Q3 2025 The TJX Companies Inc Earnings Call

As the pits 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 November 'twenty 'twenty 'twenty four I would like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer.

Thanks Sheila.

Again.

Being recorded and includes forward-looking statements about our results and plans.

Thank you, Ernie and good morning. Today's call is

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.

Ernie Herrman: And president of the Tea Jack's companies Inc. Please go ahead Sir.

Please review our press release for a cautionary. Statement regarding forward-looking statements

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

In the investor section of our website tjx.com.

As well as the full Safe Harbor statements include.

Speaker Change: 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.

We've also detailed the impact of Foreign Exchange and our Consolidated results and our International

divisions in today's press release and in the investor section of tjx.com, along with the reconciliations to non-GAAP measures, we discussed

Speaker Change: <unk> among others the factors identified in our filings with the SEC.

Thank you and now I'll turn it back over to Ernie.

Speaker Change: Please review our press release for a cautionary statement regarding forward looking statements as.

Good morning, joining me and Deb on the call is John

I want to begin our call today by saying that our hearts go out to all of our Associates, their families.

Speaker Change: As well as the full safe Harbor statements included in the investors section of our website <unk> Dot com.

And everyone who has been affected by Hurricane Seline and Milton.

Speaker Change: 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 investors section of T. J X Dot com.

To help with relief efforts, we made essential emergency supplies and resources available to our Associates and the impact.

Acted areas.

Speaker Change: Along with the reconciliations to non-GAAP measures we discuss.

We also made emergency donations to the world Central kitchen and the American Red Cross through our TJX Foundation.

Speaker Change: Thank you and now I'll turn it back over to Ernie.

Ernie Herrman: Good morning, joining me and Deb on the call is John.

Ernie Herrman: I want to begin our call today by saying that our Hearts go out to all of our associates their families and.

Ernie Herrman: And everyone, who has been affected by Hurricanes Helene and Milton.

Ernie Herrman: To help with relief efforts, we made essential emergency supplies and resources available to our associates in the impacted areas.

Ernie Herrman: We also made emergency donations to the world Central kitchen, and the American Red Cross through our T. J Maxx Foundation.

Ernie Herrman: We take our commitment to supporting community seriously and try to help local communities during times of need through our long standing relationships with organizations that provide critical support.

Ernie Herrman: Now to our business update and third quarter results.

Ernie Herrman: I am very pleased with our third quarter performance I want to personally. Thank all of our global associates for their continued hard work and commitment to T J X.

Ernie Herrman: Comp store sales growth of 3% came in at the high end of our plan.

Ernie Herrman: And I'm, particularly pleased with the operational execution.

Cross all of our divisions as each delivered comp store sales increases entirely driven by customer transactions.

Ernie Herrman: I want to specifically highlight our European team for their efforts and strong results, which drove the 7% calming comp increase at our T. J Maxx International Division.

Ernie Herrman: Clearly, our terrific assortment and great values across our retail banners resonated with many of our shoppers when they visited our stores.

Ernie Herrman: In terms of profitability pre tax profit margin and earnings per share both well exceeded our plans.

Ernie Herrman: With our third quarter performance, we are once again, raising our full year outlook for pre tax profit margin and earnings per share.

Speaker Change: John will talk to our profitability performance and guidance in more detail in a moment.

Ernie Herrman: Yes.

Looking ahead, the fourth quarter is off to a strong start.

Ernie Herrman: We continue to see outstanding availability of goods across a wide range of brands, which gives us great confidence in flowing fresh exciting assortments to our stores and online this holiday season and beyond.

Ernie Herrman: Longer term, we are excited about the opportunities we see to gain additional market share and continue our successful growth in the United States and internationally.

Ernie Herrman: I'll talk more about our holiday plans and our opportunities for global growth in a moment.

Ernie Herrman: But first I'll turn the call over to John to cover our third quarter results in more detail.

John: Thanks Ernie.

Ernie Herrman: I also want to add my gratitude to all of our global associates for their continued dedication to T J X.

Ernie Herrman: Now I'll share some additional details on the third quarter as Ernie mentioned, our consolidated comp sales increased 3%, which was at the high end of our plan and entirely driven by customer transactions.

Ernie Herrman: Once again, both our apparel and home categories saw comp sales increases this quarter.

Ernie Herrman: The tax profit margin of 12, 3% was up 30 basis points versus last year.

Ernie Herrman: Pre tax profit margin was 40 basis points above the high end of our plan primarily due to a benefit from the timing of certain expenses most of which we expect will reverse out in the in the fourth quarter expense savings and higher net interest income.

Ernie Herrman: Gross margin was 50 basis points was up 50 basis points versus last year. This favorability was primarily due to an increase in merchandise margin.

Ernie Herrman: SG&A increased 10 basis points versus last year.

This increase was due to incremental store wage and payroll costs, which largely offset the year over year benefit from closing home goods E Commerce business last year and lower incentive compensation expense this year.

Lastly, we're very pleased that diluted earnings per share of $1 14 were up 11% versus last year and also well above plan.

Ernie Herrman: Now to our third quarter divisional performance again this quarter across all of our divisions. The comp increases were entirely driven by customer transactions. We see this as a great indicator of the strength of our value proposition.

Ernie Herrman: At <unk> comp store sales increased 2% and segment profit margin was 14, 3% up 30 basis points versus last year.

Ernie Herrman: During the third quarter <unk> sales were negatively impacted by store closures due to the hurricanes.

Ernie Herrman: <unk> apparel and home categories, both saw comp sales increases we.

Ernie Herrman: We are excited about the initiatives, we have planned to drive sales and customer transactions at T. J Maxx and Marshalls. This holiday season further we have some great merchandize plans for our U S e-commerce sites in our Sierra business long term, we remain confident that <unk> our largest division.

<unk> can further grow its customer base and increase its market share.

Ernie Herrman: Homegoods comps store sales increased 3% segment profit margin grew.

Ernie Herrman: To 12, 3% up 200 basis points versus last year.

Ernie Herrman: As a reminder, last year, we had a significant negative impact from the costs associated with the closing of our home goods online business during.

Ernie Herrman: During the third quarter, we were proud to open our 1000th store and our Homegoods Division a terrific milestone with a highly differentiated mix of eclectic merchandise from around the world. We believe that both homegoods and homes are well positioned to capture additional share of the U S market or.

Ernie Herrman: Over the long term.

As a reminder, last year we had a significant negative impact from the costs associated with the closing of our home goods online business.

Ernie Herrman: At <unk>, Canada, our comp store sales were up 2% segment profit margin on a constant currency basis was 15, 2% down 170 basis points versus last year.

During the third quarter, we were proud to open our 1,000th store in our Home Goods Division, a terrific milestone.

I want to mention that most of the year over year decline in Canada's margin was due to some non reoccurring items last year and this year that impacted our impacted our year over year comparability.

with a highly differentiated mix of eclectic merchandise from around the world, we believe that both HomeGoods and HomeSense are well positioned to capture additional share of the U.S. market over the long term.

Ernie Herrman: That along with increased freight costs due to the rail.

To do the rail shutdown.

At TGX Canada, our comp store sales were up 2%. Segment profit margin on a constant currency basis was 15.2%, down 170 basis points versus last year.

Ernie Herrman: We are the only major off price retailer in Canada, we have a very loyal customer base.

Ernie Herrman: Our offering well recognized retail brands across good better and best categories. We believe that this sets us up well to attract even more customers to all three of our Canadian banners.

I want to mention that most of the year-over-year decline in Canada's margin was due to some non-reoccurring items last year and this year that impacted our year-over-year comparability.

Speaker Change: At <unk> International comp store sales increased 7% with strong increases in both Europe and Australia.

That, along with increased freight costs due to the rail shutdown.

Speaker Change: Segment profit margin on a constant currency basis improved seven 2% up 100 180 basis points versus last year as Ernie said, we're very pleased with our European results, which drove this division's overall performance.

We're the only major off-price retailer in Canada. We have a very loyal customer base and are offering well-recognized retail brands across good, better, and best categories.

We believe that this sets us up well to attract even more customers to all three of our Canadian banners.

Speaker Change: Going forward, we are confident that we can gain additional share of both the European and Australian retail markets and increase this division's profitability.

Speaker Change: At TJX International, Cobb Store sales increased 7% with strong increases in both Europe and Australia.

Speaker Change: We will have more to say on our international growth opportunities in a moment.

Speaker Change: Segment profit margin on a constant currency basis improved 7.2%, up 180 basis points versus last year. As Ernie said, we are very pleased with our European results, which drove this division's overall performance.

Speaker Change: Moving to inventory balance sheet inventory was up 1% and inventory on a per store basis was down 2% driven by lower holdings at our distribution centers, we feel great about our liquidity and the outstanding availability, we're seeing in the marketplace, we are very well positioned to flow.

Speaker Change: Going forward, we are confident that we can gain additional share of both the European and Australian retail markets and increase this division's profitability. Ernie will have more to say on our international growth opportunities in a moment.

Speaker Change: Fresh assortments to our stores and online throughout the holiday season.

I'll finish with our capital allocation.

Speaker Change: We were very pleased to generate another quarter of strong cash flow. While also reinvesting in the growth of our business and returning cash to shareholders through our buyback and dividend programs.

Speaker Change: Moving to inventory. Balance sheet inventory was up 1%, and inventory on a per-store basis was down 2%, driven by lower holdings at our distribution centers.

Now I'll turn it back to Ernie.

Ernie Herrman: Thanks, John.

Speaker Change: We feel great about our liquidity and the outstanding availability we're seeing in the marketplace. We are very well positioned to flow fresh assortments to our stores and online throughout the holiday season.

Ernie Herrman: Now I'll highlight the opportunities, we see that give us confidence.

That we can keep driving sales and customer transactions in the fourth quarter.

Ernie Herrman: First and most importantly, we remain committed to delivering outstanding value to our shoppers every day.

I'll finish with our capital allocation.

Speaker Change: We were very pleased to generate another quarter of strong cash flow, while also reinvesting in the growth of our business and returning cash to shareholders through our buyback and dividend programs. Now I'll turn it back to Ernie.

