven by increases in customer transactions.

Ernie L. Herrman: We are confident that we gained market share in every geography that we operate in.

Ernie L. Herrman: Our outstanding performance in 2023 is a testament to the sharp execution of our talented associates around the world and their relentless focus on delivering excellent value to our customers every day.

Ernie L. Herrman: Looking ahead, the first quarter is off to a good start.

Ernie L. Herrman: In 2024, we have many initiatives planned that we believe will keep driving sales and attract more shoppers to our store. The availability of quality branded merchandise in the marketplace continues to be outstanding. We are in a terrific position to continue flowing a fresh assortment of goods to our stores and online this spring and throughout the year. Longer term, we see many opportunities to capture additional market share across our geographies, and we are laser focused on increasing the profitability of TJX. We are convinced that our flexibility and commitment to value will continue to be a winning retail formula for many years to come. Before I continue, I'll turn the call over to John to cover our fourth quarter and full year financial results in more detail. Thanks, Ernie.

2024, we have many initiatives planned that we believe will keep driving sales and attract more shoppers to our stores.

Ernie L. Herrman: Availability of quality branded merchandise in the marketplace continues to be outstanding.

Ernie L. Herrman: We are in a terrific position to continue flowing a fresh assortment of goods to our stores and online this spring and throughout the year.

Ernie L. Herrman: Longer term, we see many opportunities to capture additional market share across our geographies and we are laser focused on increasing the profitability of T. J X.

Ernie L. Herrman: We are convinced that our flexibility and commitment to value will continue to be a winning retail formula.

Ernie L. Herrman: For many years to come.

Ernie L. Herrman: Before I continue I'll turn the call over to John to cover our fourth quarter and full year financial results in more detail.

John Kernan: Thanks, Ernie also I also want to add my gratitude to all of our global associates for their continued hard work now.

John: I also want to add my gratitude to all of our Global Associates for their continued hard work. Now, I'll share some additional details on the fourth quarter. As I recap the fourth-quarter results, I'm going to speak to everything on a 13-week basis, which excludes the extra week in the quarter.

John Kernan: Now I'll share some additional details on the fourth quarter.

John Kernan: As I recap the fourth quarter results I'm going to speak to everything on a 13 week basis, which excludes the extra week in the quarter reconciliations detailing the impact of the extra week on our results and other adjustments can be found in today's press release and on the investors section of our website.

John: Reconciliations detailing the impact of the extra week on our results and other adjustments can be found in today's press release and on the investors section of our website. Adjusted net sales grew to $15.5 billion, a 7% increase versus last year. As Ernie mentioned, consolidated comp store sales increased 5% above the high end of our plan and were entirely driven by an increase in customer transactions. A quick note that on prior calls, we have referred to customer transactions as customer traffic, but for the sake of clarity, we'll use the term customer transactions going forward. Back to the results.

John Kernan: Adjusted net sales grew to $15 5, billion% to 7% increase versus last year.

John Kernan: As Ernie mentioned consolidated comp store sales increased 5% above the high end of our plan and were entirely driven by an increase in customer transactions.

John Kernan: A quick note that on prior calls we have referred to customer transactions as customer traffic, but for the sake of clarity we will use the term customer transactions going forward.

Back to the results in the fourth quarter, our consolidated comp sales increased in both our apparel and home businesses.

John: In the fourth quarter, our consolidated comp sales increased in both our apparel and home businesses. In terms of divisional sales performance for the fourth quarter, we were pleased to see strong comp sales increases at every division, all driven entirely by customer transactions. At Marmax, I also note that we saw comp increases in both our apparel and home categories. Fourth quarter adjusted pre-tax profit margin of 10.9% was up 170 basis points versus last year. Our adjusted pre-tax profit margin came in well above our plan, primarily due to a higher merchandise margin. This includes a larger than expected benefit from shrinking freight, lower markdowns, and better mark on. We also saw some expense leverage on our above-plan sales. Adjusted gross margin for the fourth quarter was up 340 basis points versus last year. This was driven by a higher merchandise margin, including a significant benefit from lower freight costs and shrink, strong mark-on, and lower mark-down. Fourth quarter adjusted SG&A increased 190 basis points versus last year primarily due to higher incentive accruals and incremental store wage and payroll costs.

In terms of divisional sales performance for the fourth quarter. We were pleased to see strong comp sales increases at every division all driven entirely by customer transactions.

John Kernan: At <unk> also note that we saw comp increases in both our apparel and home categories.