This holiday season consumers can expect to see great value throughout our stores every time they shop us we see this as a meaningful advantage as consumers can shop, our excellent values every day and not have to wait for sales or promotional days elsewhere.

Ernie: Thanks John. Now I'll highlight the opportunities we see that give us confidence that we can keep driving sales and customer transactions in the fourth quarter.

Ernie Herrman: Second with the outstanding availability, we have been seeing in the marketplace, we are well positioned as a destination for gifts this holiday season.

Ernie: First, and most importantly, we remain committed to delivering outstanding value to our shoppers every day.

Ernie Herrman: Each of our banners are set up extremely well to offer shoppers across a broad range of income demographics and exciting selection of gifts at price points that can meet their budgets.

With gift offerings and every department, we believe our stores are an appealing one stop shopping destination for consumers to buy for everyone on their list.

Ernie: Second, with the outstanding availability we have been seeing in the marketplace, we are well positioned as a destination for gifts this holiday season.

Ernie Herrman: Further after the holiday season, we'll continue our focus on being a year round gifting destination.

Ernie: Each of our banners are set up extremely well to offer shoppers across a broad range of income demographics an exciting selection of gifts at price points that can meet their budgets.

Ernie Herrman: Next as we do all year long, we plan to flow fresh merchandise to our stores and online multiple times, a week, which we believe is a key differentiator of our business.

Ernie: With gift offerings in every department, we believe our stores are an appealing one-stop shopping destination for consumers to buy for everyone on their list.

Ernie Herrman: With our ever changing assortment of merchandise, we are confident that shoppers can see something new every time they visit.

In addition, we feel great about our plans to flex our stores after the holidays to the categories and trends, we believe consumers will be looking for to start the new year.

Ernie: Further, after the holiday season, we'll continue our focus on being a year-round gifting destination.

Ernie: Next, as we do all year long, we plan to flow fresh merchandise to our stores and online multiple times a week, which we believe is a key differentiator of our business.

Lastly.

Ernie Herrman: We feel great about our holiday marketing campaigns, which launched earlier this month.

Ernie Herrman: Each of our brands are emphasizing gift, giving and reinforcing our value leadership.

Ernie: With our ever-changing assortment of merchandise, we are confident that shoppers can see something new every time they visit. In addition, we feel great about our plans to flex our stores after the holidays to the categories and trends we believe consumers will be looking for to start the new year.

We plan to showcase a wide selection of quality products to highlight that there is something for everyone and demonstrate that our great values or avail.

Ernie Herrman: Available to everyone every day.

Ernie Herrman: Further we plan to advertise through a variety of media channels with an emphasis on digital to reach consumers across a wide age and income demographic who are seeking gifting inspiration.

Ernie: Lastly, we feel great about our holiday marketing campaigns, which launched earlier this month.

Ernie: Each of our brands are emphasizing gift-giving and reinforcing our value leadership. We plan to showcase a wide selection of quality products to highlight that there is something for everyone and demonstrate that our great values are available to everyone every day.

Ernie Herrman: Moving on we believe we are in an excellent position to continue capitalizing on the growth of off price around the world and further grow our leadership position.

Ernie Herrman: Giving me confidence is our very long track record of executing our flexible business model and our value leadership.

Ernie: Further, we plan to advertise through a variety of media channels with an emphasis on digital to reach consumers across a wide range and income demographic who are seeking gifting inspiration.

Ernie Herrman: We strongly believe that our decades of off price expertise and knowledge is a tremendous advantage and will allow us to continue delivering comp store sales growth.

Ernie: Moving on, we believe we are in an excellent position to continue capitalizing on the growth of off-price around the world and further grow our leadership position.

Ernie Herrman: Driving customer transactions and attracting new shoppers.

Next we continue to see a significant opportunity to follow to further grow our store base and our existing countries.

Ernie: Giving me confidence is our very long track record of executing our flexible business model and our value leadership. We strongly believe that our decades of off-price expertise and knowledge is a tremendous advantage and will allow us to continue delivering comp store sales growth.

Ernie Herrman: With over 5000 stores today, we continue to see the potential to open another 1200 plus stores with just our current retail banners in our current countries.

Ernie Herrman: Beyond this you have heard me say before that we believe our off price model can work wherever consumers seek fashion and brands at great prices.

driving customer transactions and attracting new shoppers.

Ernie: Next, we continue to see a significant opportunity to follow to further grow our store base in our existing countries.

Ernie Herrman: That said.

Ernie Herrman: I am excited to announce today that we are planning to expand our TK maxx in Spain.

Ernie: With over 5,000 stores today, we continue to see the potential to open another 1,200-plus stores with just our current retail banners in our current countries.

Ernie Herrman: We've been looking at the Spanish market for quite some time and are confident that the timing is right and that we have a strong understanding of the marketplace and the consumer.

Ernie Herrman: Importantly, other than a small field office in Spain to effectively serve the local market, we plan to leverage our existing European infrastructure and organization.

Ernie: Beyond this, you've heard me say before that we believe our off-price model can work wherever consumers seek fashion and brands at great prices.

Ernie Herrman: We expect our first stores to open in early 2026, and long term, we see the potential to open more than 100 stores in Spain.

With that said...

Ernie: I'm excited to announce today that we are planning to expand our TK Maxx banner in Spain.

Ernie: We've been looking at the Spanish market for quite some time and are confident that the timing is right and that we have a strong understanding of the marketplace and the consumer.

Ernie Herrman: In addition to our current countries and our planned expansion in Spain. We are extremely pleased to gain off price exposure in new markets as well.

Ernie: Importantly, other than a small field office in Spain to effectively serve the local market, we plan to leverage our existing European infrastructure and organization.

Ernie Herrman: Through our JV with Grupo <unk> and our investment in brands for less will now be participating in the growth of off price in Mexico, The UAE, Saudi Arabia and beyond.

Ernie: We expect our first stores to open in early 2026. In long term, we see the potential to open more than 100 stores in Spain.

Ernie Herrman: We are always looking for ways to increase shareholder value and we see these two investments as a good use of cash with an attractive growth and return profile over the long term.

Ernie: In addition to our current countries and our planned expansion in Spain, we are extremely pleased to gain off-price exposure in new markets as well.

Ernie Herrman: All of this gives me confidence that even as a $50 billion plus global retailer significant opportunities remain to capture additional market share around the world going forward.

Ernie: Through our JV with GroupOAXO and our investment in Brands4Less, we'll now be participating in the growth of off-price in Mexico, the UAE, Saudi Arabia, and beyond.

Ernie Herrman: Summing up I am very pleased with our third quarter performance and we feel great about our initiatives for the holiday selling season.

Ernie: We are always looking for ways to increase shareholder value, and we see these two investments as a good use of cash with an attractive growth and return profile over the long term.

Ernie Herrman: I want to reiterate that we are always looking at ways to increase both our topline and our profitability.

Ernie Herrman: Longer term, we are confident that our value leadership treasure Hunt shopping experience and flexibility will continue to be key advantages and allow us to increase our market share.

Ernie: All of this gives me confidence that even as a $50 billion plus global retailer, significant opportunities remain to capture additional market share around the world going forward.

Ernie Herrman: Further I am convinced that our global talent is unmatched and that our focus on culture teaching and training will continue to be major contributors to our success for many years to come.

Ernie: Summing up, I am very pleased with our third quarter performance and we feel great about our initiatives for the holiday selling season.

Ernie: I want to reiterate that we are always looking at ways to increase both our top line and our profitability.

Ernie Herrman: Finally.

Ernie Herrman: We have many initiatives underway and our corporate responsibility programs and I encourage anyone to learn more about our efforts on our corporate website <unk> dot com and the responsibility section.

Ernie: Longer term we are confident that our value leadership, treasure hunt shopping experience and flexibility will continue to be key advantages and allow us to increase our market share.

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

Ernie: Further, I am convinced that our global talent is unmatched and that our focus on culture, teaching and training will continue to be major contributors to our success for many years to come.

Speaker Change: Thanks, again, Ernie as a reminder, adjusted numbers for last year's fourth quarter and full year exclude the benefit from the extra week in our fiscal calendar last year.

Ernie: Finally, we have many initiatives underway in our corporate responsibility programs, and I encourage anyone to learn more about our efforts on our corporate website, tjax.com, in the Responsibility section.

John: Now I'll start with the fourth quarter guidance, where we are expecting overall comp store sales growth to be up 2% to 3% consolidated sales to be in the range of 15, 9% to $16 1 billion pre.

Speaker Change: Now, I'll turn the call back to John to cover our fourth quarter and full year guidance, and then we'll open it up for questions.

John: Pre tax profit margin to be in the range of $10 eight to 10, 9% down 10 basis points to flat versus last year's adjusted 10, 9%.

John: Thanks again, Ernie. As a reminder, adjusted numbers for last year's fourth quarter and full year exclude the benefit from the extra week in our fiscal calendar last year.

Gross margin to be in the range of 29, 4% to 29, 5%. This would be down 10 basis points to flat versus last year's adjusted 29, 5%.

John: Now I'll start with the fourth quarter guidance, where we are expecting overall comp store sales growth to be up 2 to 3 percent, consolidated sales to be in the range of $15.9 to $16.1 billion,

John: As a reminder, this years fourth quarter gross margin assumes a negative impact from our year over year shrink accrual.

John: Pre-tax profit margin to be in the range of 10.8 to 10.9 percent. Down 10 basis points to flat versus last year's adjusted 10.9 percent.

John: SG&A to be 18, 8%, which would be 10 basis points favorable to last year's 18, 9% net interest income of $35 million, which we expect to delever pre tax profit margin by 10 basis points.

John: Gross margin to be in the range of 29.4 to 29.5 percent. This would be down 10 basis points to flat versus last year's adjusted 29.5 percent.

John: Our fourth our fourth quarter guidance also assumes a tax rate of 26.0% and a weighted average share count of approximately $1 4 billion shares.

John: As a reminder, this year's fourth quarter gross margin assumes a negative impact from our year-over-year shrink accrual.