John Kernan: Fourth quarter adjusted pre tax profit margin of 10, 9% was up 170 basis points versus last year, our adjusted pre tax profit margin came in well above our plan primarily due to a higher merchandise margin. This includes a larger than expected benefit from shrink and freight lower.

John Kernan: Downs and better Mark on we also saw some expense leverage on our above planned sales.

John Kernan: Adjusted gross margin for the fourth quarter was up 340 basis points versus last year. This was driven by a higher merchandise margin, including a significant benefit from lower freight costs and shrink strong mark on and lower markdowns.

John Kernan: Fourth quarter, adjusted SG&A increased 190 basis points versus last year, primarily due to higher incentive accruals and incremental store wage and payroll costs.

John: Adjusted net interest income benefited the fourth quarter adjusted pre-tax profit margin by 10 basis points versus last year. Lastly, we were very pleased that adjusted diluted earnings per share of $1.12 were well above our expectations and up 26% versus last year. Now to our fiscal 24 results. Once again, for our full year financial results, I'm going to speak to everything on a 52-week basis, which excludes the extra week in the fiscal

John Kernan: Adjusted net interest income benefited fourth quarter adjusted pre tax profit margin by 10 basis points versus last year.

John Kernan: Lastly, we were very pleased that adjusted diluted earnings per share of $1 12 were well above our expectations and up 26% versus last year.

Speaker Change: Now to our fiscal 'twenty four results.

Speaker Change: Once again for the full year for our full year.

For our full year financial results I'm going to speak to everything on a 52 week basis, which excludes the extra week in the fiscal year.

John: Adjusted net sales grew to $53.3 billion, a 7% increase versus last year. Full-year consolidated comp store sales were up 5%, entirely driven by customer transactions. We were very pleased to see mid-single-digit comp sales increases in both our apparel and home business. The adjusted pre-tax profit margin of 10.9% was up 120 basis points versus last year's adjusted 9.7%. Adjusted gross margin for the full year was 29.9%, up 230 basis points versus last year's 27.6%, primarily driven by a significant benefit from lower freight costs, as well as strong mark-on and 10 basis points of shrink favorability. Shrink was an area that we were very, that we were laser focused on as an organization all year long.

Adjusted net sales grew to $53 3, billion% to 7% increase versus last year.

Speaker Change: Full year consolidated comp store sales were up 5% entirely driven by customer transactions. We were very pleased to see mid single digit comp sales increases in both our apparel and home businesses.

Speaker Change: Adjusted pre tax profit margin of 10, 9% was up 120 basis points versus last year's adjusted nine 7%.

Speaker Change: Adjusted gross margin for the for the full year was 29, 9% up 230 basis points versus last year's 27, 6%, primarily driven by a significant benefit from lower freight costs as well as strong mark on and 10 basis points of shrink favorability.

Speaker Change: Shrink was an area that we were that we were laser focused on as an organization all year long I want to recognize and thank all the associates, who worked extremely hard on our initiatives throughout the year Importantly, we managed our in store initiatives, while delivering a very strong topline and providing a pleasant shopping experience.

John: I want to recognize and thank all the associates who worked extremely hard on our initiatives throughout the year. Importantly, we managed our in-store initiatives while delivering a very strong top line and providing a pleasant shopping experience for our customers. We remain focused on shrink and continue to look for ways to improve this area going forward.

Speaker Change: For our customers, we remain focused on shrink and continue to look for ways to improve this area going forward.

John: Four-year adjusted SG&A was 19.3%, up 140 basis points versus last year's 17.9%. This is primarily due to incremental store wage and payroll costs and higher incentive accruals. Adjusted net interest income benefited full-year adjusted pre-tax profit margin by 30 basis points versus last year. Lastly, full-year adjusted earnings per share were $3.76, up 21% versus last year's adjusted $3.11. Moving to inventory

Speaker Change: Full year adjusted SG&A was 19, 3% up 140 basis points versus last year's 17, 9%. This.

Speaker Change: This was primarily due to incremental store wage and payroll costs and higher incentive accruals.

Speaker Change: Adjusted net interest income benefited full year adjusted pre tax profit margin by 30 basis points versus last year.

Speaker Change: Lastly, full year adjusted earnings per share were $3 76 up 21% versus last year's adjusted $3 11.

Speaker Change: Moving to inventory balance sheet inventory was up 3% versus fiscal 'twenty, three we're happy with our inventory levels and the plentiful availability, we see in the marketplace, we are well positioned to flow fresh assortments to our stores and online this spring.

John: Balance sheet inventory was up 3% versus fiscal 23. We are happy with our inventory levels and the plentiful availability we see in the marketplace. We are well positioned to flow fresh assortments to our stores and online this spring. I'll finish with our liquidity and shareholder distribution. For the full 53-week year, we generated $6.1 billion in operating cash flow and ended the year with $5.6 billion in cash. In fiscal 24, we returned $4 billion to shareholders through our Buy Back and Dividend Program. Now I'll turn it back to Ernie.

Speaker Change: I'll finish with our liquidity and shareholder distributions.

Speaker Change: For the full 53 week year, we generated $6 1 billion in operating cash flow and ended the year with $5 6 billion in cash in fiscal 'twenty. Four we returned $4 billion to shareholders through our buyback and dividend programs now I will turn it back to Ernie.

Ernie L. Herrman: Thanks, John. I'll pick it up with some full-year divisional highlights. As we saw with our strong fourth-quarter sales, every division delivered comp increases for the full year, with customer transactions driving the increases across the business. Again, we believe this is a strong indicator of our ability to continue gaining market share, and it underscores our wide customer demographic. Beginning with Marmax, overall sales well exceeded $30 billion. Comp Store sales increased by a very strong 6%. We also surpassed 2,500 total TJ Maxx and Marshall stores. Marmax's apparel and home categories both conked out for the year.

Ernie L. Herrman: Thanks, John.

Ernie L. Herrman: I'll pick it up with some full year divisional highlights.

Ernie L. Herrman: As we saw with our strong fourth quarter sales every division delivered comp increases for the full year with customer transactions driving the increases across the businesses.

Again.

Ernie L. Herrman: We believe this is a strong indicator of our ability to continue gaining market share and it underscores our wide customer demographic.

Ernie L. Herrman: Beginning with <unk> overall sales well exceeded $30 billion.

Ernie L. Herrman: Comp store sales increased a very strong 6%.

Ernie L. Herrman: We also surpassed 2500 total TJ maxx and Marshalls stores.

Ernie L. Herrman: <unk> apparel and home categories, both comped up for the year.

Ernie L. Herrman: Further, we saw consistently strong comp sales increases across regions and income demographics. As to Marmax's profitability, we were extremely pleased to see Foulier's adjusted segment profit margin improve significantly to 13.7%. As we look ahead, we are very excited about the opportunities that we see to grow our customer base, drive sales, open new stores, and increase the profitability of our largest division. At Sierra, which is reported with Barmax, we were pleased with the continued sales growth. At our online businesses, we added new categories and brands throughout the year to deliver the same freshness and excitement online as we do in our stores. At Home Goods, annual sales grew to nearly $9 billion, and comps grew 3%. It was great to see the home business return to positive comp sales trends.

Ernie L. Herrman: Further we saw consistently strong comp sales increases across regions and income demographics.

Ernie L. Herrman: As to <unk> profitability, we were extremely pleased to see full year adjusted segment profit margin improved significantly to 13, 7%.

Ernie L. Herrman: As we look ahead, we are very excited about the opportunities to see that we see to grow our customer base drive sales opened new stores and increase the profitability of our largest division.

At Sierra which is reported with <unk>, we were pleased with the continued sales growth.

Ernie L. Herrman: Our online businesses, we added new categories and brands throughout the year to deliver the same freshness and excitement online as we do in our stores.

Ernie L. Herrman: At Homegoods annual sales grew to nearly $9 billion and comps grew 3%.

Ernie L. Herrman: It was great to see the home business returned to positive comp sales trends.

Ernie L. Herrman: We are particularly pleased with the acceleration we saw in the second half of the year, with comp sales increasing in high single digits. Additionally, similar to MARMAX, we saw consistent performance across regions and income demographics. Home Goods Adjusted Profitability also improved significantly to 9.4%, and we are getting closer to our goal of returning this division to a double-digit profit margin. During the year, we opened a combined 34 home goods and HomeSense stores. Long term, we see exciting potential to bring our eclectic mix of home fashions to even more consumers across the United States by moving to TJX Canada. Foyer's sales were $5 billion, and Comster's sales increased 3%. Adjusted Segment Profit Margin on a Constant Currency Basis was 14%.

Ernie L. Herrman: We are particularly pleased with the acceleration we saw in the second half of the year with comp sales increasing high single digits.

Ernie L. Herrman: Similar to <unk>, we saw consistent performance across regions and income demographics.

Ernie L. Herrman: Homegoods adjusted profitability also improved significantly to nine 4%.

Ernie L. Herrman: And getting closer to our goal of returning this division to a double digit profit margins.

Ernie L. Herrman: During the year, we opened a combined 34 home goods and home center stores.