John: Lastly, we're expecting fourth quarter diluted earnings per share to be in the range of $1 12 to 14 versus last year's $1 12 adjusts.

John: SG&A to be 18.8%, which would be 10 basis points favorable to last year's 18.9%. Net interest income of $35 million, which we expect to deliver pre-tax profit margin by 10 basis points.

John: Adjusted $1 12.

John: Moving to the full year, we continue to expect overall comp store sales to increase 3%. We expect consolidated sales to be in the range of 55 nine to $56 1 billion were.

John: Our fourth quarter guidance also assumes a tax rate of 26.0% and a weighted average share count of approximately 1.14 billion shares.

John: We're increasing our pre tax profit margin guidance by 10 basis points.

John: Lastly, we're expecting fourth quarter diluted earnings per share to be in the range of $1.12 to $1.14 versus last year's $1.12, adjusted to $1.12.

John: To 11, 3% this would be up 40 basis points versus last year's adjusted 10, 9%.

John: We now expect gross margin to be 33%, a 40 basis point increase versus last year's adjusted 29, 9%. We expect this increase to be driven by a higher merchandise margin, partially offset by higher supply chain costs.

John: Moving to the full year, we continue to expect overall comp store sales to increase 3%. We expect consolidated sales to be in the range of $55.9 to $56.1 billion.

John: We continue to plan to shrink to be flat versus last year.

We continue to expect SG&A to be 19, 3% flat versus last year is 19, 3%.

John: to 11.3%. This would be up 40 basis points versus last year's adjusted 10.9%.

John: We now expect gross margin to be 30.3%, a 40 basis point increase versus last year's adjusted 29.9%. We expect this increase to be driven by a higher merchandise margin, partially offset by higher supply chain costs.

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 now assuming net interest income of $174 million, which would have a neutral impact on our year over year pre tax profit margin.

John: We continue to plan shrink to be flat versus last year.

John: Our full year guidance assumes a tax rate of 25 zero percent and a weighted average share count of approximately 114 billion shares.

John: We continue to expect SG&A to be 19.3%, flat versus last year's 19.3%. 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 now expect fully diluted earnings per share to be in the range of $4 15 to $4 17.

John: This would represent an increase of 10% to 11% versus last year's adjusted diluted earnings per share of $3 76.

John: We're now assuming net interest income of $174 million, which would have a neutral impact on our year-over-year pre-tax profit margin.

John: It is important to note that we are not flowing through the entire third quarter earnings per share beat of <unk> <unk> to the full year as we expect to sense of timing expenses benefit in the third quarter to reverse out in the fourth quarter.

John: Our full year guidance assumes a tax rate of 25.0% and a weighted average share count of approximately 1.14 billion shares.

John: We now expect fully diluted earnings per share to be in the range of $4.15 to $4.17.

John: In closing I want to iterate that we are very pleased with the execution of our teams across the company in the third quarter. We are confident in our plans for the fourth quarter and always will strive to beat them.

John: We have a very strong balance sheet and are in an excellent position to continue investing in the growth of <unk>, while simultaneously returning significant cash to our shareholders.

Speaker Change: Now we're happy to take your questions. As a reminder, please limit your questions to one per person. So we can answer as many questions as we can.

Speaker Change: Thanks, and now we'll open it up for questions.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on mute your phones and record your name clearly if you need to withdraw your question Chris again, two quick questions. Please.

Speaker Change: Please press star one.

Speaker Change: Our first question will come from Matthew Boss with Jpmorgan. Your line is now open.

Speaker Change: Great Thanks, and congrats on another nice quarter.

Speaker Change: Thank you.

Speaker Change: So Ernie could you speak to the cadence of comps at more Max or maybe outside of hurricane and weather disruption any change in business or market share momentum into holiday in 2025, and then John if you could just outline or elaborate on the drivers of the third quarter merchandise margin expansion.

Speaker Change: Maybe just walk through continued drivers of merchandise margin looking forward.

Speaker Change: Yeah sure good questions, Matt Yeah. So.

Speaker Change: We were actually starting off strong stronger than where we ended up in <unk>.

Speaker Change: <unk> at the beginning of the quarter.

Speaker Change: In addition to the Hurricanes that hit US later, it was really some unseasonably warm weather and <unk> pulling us down in fact.

Speaker Change: We pretty much have rounded down to the two we were heading in a good place and I'll tell you. This I'm extremely happy with where <unk> is starting off Q4.

Speaker Change: Starting off strong as we enter November here, and I know youre not asking about Europe, but this is where the weather.

Speaker Change: <unk>, probably seen all the different parts of the unseasonably warm weather has affected other retailers and shopping patterns.

Speaker Change: Beyond just the.

Speaker Change: The Hurricanes, our Europe business had a benefit.

From weather so the seven comp that we have there David that team over there did a great job on executing I think would tell you, though that they were helped by.

Speaker Change: Some favorable cooler weather actually in Europe.

So.

I'll have two cities.

Speaker Change: Again the cadence.

It was kind of like that the way <unk> excellent. So we're feeling ultimately feeling very good about the <unk> business and where we're headed for Q4 and then as far as your question about the gross margin.

Speaker Change: Most of it was in the merchandise margin line. We also had some expense savings in the DC.

Speaker Change: Your line.

Speaker Change: And Thats really from.

Speaker Change: We said that.

Speaker Change: The inventories I mean, they were on an average per store basis were down in the Dcs and up in our stores we're very.

Comfortable with where the inventories landed so the.

Speaker Change: The Dcs, we are processing closer to need.

Speaker Change: And that gives us savings in our Dcs on the processing side.

Speaker Change: Great Best of luck.

Speaker Change: Thank you.

Speaker Change: Next we will hear from brick Roche with Goldman Sachs. You May proceed.

brick Roche: Good morning, and thank you for taking our question.

brick Roche: With tariffs and supply chain.

Speaker Change: Of mind I was hoping you could elaborate on how youre thinking about your current exposure to direct imports from certain countries, such as China, and what impact a potential tariff scenario could have on your business. Both in terms of inventory availability, but also cost.

Speaker Change: Merchandise sourcing thank you.

Speaker Change: Sure Brook.

Speaker Change: Obviously, something we're aware of.

Speaker Change: Potential situations out there and all along we watch these things. We've also as you remember we've dealt with this before.

Speaker Change: A number of years ago.

Speaker Change: We are I would tell you. This is one of the places where our model is such a benefit because our our priority is maintaining our.

Speaker Change: Our value gap right on our goods relative to the out the door retails at competition. So.

Speaker Change: While we won't speculate on exactly what will happen with certain items or certain categories. If it does happen. We are set up to ensure that we maintain our value gap between us and the out the door at no matter what those categories are that could get hit with tariffs.

Speaker Change: Everything's relative we will make sure our values are proportionately below them as they always have been.

Speaker Change: Again, we have the flexibility that we're not buying so far so.

Speaker Change: So far early and out.

Speaker Change: The other opportunity ironically that tends to surface in times like this as we could have other manufacturers or retailers that do more of their own direct imports and I know you mentioned are direct imports.

Speaker Change: Very small portion of our business and so that is and we've already a number of years ago started diversifying.

Speaker Change:

Speaker Change: Out of China.

Speaker Change: As an aside by the way on this topic as you know the bulk of.

Speaker Change: Our inventory is bought from brands. So we can't we don't even have visibility into where those goods are from nor do we actually want to get involved in that it's back to the it's back to the value gap that we retailed those goods out relative to competition. So.

Speaker Change: If a brand where to get hit with tariffs increase tap on a category and that brand had to raise their price and then that price.

Speaker Change: Gets carried onto another retailer could that price on that one SKU for us be up a little it might but it will never be.

Speaker Change: Ed any issue with a value gap that we have relative to the competition.

Speaker Change: On the direct back to the back to the imports.

Speaker Change: That's such a small number for us that we're really not concerned on that piece same idea.

Speaker Change: I would say what was the last part of your question there.

Speaker Change: Just whether or not there was any benefits or opportunities that tariffs could present to your buying model, yes, im sorry, so with the lenders could bring in good manufacturers could bring in goods early and what that and this is what happened last time that could create actually even.

Speaker Change: <unk> availability of goods at advantageous prices for us because we can take advantage of that opportunistically.

Speaker Change: That is likely a scenario as anything.

Speaker Change: So once again. This is this is where the novel <unk>.

the vendors could bring in good manufacturers could bring in Goods early and what that and this is what happened last time that could create um actually even additional availability of goods that added

Speaker Change: Model win when there is chaos out there in the market a little of that happens a little bit on certain categories. Ultimately, usually that's an opportunity for us.

Speaker Change: And then Brook just to add on.

Prices for us.

We can take advantage of that opportunistically.

Speaker Change: <unk>.

Speaker Change: The supply chain.

And that's that's as likely a scenario as anything.

Speaker Change: <unk>.

Speaker Change: We are anticipating a little bit of freight headwind in the fourth quarter, which we have reflected in our forecast.

uh, so

You usually that's an opportunity for us.

Once again, this is this is where the novel, uh, the, the model. When when there's chaos out there in the market a little, if that happens a little bit on certain categories, ultimately,

And then Brooke just to add on you. You, you would question the, you know, the, the uh, supply chain. Uh, so uh, we are

Speaker Change: Great. Thanks, so much I'll pass it on.

Anticipating a little bit of Freight headwind in the fourth quarter, which we have reflected in our forecast.

Speaker Change: Our next question will come from Lorraine Hutchinson with Bank of America. Your line is open.

Speaker Change: Good morning, Thank you.

Great. Thanks so much. I'll pass it on.

Speaker Change: Earning the comp continues to be driven by transaction can you talk to the composition of the new customers that youre, gaining by age and income level and any changes you've seen in recent quarters or signs of trade down in that customer cohort.

Our next question will come from Lorraine Hutchinson with Bank of America? Your line is open.

Good morning. Thank you. Um, Ernie. The comp continues to be driven by transactions. Can you talk to the composition of the new customers that you're gaining by age and income level?

Speaker Change: Right no great question Lorraine.

Speaker Change: Its interesting John the team and.

And any changes you've seen in recent quarters or signs of trade down in that customer cohort.

Speaker Change: Our marketing team, we look at those all the time.

Speaker Change: We have over the last few years started to more of our customers are skewing a little bit younger as consistent.

Right. No, great question Lorraine. We it's it's

John.

The team and uh, you know, our marketing team. We look at this all of the time uh uh we have over the last few years started to more of our customers are skewing a little bit younger as consistent. Um, as consistently, we've talked about age 18 to 34 has been a a growing segment for us.

Speaker Change: As consistently.

Speaker Change: We talk about age 18 to 34 has been a growing segment for us.

Speaker Change: This is good based on where we have kind of skewed our business, but I would like to emphasize interestingly Lorraine one thing I always talk about is how we trade broadly that's in terms of income and the age alright and.

uh,

This is good based on where we have kind of skewed our business but I would like to emphasize interestingly Lorraine uh, 1 thing, I always.

Speaker Change: We recently have looked at our.

Speaker Change: Our breakdown by the age groups and the income groups and.

Talk about is how we create broadly. That's in terms of income and age, all right? And we recently have looked at our uh, our breakdowns

the age groups and the income groups and

Speaker Change: Again, it's a competitive advantage for us we love the way we are balanced by age gender income across every one of our banners.

Banners.

Again, it's a competitive Advantage for us. We love the way, we are balanced by age and income across every 1 of our

And we've recently looked at the new data on it and yes. On the on some of the, the younger that's moved that way a little bit its

Extremely in proportion.

To the different age groups balanced across against the general population.

Speaker Change: And we've recently looked at the new data on it.

We love that because it allows us to

Continue to keep growing our uh, customer base on all incomes and demographics as well as you you, you know, this, we're all about good better best and our product.

Speaker Change: And yes on the on some of the younger that's moved that way a little bit it's still extremely in proportion to the different age groups balanced across against the general population, we'd love that because it allows us to continue to keep growing our customer.

And so we continue to emphasize that with our Merchants. With the way, we do our store formats, we want to appeal to all different incomes and age groups.

and so, uh,

I think I answered your first question about where the growth has been on the customer but what I would tell you is,

Speaker Change: Customer base on all incomes and demographic as well as you know this we're all about good better best and our product and so we continue to emphasize that with our merchants with the way we do our store formats, we want to appeal to all different incomes and age groups.

Our objective is to continue, yes, to get younger customers on the, on the same time, unlike, uh, other retailers that kind of narrow in on their customer base. From a, from a demographics perspective, we are not doing that. We want to continue to

Speaker Change: So.

Speaker Change: I think I answered your first thought about where the growth has been on the customer, but what I would tell you is.

Very broadly. So if we get more younger, I, I still don't want us to give up the, the older age customers or the in between. And so, uh, John anything else you want to?

Speaker Change: Our objective is to continue yes to get younger customers on the same time.

Speaker Change: Unlike other retailers are kind of narrow in on their customer base.

For that Aur.

You know.

Positive, uh, performance across all the income demographics. Uh uh, categories that we we we track

whith with our good better best strategy uh you know we trade across all income demographics and you know last quarter we saw

From a demographic perspective, we are not doing that and we want to continue to trade broadly. So if we get more younger I still don't want us to give up the older age customers or the in between.

And and, and you know what?

I think neat and again for the future as we we continue to expand

So John anything else, you want to add to that or.

Is there is a convenience benefit, not only do we create more of a treasure hunt.

With our good better best strategy, we trade across all income demographics and.

We've spoken about this many times um I think it's for the future. It continues to allow us to differentiate ourselves from the other retailers.

By going after this wide range of C wider than uh, our competition. And I don't mean just off price competition. I mean, all competition that tends to trade in uh, now where you and I

Speaker Change: Last quarter, we saw positive performance across all the income demographics.

Um, when we enter our Market, it creates convenience, not usually creating, uh, treasure hunt entertainment, type of shopping experience. It creates convenience, because

Speaker Change: Categories that we track.

Speaker Change: And you know what I need.

Neat and again for the future as we continue to expand.

If somebody's shopping in our store especially for gifts, even you're having different levels of gifts. Not just that 1, you know, not a 1 age group, 1 income group, it allows somebody to

Have a convenient shopping experience, as well as an unexpected. What are you going to find shopping experience?

Speaker Change: There is a convenience benefit not only do we could see more of a treasure hunt by going after this wide range of.

Thank you.

Wider than our competition and I don't mean, just off price competition I mean, all competition tends to trade now.

Next, we will hear from Paul ledgeway with City. Please go ahead.

Sure, if you can.

Hey guys. Uh, 2 2, quick ones and

Speaker Change: Now are you and I have spoken about this many times.

There have been some some things that have changed on the on the macro since just curious. If you're seeing anything on on the consumer and then second, if you can just talk at a high level about how you're

Talk about whether your view of the consumer has changed versus the last time. We heard from you 3 months ago just you know, giving

Speaker Change: For the future it continues to allow us to differentiate ourselves from the other retailers and two when we enter a market. It creates convenience ease of creating treasure Hunt entertainment type of shopping experience it creates convenience because when somebody shopping in our store, especially for gifts.

Thinking on margin expansion opportunities or challenges in 2025. If, uh, if you can give us an Early Peek into higher,

Okay. Yeah, I'll start and then I'll let Annie chime in on the merchandise margin. Uh question uh you know as far as the consumer goes.

Um, you know, there's really no change in how we're viewing the consumer either by income demographic or by age. Um, we again, as Ernie just mentioned, we're trying,

Speaker Change: Even you are having different levels of guests not just that one.

The business. Um, but again, you know, the, you know, the the merchandising strategies that Ernie has talked about over and over again. We feel that that

acting more customers, uh, that are in that 18 to 34 age range, um, which we think is a is a definite plus when you think of the long-term health

Speaker Change: Not at one age group one income group that allows somebody to have a convenient shopping experience as well as an unexpected what are you going to find shopping experience.

Speaker Change: Okay.

Of the population. And it is to shop us.

You know, again differentiates us from a lot of, uh, competitors. And you know really gives, you know, um, a broad, uh, you know, cross-section,

Thank you.

Speaker Change: Thank you.

You know um Paul Arthur and 2 other things. I think this might also be helpful based on your question is

Speaker Change: Next we will hear from Paul Lajoie with Citi. Please go ahead.

But as you can see, the health of our home business, uh, makes me continue to be very Bush and where we're headed in home. And I, I don't know if that's a

Paul Lajoie: Hey, guys two quick ones and curious if you can.

You know what's changed since last quarter per se and The View on a macro scale. I, I don't know if this is a 1 quarter thing or over the last few quarters.

Paul Lajoie: Talk about whether your view of the consumer has changed versus the last time, we heard from you.

Obviously you can see from the build. In fact, I am thrilled with what HomeGoods did. Uh, this past quarter against a very big comp last year. Uh,

Pro, uh, Trend. I I know it probably is inconsistent when you look at the results in the home industry, um, but I think on our end, we're seeing for our customers.

Paul Lajoie: Just given there have been some things that have changed in the macro sense. Just curious if youre seeing anything on the consumer and then secondly, if you can just talk at a high level about how youre thinking on margin.

I would say for our customers, and by the way, we believe there, we gain additional customers. Uh, there's a bit of a

Paul Lajoie: <unk> expansion opportunities or challenges in 2025.

uh,

open to, uh,

Paul Lajoie: Can you give us an early peek into how youre thinking.

To look for a uh fun. Uh I would say eclectic uh Fashion Home merchandise in an Ever Changing home. Assortment that that seems to be picking up over the last few quarters I would say not necessarily Q2 to Q3 but I would say our Q3 versus uh 3/4

Speaker Change: Okay, I'll start and then I'll, let Andy Chairman on the merchandize margin question as far as the consumer goes.

Speaker Change: Theres really no change in how we're viewing the consumer either by income demographic or by age.

Now and that team. I'm very proud of our uh home teams across the corporation. Uh, I'm talking to stores the way they put out the goods but also, our Merchants have been

And you can see we we talked about that a bit on the last call, um, but I'm I'm feeling even more bullish quarter by quarter and you, you know, you know, we've been and I've been talking about it for a year.

Speaker Change: Again as Ernie just mentioned, we are attracting more customers that are in that 18 to 34 age range.

so collaborative and the way they've executed from HomeGoods to marmaxx to to Europe, Canada, uh, all the merchants in our home, businesses have really been doing,

Speaker Change: Which we think is a definite plus when you think of the long term health of the business, but again the.

Speaker Change: The merchandising strategies that Ernie has talked about over and over again, we feel that that again differentiates us from a lot of competitors and really gives.

Nice job, taking advantage of what I think is a bit of a shift.

And then on the margin for for next year, any thoughts?

Speaker Change: Abroad.

Um, we're we're not.

Giving guidance today on on the, we're not prepared to give uh, guidance. Uh, for next year, I mean, we've been very consistent in in in saying that, you know,

3 to 4 comp again assuming no outside expense increases and some merchandise margin approval. We can be flat to up 10 basis points. Um, but the biggest lever, we

Speaker Change: Cross section of the population and interest to shop us.

Speaker Change: Yes.

Paul I'll throw in two other things I think this might also be helpful. Based on your question is.

Whith those customers. So you know, we think that driving that Top Line is something that we will continue to do.

We have is our Topline growth. Um, and when customers are searching for Value, we believe our execution in the value, we offer will continue to resonate

Speaker Change: What's changed since last quarter per se and the view on a macro scale.

um,

Guidance, uh, on the fourth quarter, call for FY 26.

so again, we'll give we'll give

Speaker Change: This is a one quarter thing or over the last few quarters, but as you can see the health of our home business.

Thanks. Good luck, guys.

Thank you.

Speaker Change: Makes me continue to be very bullish on where we're headed and in home and I don't know if thats a macro.

Our next question will come from Michael binetti with evercore. Your line is open.

Speaker Change: Trend I know it probably is inconsistent when you look at the results in the home industry.