Ernie L. Herrman: Long term, we see exciting potential to bring our eclectic mix of home fashions to even more consumers across the United States.

Ernie L. Herrman: Moving the T J X Canada.

Ernie L. Herrman: Full year sales were $5 billion and comp store sales increased 3%.

Ernie L. Herrman: Adjusted segment profit margin on a constant currency basis was 14%.

Ernie L. Herrman: With more than 550 stores across Canada, we are one of the largest apparel and home retailers in the country. We are a top destination for consumers seeking branded merchandise at amazing value. We continue to see opportunities to expand our footprint across Canada and attract new shoppers to all three of our banners at TGX International. Full year sales approached $7 billion, and comp store sales were up 3%. Adjusted segment profit margin on a constant currency basis was 4.6%. As a reminder, in the second quarter, this division's profitability was significantly impacted by a reserve related to a German government COVID receivable.

Ernie L. Herrman: With more than 550 stores across Canada.

Ernie L. Herrman: One of the largest apparel and home retailers in the country.

Ernie L. Herrman: We are a top destination for consumers seeking branded merchandize at amazing value.

Ernie L. Herrman: We continue to see opportunities to expand our footprint across Canada and attract new shoppers to all three of our banners.

Ernie L. Herrman: At <unk> International full.

Ernie L. Herrman: Full year sales approached $7 billion and comp store sales were up 3% adjusted segment profit margin on a constant currency basis was four 6%.

Ernie L. Herrman: As a reminder, in the second quarter. This division's profitability was significantly impacted by a reserve related to a German government Covid receivable.

Ernie L. Herrman: In Europe, we believe our sales growth outperformed many other major brick-and-mortar power retailers in a difficult economy. Australia delivered very strong sales growth, and we continue to open stores in new markets. Going forward, we are confident that we can grow our retail banners in each country that we operate in and are highly focused on improving this division's profitability. Going forward, I am confident that we are well positioned to continue our growth around the world and in many kinds of economic and retail environments. Let me briefly remind you of the key characteristics of our business that we believe are a tremendous advantage. First, is our relentless focus on offering our shoppers great value on every item, every day. For us, value means delivering consumers the right combination of brand, fashion, price, and quality, as always. Second, the flexibility of our business model allows us to shift our buying, distribution, and store mix to quickly react to the hottest trends in the marketplace and changing consumer preferences. Further, the globalness of our business allows us to create a differentiated treasure hunt shopping experience in every country that we operate in.

Ernie L. Herrman: In Europe, we believe our sales growth outperformed many other major brick and mortar apparel retailers in a difficult economy.

Ernie L. Herrman: Australia delivered very strong sales growth and we continue to open stores in new markets.

Ernie L. Herrman: Going forward, we are confident that we can grow our retail banners in each country that we operate in and are highly focused on improving this division's profitability.

Ernie L. Herrman: Going forward I am confident that we are well positioned to continue our growth around the world and in many kinds of economic and retail environments.

Ernie L. Herrman: Let me, let me briefly remind you of the key characteristics of our business that we believe are tremendous advantage.

First is our relentless focus on offering our shoppers great value on every item every day for us value means delivering consumers the right combination of brand fashion price and quality as always.

Second is the flexibility of our business model that allows us to shift our buying distribution and store mix to quickly react to the hottest trends in the marketplace and changing consumer preferences.

Ernie L. Herrman: Further our global mix of our business allows us to create a differentiated treasure hunt shopping experience in every country that we operate in.

Ernie L. Herrman: Third we successfully operated stores across a wide customer demographic our ability to offer a differentiated mix of good better and best merchandise at each of our stores allows us to appeal to value conscious shoppers across a broad range of income.

We successfully operate stores across a wide customer demographic. Our ability to offer a differentiated mix of good, better, and best merchandise at each of our stores allows us to appeal to value-conscious shoppers across a broad range of income demographics. Further, each of our divisions continue to attract an outsized number of younger customers to its stores, which we believe bodes well for the future. Next, we are extremely confident that there is more than enough inventory available in the marketplace to support our growth plan. In 2023, our more than 1,300 buyers sourced goods from an universe of more than 21,000 vendors, including

Ernie L. Herrman: Demographics.

Ernie L. Herrman: Further each of our divisions continue to effect, an outsized number of younger customers to our stores.

Ernie L. Herrman: <unk>, an outsized outsized number of younger customers to our stores, which we believe bodes well for the future.

Ernie L. Herrman: Next we are extremely confident that there is more than enough inventory available in the marketplace to support our growth plans.

Ernie L. Herrman: In 2023 or more than 1300 buyers source goods from a universe of more than 21000 vendors.