Hey guys. Great quarter. Thanks for taking our question, maybe just a double click on. Paul's question a little bit. Um, if we think about the typical algorithm, you guys speak to, I think last year was 2 to 3 comps, whith 10, you know, flat to 10 basis points to pre-tax on that. Um,

I I know you don't want to get into guidance, any any items or puts and takes we should start thinking about qualitatively to consider with respect to what would be a normal year tariffs, labor or just the mix of business? I know John

But I think on our end, we're seeing for our customer obviously you can see from the build in fact, I am thrilled with what Homegoods did this past quarter against a very big comp last year.

Mentioned. Maybe there was a few thoughts that the international margins Improvement. Even seen lately, um, could be more durable. I'm curious what you, what you thought there and then um,

Speaker Change: I would say for our customers and by the way we believe there we gain additional customers.

Ernie. Glad to hear your confidence on on marmaxx here in November if you wouldn't mind. Just double click just double clicking on it for a minute. What do you? What do you think is work? Is that whether just getting out of the way and it always

Speaker Change: There is a bit of a.

Speaker Change: And open to <unk>.

Speaker Change: Look three.

Speaker Change: I would say a collective.

Could have been better. Are you seeing the weather sensitive categories improve or are these early reads from the holiday categories?

Fashion <unk> home merchandise in an ever changing home assortment that that need to be picking up over the last few quarters I would say not necessarily Q2 to Q3, but I would say our Q3 versus three quarters ago and you can see we talked about that a bit on the last call.

Michael. But yes I think more of that again, we

Yeah, although we'll start I know that's your last part there. Um um

a bit and that's, that's helping as well as

Marmaxx would have tracked better if the weather wasn't unseasonably warm. And so now I think we're getting that whether picture out of the

I talked about in The Script.

we have so many of

gift giving categories that are now hitting the

For.

Us. And

if you look at, I think now is a place. If you look typically at our Q4 where we gained market, share pretty steadily.

Speaker Change: But I'm feeling even more bullish quarter by quarter.

Speaker Change: We've been I've been talking about it for a year now and that team I'm very proud of our home teams across the corporation.

Over a number of years. And I think there's a combination of the weather getting out of the way, as well as marimax is is looking particularly strong from a mixed perspective with gift. Giving

And uh fresh goods that have been hitting. So I think it's both uh but thanks for that. Thanks for we don't mind double clicking on that 1. Yeah and then

Speaker Change: Talking to the stores the way they put out the goods, but also our merchants have been so collaborative and the way they've executed from Homegoods Tomorrow, Max two to Europe, Canada, all the merchants on our home businesses that have really been doing a nice job taking advantage of what I think is a bit of a shift.

In this year. So that's why this year on a 2 to 3 comp. Uh, you know, we've been able to be excuse me, on a 3 to 4 comp we've been able to be higher. Uh,

And then just to get back to you. The first part of your question. Um, you know last year we did have a number of 1-time items that that gave us a little bit of a, a tail.

Aur or flow more. Um, it really isn't a lot this year. That's that's impacted us. Uh, we don't see Spain next year as as being, uh,

A large headwind. Um you know we're trying to be as cost-effective as we can going into that market uh leveraging as much as we can, that European business. So

Speaker Change: And then on the margin for next year any thoughts.

Um, you know, again, you know, I I'd just go back to my upfront, comment of what where we see it until, you know, we have more detail for you on the fourth quarter.

Speaker Change: We're not giving guidance today on the we're not prepared to give guidance.

Speaker Change: For next year I mean, we've been very consistent in saying that on a three to four comp again, assuming no outsized expense increases and some merchandise margin approval, we can be flat to up 10 basis points.

Good luck, guys.

Thank you.

Perfect. Thanks a lot for taking the question. Um I wanted to focus in on HomeGoods. Again those initial comments were were super helpful. Can we just talk about the

Next, we will hear from Alex straighten whith Morgan Stanley. You may proceed

Speaker Change: But the biggest lever we have is our topline growth.

Profitability Improvement there, and how you guys have been able to drive that to, to such a nice level after a number of years, um, of pressure. And and then just on the international

um,

kind of announcements and a number of entries changes. This year has something changed in terms of strategy. Um, or how are you guys thinking about that? Thanks a lot.

Speaker Change: And when customers are searching for value, we believe our execution.

Speaker Change: We offer will continue to resonate with those customers. So we think thats driving that top line is something that we will continue to do.

all right, Alex, let me start with and then um,

I I would figure, this would be a question, the international expansion is where we're at a bit of a junk, a junction here of where we have talent and

John John it was probably jumping on the HomeGoods margin, but if I can get to you on what you're asking, what?

So again, we'll give we'll give guidance on the fourth quarter call for FY 'twenty six.

You've heard me talk about this before. We've always had this great business model but have wanted to be very careful and strategic about when we roll it out to

Speaker Change: Thanks, Good luck guys.

Thank you.

Speaker Change: Our next question will come from Michael Binetti with Evercore. Your line is open.

Not dilute our core businesses.

Michael Binetti: Guys great quarter. Thanks for taking my question, maybe just double click on Paul's question, a little bit.

Doing a good job, Aur.

And so what happened is the time. So the timing of our model along with entries into markets, where nobody is,

Even doing a job on off price.

As we think about the typical algorithm you guys speak to I think last years, two to three comps with flat.

Which I have to emphasize again, our management teams experience at all. Different levels from managers all the way up to you know top Executives we have tenure

Has been surfacing at a time when we because of all of the tenure that we have in TJX.

Michael Binetti: Flat to 10 basis points of pre tax on that.

And experience the corporation really like never before. So, that's allowed me to really work with the teams and identify opportunities and then have

Speaker Change: And I know you don't want get into guidance for any any items or puts and takes we should start thinking about quantitatively consider with respect to what would be a normal year tariffs labor just the mix of business I know John you mentioned, maybe there was a few thoughts that the international margins improvement you've been seeing lately.

A handful of people, uh, that were either coming out of their jobs. They could have been, uh, nearing retirement or wanted to do something a little different,

And we've been able to utilize them to actually uh help us make these uh I guess joint venture Ventures or Investments or new.

Speaker Change: Would be more durable I'm curious what your thought there and then.

Glad to hear your confidence on <unk> here in November.

Is like, like, in Spain. So, uh what what really Alex has happened is we have a, we have more Talent where I don't have to risk the core businesses to allow us to entertain and then actually get involved with these opportunities then we've ever had before. And so that's why you're seeing us, do 3 different things internationally uh

Speaker Change: And just double click just double clicking on it for a minute. What do you think is working is that weather just getting out of the way and it always should have been better or are you seeing in weather sensitive categories improve or are these early reads from the holiday categories.

Speaker Change: Although it will start I know that's your last part there Mike.

Michael Binetti: Michael but yes, I think more of that again.

Without taking away any Focus or execution risk in our core businesses does. Does that make sense?

Michael Binetti: I think <unk> would have tracked better if the weather was unseasonably warm and so now I think we're getting that weather picture out of the way here a bit and thats that is helping as well as.

So so that's that's a conscious uh really a conscious

Point of where we're at today. And I go back to, uh, not just the benefit. Obviously, for these new, uh, business ideas. There's the benefit for our Core Business is that this Corporation has so much talent across the board. I think that's a differentiator for us from from other retailers, is is the longevity that we have

I think I talked about in the script, we have so many of our gift giving categories that are now hitting the stores.

Michael Binetti: And if you look I think now is a place if you look typically at our Q4, where we gained market share pretty steadily.

and then,

Over a number of years and I think there's a combination of the weather getting out of the way as well as <unk> is looking particularly strong from a mixed perspective with gift giving.

Getting back to getting, to your the beginning of your question, which is on HomeGoods. Giving you a little more color on the, uh, the 200 basis point Improvement. Um, so the, the biggest thing I said is,

My My Talking Points was the the closure of homegoods.com last year that we weren't up against uh that we didn't have this year. Um but other pieces um, you know, we have

Some expense efficiencies that we saw in the division along with some Freight favorability. Um and this was again uh you know partially offset by

Michael Binetti: <unk>.

Michael Binetti: Fresh goods that have been hitting so I think it's both.

Michael Binetti: But thanks for that thanks.

Speaker Change: We don't mind double clicking on that one.

Speaker Change: And then and then just to get back to the first part of your question.

Uh, you know, supply chain wage and some inventory cap expense. Uh, in the inventory cap is, uh, 1 of the pieces that uh, we're seeing

Speaker Change: Last year, we did have a number of onetime items that gave us a little bit of a tailwind. This year. So that's why this year on a two to three comp.

As, um, you know, uh, you know, reversing next quarter.

Speaker Change: We've been able to be excuse me on a three to four comp we've been able to be higher.

jumping with their also, Alex is you're asking about, you know, that that home margin and as I talked before we're we're bullish on home and total, um, but our home Market

um, 1 other 1, other thing I would

Speaker Change: Flow more.

Are healthy across the board. So we're always feeling good.

Speaker Change: It really isn't a lot this year, that's impacted us we don't see Spain next year as is being.

Quarter was a nice margin of HomeGoods. We're feeling good about our

uh, you know, and especially direction as you can see, where, where you and John just spoke about how the last,

Which is also in an industry where often times margins are challenging and home. Some of that has to do with those categories that

Home business margins in general. So just so you know, it's a that's another part.

Speaker Change: A large headwind.

Speaker Change: We're trying to be as cost effective as we can going into that market leveraging as much as we can the European business. So.

Their business and obviously we're more fashion driven and eclectic.

That other retailers. Um, do more

But um, thanks for the question.

Speaker Change: Again.

I'd just go back to my upfront comments of where we see it until we have more detail for you on the fourth quarter.

Our next question will come from Ikea boracho with Wells Fargo. Please go ahead.

Hey, uh, good morning everyone. Um,

Speaker Change: Thanks, a lot guys.

Just wanted to kind of dig in a little bit more on the overseas comp um you know, 1 of the best performances, you guys have put up in a few years, I think. Just maybe just could you talk

To the macro in both of those key regions, Australia and Europe, kind of curious. If anything is changing for the better at a higher level, when you look at it and then just a follow-up to that is

Speaker Change: Thank you.

Speaker Change: Next we'll hear from Alex Straightened with Morgan Stanley You May proceed.

Alex Straightened: Perfect. Thanks, a lot for taking the question I wanted to.

Should we expect a kind of similar Dynamic with marmaxx? Where you kind of talked about? The weather was unfavorable it shifted. Marmaxx improved, is it kind of the same thing with Europe? Whether it was very favorable.

And things of normalized, like, kind of, in terms of the comps or the comp be kind of normalizing, as well, after a, really robust 3Q. Thanks.

Alex Straightened: And then on Homegoods again, those initial comments were Super helpful. Can you just talk about the profitability improvement there and how you guys have been able to drive that that's such a nice level after a number of years.

Awesome. Go ahead. I mean, yeah. I mean are your International comp. I mean, we, we had, uh, you know, a strong compost in Europe and in Australia.

And then just on the international.

Alex Straightened: Kind of announcements in a number of entries are changes this year has something changed in terms of strategy.

um,

and uh, it's it's

You know, whether that Ernie had had called out, um, so nothing more to add on that. Um,

The international comp is is, you know, it's a portion that, you know, excellent execution. But also

Speaker Change: Or how are you guys thinking about that thanks a lot.

Speaker Change: Alright, Alex let me start with and then.

As far as the marmaxx comp.

Um again we continue to execute well there. Uh and we're confident in our plans for the fourth quarter.

Speaker Change: John will probably jump in on the Homegoods margin, but if I can get to you on what Youre, asking which I would figure. This will be a question. The international expansion is where we are at a bit of a jump.

I guess what the question is, is it have you? Have you seen a normal?

Ization in the comp Trend as the seasonal benefit. I I assume it's kind of waned a bit, just like, with marmaxx, the seasonal headwind has waned, um, this trajectory wise for that business.

Speaker Change: Junction.

Speaker Change: We have talent and you've heard me talk about this before we've always had this great business model, but have wanted to be very careful and strategic about when we roll it out to not dilute our core businesses and so what's happened is the timing so the timing of our model.

Right? So I think what you're getting. Yeah. So are you getting a i yeah we we would not plan to assume we're going to run at 7 comps.

All the time because again, part of that was a benefit from the weather change and that goes away just by the way. Yes, exactly. Right. Just as in, marmaxx, that kind of went

Could go the other way.

Yeah.

You also asked, I think about the macro environment. I think the macro environment has not really changed much in Europe, that's still about the same. This was more about our own execution.

And the weather. Uh, and then in obviously here in the state same same

Speaker Change: Along with entries into markets, where nobody is doing a good job or even doing a job on off price has been surfacing at a time when we because of all of the tenure that we have and T. J X, which I have to emphasize again, our management team's experience at all different levels from managers all the way up.

Same thing. Um,

so,

That's helpful. Thank you, Ernie. Appreciate it.

You're welcome.

Next, we will hear from Bob derbal with Guggenheim.

Makeup ahead. Hi. Um, good morning on following up on the home business. Can you spend some time? Just on HomeSense sort of how you're doing in?

The various regions, you know, us Canada Europe. Thanks.

Speaker Change: Two top executives, we have tenure and experience across the corporation clearly like never before so that's allowed me to really work with the teams and identify opportunities and then half.

Sure.

you've been uh uh, very happy with um, and in fact

Is across the board has has really been, uh, healthy. Uh, we're liking what we're seeing for the most part some exceptions. Um,

As I was, uh, really trying to hint at earlier, is our home business.

Speaker Change: A handful of people.

Speaker Change: That were either coming out of their jobs they could've been.

Throughout every uh geographic area that we're in. Yeah we were positive across all the geographic areas that we have uh in these home businesses. Um and

Again, that includes the apparel stores where we have home as well. That's right. The full family stores. Right? And, and it, by the way, and then, uh, Europe that

Speaker Change: Nearing retirement or wanted to do something a little different and we've been able to utilize them to actually.

in our HomeSense in the US business, uh, as as as we've been playing with some execution issues there, uh, not not trouble per se, but

Help us make these I guess joint venture ventures or investments or new businesses like like in Spain. So.

Part of our strong performance, right? John last quarter. So humps HomeSense there as well. Uh, we're also, um, we've had a pickup we

Speaker Change: What really Alex has happened is we have we have more talent, where I don't have the risk of the core businesses to allow us to entertain and then actually get involved with these opportunities than we've ever had before and so that's why you're seeing us do three different things internationally.

that we think do more business than, um,

Credit on that home sense, uh, business, but, uh, no, feeling really good across the Australia. We do, uh, home in our within our

Going forward by tweaking the mix. So we don't say what that is but we've done some good things in the teams. I give them more.

There is no separate home business versus in the other geographies. Having said that,

Speaker Change: Without taking away any focus or execution risk in our core businesses does that make sense.

that has, uh,

Also been healthy. Yeah.

Speaker Change: So that's that's a conscious.

again, uh,

Speaker Change: Really a conscious point of where we're at today and I go back to not just the benefit obviously for these new.

all the indicators are and I go back to we do our home business differently, our Merchants are collaborate,

And our creative and I think all of you have seen this what we give to the consumer in our home areas, very different than what any other retailer does. Even though in some

Speaker Change: Business ideas as the benefit for our core business is that this corporation has so much talent across the board I think that's a differentiator for us from from other retailers is the longevity that we have.

Categories were overlapping. Uh, the approach is so much more eclectic, and by the way, good better best throughout the entire home area. Just as in the rest of our store.

uh,

so we couldn't couldn't be uh, couldn't be happier with where we're headed there.

Speaker Change: And then getting back to get into your or the beginning of your question, which was on Homegoods, giving you a little more color on the.

Great. And just within the marmaxx,

Speaker Change: The 200 basis point improvement.

Business. Um, the runway piece of the business are you seeing sort of better availability in, you know, some of the luxury goods areas, you know, for some of your stores

So the biggest thing I said in my talking points was the closure of Homegoods Dot com last year that we werent up against.

But we usually don't comment on anything like that specific but I mean availability has, has has been okay there. That's such a limited

Speaker Change: We didn't have this year, but other pieces, we had some expense efficiencies that we saw in the division along with some freight favorability.

We don't really use that as a bell weather for availability for us because it's only a Limited store base. And that kind of moves because of because of uh the smaller resource structure there.

Speaker Change: And this was again, partially offset by.

Speaker Change: Supply chain wage and some inventory cap expense.

Speaker Change: And the inventory cap is.

A bit more up and down and it could literally change week to week, so that's why we don't comment.

Speaker Change: One of the pieces that we're seeing is.

On availability in that business. But, uh,

Speaker Change: No.

Speaker Change: Reversing next quarter.

as you can see, we the the nature of the product.

That's a part and helps us with our mission of good, better best. And in that case, it's probably best. Plus, I guess you would call it.

Speaker Change: Yeah.

One other one other thing I would jump in with their also Alex as you are asking about.

Thank you.

Speaker Change: That home margin and as I talked before we're bullish on home in total.

Our next question will come from John Kernan with TD Cowen. Your line is open.

Speaker Change: But our home margins are healthy across the board. So we're always feeling good.

Good morning, everybody. Thanks for taking our question.

Speaker Change: <unk>.

Consume up all Footwear accessories.

Speaker Change: And especially Directionally as you can see where were you and John just spoke about how the last quarter was a nice margin of Homegoods, we're feeling good about our <unk>.

A lot of questions on on home here. What what else would like to focus in on a few of the other categories like Beauty?

Commentary on some of the categories outside of home and mental health.

You go in the stores. It looks like these categories continue to be elevated and some of them are seem like they're getting floor space. So let me just say

See, some of the other businesses I guess you would you're calling them consumables. Uh, obviously you can

Yeah. No John great. Great observation and great question, obviously. Yeah, you can

Speaker Change: Home business margins in general So just so you know it's a.

Speaker Change: That's another positive which is also in an industry, where oftentimes if margins are challenging but some of that has to do with those categories.

Job and things like that Aur.

There's many categories throughout the store that you would call consumables. I believe that those businesses are part of every 1 of Our Brands right now is doing a

On that because we do a, a good consistent flow of freshness there. And we talk about an error, we kind of crush

Speaker Change: That other retailers do more of their business and obviously, we're more fashion driven and are collected.

Value. And whether you look at the beauty business, you look at, or if you look at, uh, our pet business, uh, which is a consumable really, for the most part.

competition on value.

Speaker Change: But thanks.

Speaker Change: Thanks for the question.

Of them. Everyone needs to replenish their their uh their their earpods, uh, very often or their phone cases or right. And so all of the things that

Um, or many of the other areas, uh, uh, some of them are in home. Some of them are not there by our q line up by the front of the store. You know, many of those. Even though you wouldn't think

Speaker Change: Our next question will come from Ike <unk> with Wells Fargo. Please go ahead.

Speaker Change: Hi, Good morning, everyone, just wanted to kind of dig a little bit more on the overseas comp.

You just called out.

have been uh very strong and we continue to have it be that we believe their traffic I believe their traffic builders

Speaker Change: One of the best performance as you guys have put up in a few years I think just maybe just could you talk to the macro and both of those key regions, Australia and Europe kind of curious if anything is changing for the better at a higher level. When you look at it and then just a follow up to that.

your visit, uh, Builders as well as they're a form of, um,

And frequency.

extreme value, because

Most of those categories.

When you go to buy them in another retail or online, um I believe the initial markups on those, in the retails are pretty high and so we show exceptional value.

Value on those consumable areas which obviously the customer appreciates.

Speaker Change: Should we expect kind of similar dynamic with <unk>.

I'm in a, in a great way. So uh I'm glad you actually called that out because we don't really talk about that as we don't really talk about that as much. Was it wasn't there. There was another

Uh, because the customer is getting something that they know they're buying often and they're saving money. Every

Speaker Change: <unk> talked about the weather was unfavorable it shifted more Max improved as it come at the same thing with Europe weather was very favorable and some things have normalized.

Piece. Were you asking about a powerless? Yeah. Well uh

No. Just, you know, I wanted to talk on the court on the categories outside of core. Ladies and men. Yeah, no, I think

In terms of the comps the comps kind of normalizing as well after a really robust three deal.

Great, I follow up to John might be just on. Um yeah, the gross margin. Got question got asked a few different ways, what?

Speaker Change: Yes.

Driver of further, merchandise margin expansion, is it as simple as um full price sell through markup mark on. Like how do we think about the

What would be the long?

Speaker Change: Go ahead.

Term merchandise, margin opportunity, outside of, you know, those leverage on 3 to 4 cops.

I mean, our Europe.

Speaker Change: National comp I mean, we had.

Speaker Change: Our strong comp both in Europe and in Australia.

Yeah. Um,

Speaker Change: And it's.

you know, obviously if there was a, uh, a change in in, uh, expense based, I mean, if if uh, if you know because

Speaker Change: The international comp is.

Speaker Change: A portion of that excellent execution, but also whether that Ernie I'd called out.

The model. But, you know, the number 1 lever that we have to pull is, is the Top Line growth and that's really where we see the opportunity going forward.

You know, as we say you know, no outsized expense increases. If we started to see some expense decreases in certain areas, I mean that that could change.

Speaker Change: So nothing more to add on that.

Speaker Change: As far as the Mar Max comp.

Speaker Change: We continue to execute well there.

Forward, uh, of just continuing to to grab market, share and continuing to grab that Top Line.

Speaker Change: And we're confident in our plans for the fourth quarter.

Speaker Change: I guess, what my question is have you seen a normalization in the Thompson.

Thank you, John.

That's great. Thanks guys. Best of luck.

Next, we will hear from Adrienne ye whith Barkleys, you may proceed.

Speaker Change: Seasonal benefit.

Speaker Change: It seems kind of weighing the board just like with <unk>, the seasonal headwinds as Wayne.

Let me add my congratulations. So, um, Ernie. We always say, you know, all roads lead to off price. So here's a little bit of a conundrum for you. Would you rather write?

Great, thank you very much.

Would you rather be in a in a backdrop? That is pressured where you are taking share and getting trade down. Um or would you rather be in a healthier environment?

Speaker Change: <unk> was for that business right. So I think what youre getting.

Speaker Change: So when you are getting at yes.

Speaker Change: We would not.

Speaker Change: Plan to assume we're going to run at seven comps.

Like maybe by demand in the back half of next year, where you can raise prices relative to the market, but maybe inventory is a little bit cleaner.

Speaker Change: All the time, because again part of that was a benefit from the weather change and that goes away just by the way, yes, Youre exactly right just as in my remarks that kind of went the other way and could go the other way.

I think we fell in in any kind of economic uh, time. I mean we've consistently shown that

I think the last

Speaker Change: You also asked I think about the macro environment I think the macro environment has not really changed much in Europe. That's still about the same as it was more about our own execute yes.

um,

tend to be, you know, a a retailer that that customers look for

That uh if if if times are good, we trade. Well if times are troubled, you know, people are looking for Value, you know? We

I don't know if you have any of that Ernie. I I, I do um, Adrienne. I favor the um,

Speaker Change: And the weather.

I like them both scenarios for different reasons. The only thing is on the second 1 and I think your guests for me is I would slightly favored the little healthier environment but

Speaker Change: And then obviously here in the states, saying same.

Speaker Change: Same thing.

You said, uh, a little cleaner. Um, the only thing we have I haven't witnessed that. So meaning when, when the environment is healthy is strangely enough, what ends up

Speaker Change: So.

Speaker Change: That's helpful. Thank you already I appreciate it.

Happening. Is you have this initial lag? Uh, but when we tells you get healthier, uh, the wholesalers and those retailers tend to cut a meaning,

Speaker Change: Very well.

Speaker Change: Next we will hear from Bob <unk> with Guggenheim.

You May go ahead.

More. A little bit more Goods, more aggressively.

Good morning.

Cleaner for like a quarter or something. Do you know what I mean? So, um, yeah. I like the healthier because it generally also, even though initally first blush, you would think it would lean.

To uh, Chase what they believe is going to be a healthier Trend which ultimately doesn't lead to cleaner. It might be

Speaker Change: Following up on the home business can you spend some time just on home sense sort of how youre doing in the various regions.

Speaker Change: U S Canada Europe. Thanks.

whith uh lead to leaner uh excess inventories, our experience has been that, that hasn't happened so for the but but then for the original

Speaker Change: Oh sure.

Speaker Change: Oh.

Speaker Change: Yes, so <unk> we've been.

Speaker Change: Very happy with it.

And in fact.

Is good. Where

We we do well on the other environment too. So I just personally like what you were saying on the second 1,

prices are, you know, up and then everyone can just we can maintain our gaap and meanwhile you have to John's

Speaker Change: As I was.

Speaker Change: Really trying to hint that earlier is our home business across the board has been healthy.

Is, you know, you're comping a really heroic home comp are you seeing a little bit of kind of movement? Um, you know, housing has started to move a tiny bit with rates coming down,

And then, um, my second follow-up.

Of it. Um, how does that work? Sort of in a Fed cutting cycle. I would imagine the Horizon for the next year, looks pretty good for HomeGoods. And you're

Speaker Change: We're liking what we're seeing.

Speaker Change: Most part some exceptions.

Speaker Change: Throughout every.

Speaker Change: Geographic area that we're in we were positive across all geographic areas that we have.

Already starting to see that come through. So comments on that Ernie.

Aur John. Yeah I think Adrienne Wright know, I know what you're getting at. We think um

Speaker Change: These home businesses.

Speaker Change: And again that includes the apparel stores, where we have home as well that's right the full family stores right.

A little bit of that starting. I think that would be more next year where we believe there's a Tailwind a little bit to your point, to help because home starts if interest.

There might be.

Speaker Change: And by the way in Europe that was part of our strong performance right John on the up last quarter so pumps.

Mortgage rates did come down a notch, maybe you get more of that. Even if it's not home, starts, people are are more willing to now, go buy fresh accessories or decor for their home.

Homes, and I think that's probably the play right now. I believe this is more of our own internal, uh, strong execution. By the team that drove more.

Speaker Change: There as well.

Speaker Change: We're also.

Speaker Change: We had a pickup recently in our homes in the U S business.

Up against the big comp. Um, and I believe it's also uh,

Because we've been playing with some execution issues there.

uh, the

Speaker Change: Not not trouble per se by the ability to we think do more business then.

Environment, where a lot of the competition has really looked stale.

Speaker Change: Going forward by tweaking the mix. So we don't say what that is but we've done some good things in the teens I give them a lot of credit on that.

and so I think it's allowing us to even more shine and so some of the things that you

if you walk in a HomeGoods right now, if you look at our holiday

from our holiday signing package to all of the giftables to the

Speaker Change: Business, but now feeling really good across of obviously in Australia, we do home and are within our there is no separate business versus in the other geographies, having said that.

We have their extremely gift oriented. I think the biggest thing right now is setting, setting HomeGoods apart from all the other competition out there right now is I believe

different, uh, food categories that

Speaker Change: That has.

Speaker Change: Also been healthier.

The biggest thing. And then I think to your point in the spring I believe we might get a little bit of a Tailwind help.

Speaker Change: So yes again, all the indicators are and I go back to we do our home business differently, our merchants theyre collaborate.

Be more of.

Uh, uh, by what could potentially?

What you're talking about new new home, or new purchases for your current home?

Speaker Change: And our creative and I think all of you have seen this what we give to the consumer in our home area is very different than what any other retailer does even though in some categories. We're overlapping the.

Given given the, uh, the economics.

Thank you so much. Well, done to the team.

Speaker Change: Approach is so much more eclectic and by the way good better best throughout the entire home area just as in the rest of our stores.

From Dana telsey.

Group, your line is open.

Hi. Good afternoon everyone and congratulations on the nice results. I would say that your marketing or any of of of HomeGoods what you had.

Speaker Change: So.

In Madison Square Park, with the HomeGoods house looked terrific in New York a couple weeks ago.

Speaker Change: Couldnt be couldnt be happier with where we're headed there.

Speaker Change: Great and just within the <unk> business.

So you saw that that was yeah, that's great.

Speaker Change: One piece of the business are you seeing sort of better availability and some of the luxury goods areas for some of your stores.

Yeah. Oh, not only

Pictures too. Oh, it looks terrific. Um and it was a traffic driver. Yeah.

So the other thing just to know as you think about marketing, how do you think a marketing is a percent of sales going forward? How is it different? This holiday season from last and on the other note of real estate, what are you seeing in terms of new store performance of relocations? And

Speaker Change: But we usually don't comment on anything like that specific effect, but availability is.

Speaker Change: Has been okay. There is such a limited we don't really use that as a bellwether availability for us because it's only limited store base and that kind of moves because of the.

Remodels any shifts in store size? Thank you.

yeah, well, first of all, on our um, marketing, our attitude is to

Speaker Change: The smaller resource structure, there, it's a bit more up and down and it could literally change week to week. So that's why we don't comment.

Play a little bit of offense, so we're spending a little bit more. Um,

Speaker Change: On availability in that business, but.

Speaker Change: As you can see with the nature of the products that we have there is really what sets us apart and helps us with our mission of good better best and in that case, that's probably best plus I guess you would call it.

And our creative, which I would love to.

You know.

We have uh, groups coming up, but, you know, we'd love you. You guys just to see the marketing campaigns. If you haven't seen some of the TV spots that have already been playing.

Speaker Change: Great. Thanks.

Speaker Change: Thanks.

um, we think they're just terrific and I think

Speaker Change: Our next question will come from John Kernan with TD Cowen Your line is open.

Also.

to get an educating consumers, I haven't shopped us to understand the value and what it is to

Shop us and that's going to be playing out really strong. I think the teams have. So we always look at Marketing in terms of the what we're spending obviously to your first part of

Good morning, everybody. Thanks for taking our question.

Question. But what is the creative 1? We're spending it on and because that you need that to be breakthrough and then to you're trying to get an additional visit from either your infrequent.

Speaker Change: I want a question on home here one would also like was focused in on a few of the other categories like beauty.

Shoppers or grab new customers and the and the campaigns were running really are geared at all really going after a lot of consumers that haven't even entertained.

Speaker Change: <unk> footwear accessories.

Coming to us. So uh, really feeling good about that. Um, John, do you want to? Yeah, so your question around the relocations of remodels, um, as far as

Speaker Change: And the stores it looks like these categories continue to elevate and some of them are it seems like we're gaining floor space. So we need to.

3 models, go. We're ensuring that we're staying, you know, keep keeping the estate, uh, fresh and so that, when a customer comes in, no matter what store, they come into.

Speaker Change: Any commentary on some of the categories outside of home and men's and ladies apparel.

you know, they get the same shopping experience and and that the maintaining, that just means that, you know, we're not going to start to, you know, lose sales due to, you know,

Speaker Change: Yes, no John Great Great observation on Great question, obviously, yes, you can see some of the other businesses I guess, you would you're calling them consumables. Obviously, you can see what we're doing a great job and things like that or beauty or.

core shopping environment, and then the the relocations where we can, uh, where we see the opportunity to move into a, a better retail area, you know,

Speaker Change: There is many categories throughout the store that you would call consumables I believe that those businesses are part of every one of our brands right now is doing a lot in that because we do a good consistent flow of freshness, there and we.

We see uh definite positives in, in the relocations that that we've done over the last number of years.

Thank you.

Thank you, Dana.

And uh I would like to thank uh uh thank everyone for joining us today. We look forward.

Speaker Change: Talk about an area, we kind of crush competition on value our value and whether you look at the beauty business you look at our if you look at.

To updating all of you again on our fourth quarter, earnings call in February and uh again thanks for your time. And uh, everyone have a

Speaker Change: Our pet business, which is a consumable really for the most part.

Safe holiday.

Speaker Change: Many of the other areas.

Ladies and gentlemen, that concludes your conference call for today. You may all disconnect. Thank you for participating.

Speaker Change: Some of them are in home some of them are not there by our queue line up at the front of the store many of those even though you wouldn't think of them everyone needs to replenish their.

Speaker Change: Dairy dairy or pods, very often or their phone cases are.

Speaker Change: And so all of the things that you just called out.

Speaker Change: Ben.

Speaker Change: Very strong and we continue to have it be that we believe their traffic I believe the traffic builders.

And frequency of visit.

Speaker Change: Builders as well as they are a form of.

Speaker Change: Extreme value because.

Speaker Change: Most of those categories. When you go to buy them in other retail or online.

Speaker Change: I believe the initial markups on those in the retails are pretty high and so we show exceptional value on those consumable areas, which obviously the customer appreciates.

Speaker Change: Because the customer is getting something that they know they are buying often and.

Speaker Change: And they are saving money every time and a great way. So I'm glad you actually called that out because we don't really talk about that is we don't really talk about that as much whereas it wasn't there was another piece, where you asking about apparel.

Speaker Change: Yes.

Speaker Change: Wanted to talk on the court on the categories outside of core ladies and mens.

Speaker Change: Yeah, Yeah, no I think that's.

Speaker Change: Great.

A follow up and John might be judged on.

Speaker Change: Yes. The gross margin question got asked a few different ways.

Speaker Change: What would be the long term driver.

Merchandise margin expansion isn't as simple as.

Speaker Change: Full price sell through Mark Mark on like how do we think about the long term.

Speaker Change: Margin opportunity outside of that John.

Speaker Change: John.

Speaker Change: Comps.

Speaker Change: [laughter] yeah.

Obviously, if there was a change in expense base.

Speaker Change: If.

It's because.

Speaker Change: As we say no outsized expense increases if we started to see some expense decreases in certain areas that could change the model, but the number one lever that we have to pull as the topline growth and Thats really where we see the opportunity going forward.

Speaker Change: <unk>.

Speaker Change: Just continuing to grab market share and continuing to grab that topline.

Speaker Change: That's great. Thanks, guys best of luck.

Speaker Change: Thank you John.

Speaker Change: Next we will hear from Adrienne <unk> with Barclays. You May proceed.

Adrienne <unk>: Great. Thank you very much let me add my congratulations.

Adrienne <unk>: Okay.

Speaker Change: Lead to off price.

Speaker Change: A little bit of a conundrum for Ya.

Speaker Change: Rather we'd rather be in a backdrop that is pressured where you are taking share and getting trade down.

Or would you rather be in a healthier environment can you like maybe by demand in the back half of next year, where you can raise prices relative to the market that maybe inventory.

Speaker Change: Sure.

Speaker Change: I think the latter.

Speaker Change: I think we could very well.

Mhm.

Speaker Change: And any kind of economic time.

Speaker Change: Consistently shown that.

Speaker Change: That if if if times are good we trade well if times are troubled people are looking for value we tend to be.

Ernie Herrman: Retailer that customers look for I don't know if you have anything to add Ernie.

Ernie Herrman: I do Adrian I favor the.

Ernie Herrman: I like them both scenarios for different reasons. The only thing is on the second one I think your guess for me is I would slightly favour the little healthier environment, but you said.

Ernie Herrman: A little cleaner.

Ernie Herrman: The only thing we have I havent witness that so meaning when when the environment is healthier strangely enough. What ends up happening is you have this initial lag but.

Ernie Herrman: But when retailers get healthier the wholesalers and those retailers tend to cut.

Meaning place more a little bit more goods more aggressively to chase what they believe is going to be a healthier trend, which ultimately doesn't lead to cleaner it might be cleaner for like Paris on the D&O, what I mean so.

Ernie Herrman: I liked the healthier because it generally also even though innately first blush, you would think it would lean.

Ernie Herrman: Need to lean our.

Ernie Herrman: Excess inventories that our experience has been that that hasn't happened so far.

Ernie Herrman: But then for the original reasons you were saying I think it's good.

Ernie Herrman: <unk> are.

Ernie Herrman: And then everyone can just we can maintain our gap in that or no.

Ernie Herrman: Meanwhile, you have to John's point, we do well in the environment too so.

Speaker Change: I just personally like what you were saying on the second one.

And then my second follow up is you're Comping, a really hero at home comp are you seeing a little bit of kind of movement.

Speaker Change: Starting to move a tiny bit with rates coming down a bit.

Speaker Change: How does that work sort of in a fed cutting cycle I would imagine the horizons.

Speaker Change: Next year look pretty good for home goods and you're already starting to see that come through with no comment on that Ernie.

Speaker Change: Yeah, I think Adrian right now I know, what you're getting at we think.

Speaker Change: There might be a little bit of that starting I think that would be more next year, where we believe there is a tailwind a little bit to your point to help because some starts if interest if mortgage rates did come down a notch maybe you get more of that even if it's not home starts people are more willing to now go bright fresh accessories.

Or decor for their homes and I think thats, probably the play right now I believe this is more of our own internal strong execution by the team that drove more of that comp against the big comp.

Speaker Change: And I believe it's also.

Speaker Change: <unk>.

Speaker Change: The environment, where a lot of the competition has really looked stale.

Speaker Change: And so I think it's allowing us to even more shine and so some of the things that if you walk in a homegoods right now if you look at our holiday.

Speaker Change: From our holiday signing package to all of the gift the balls to the DIFM.

Different.

Ladies and gentlemen, thank you for standing by. Welcome to the TJX companies, third quarter.

Food categories that we have they're extremely gift oriented I think the biggest thing right now of setting setting homegoods apart from all the other competition out there right now is I believe the biggest thing and then I think to your point in the spring I believe we might get a little bit of a tailwind help.

Fiscal 2025 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 1. As a reminder, this conference call is being recorded. November 202024, I would like

To turn the conference call over to Mr. Ernie Herrman. Chief executive officer and president of the TJX companies Inc. Please go ahead, sir.

Speaker Change: By what could potentially be more of what you are talking about new new home or new purchases for your current home.

Uh, before we begin Deb has some opening comments.

thanks, you

Thank you Ernie and good morning. Today's call is being recorded and includes forward-looking.

Speaker Change: Given given the.

Speaker Change: The economics.

Speaker Change: Thank you so much well done to the team.

Speaker Change: Thank you Adrian.

And our final question of the day comes from Dana Telsey with Telsey Group. Your line is open.

Hi, good afternoon, everyone and congratulations on the nice results I would say that you're marketing.

Speaker Change: Of home goods, what you had in Madison Square Park with the Homegoods House look terrific in New York, a couple of weeks ago.

Speaker Change: Well you saw that that was yes, that's great.

Speaker Change: I have pictures too.

Speaker Change: Thanks.

Speaker Change: And it was a traffic driver yeah.

Adult 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

Ladies and gentlemen, thank you for standing by. Welcome to the TJX companies. Third quarter, fiscal 2025 Financial results.

So.

Speaker Change: Other thing just as you think about marketing how do you think of marketing as a percent of sales going forward. How is it different this holiday season from last and on the other note of real estate. What are you seeing in terms of new store performance of relocations and Remodels any shifts in store size. Thank you.

Need to press star 1. As a reminder, this conference call is being recorded. November 202024, I would like to turn the conference call. Over to Mr. Ernie.

Determine chief executive officer and president of the TJX companies Inc. Please go ahead, sir.

Speaker Change: Yes, well first of all on our marketing our.

Some opening comments.

The statements are subject to risks and uncertainties that could cause the actual results to very materially from these statements, including among others, the factors.

Speaker Change: <unk> to play a little bit of offense, so we're spending a little bit more.

Thank you Ernie and good morning. Today's call is being recorded and includes forward-looking statements about our results and plans.

Speaker Change: And our creative which I would love to.

Identified in our filings with the SEC.

Speaker Change: We have groups coming up but we.

Safe Harbor statements included in the investor section of our website tjx.com.

Please review our press release for a cautionary. Statement regarding forward-looking statements, as well as the full.

Speaker Change: We'd love you guys to see the marketing campaigns. If you haven't seen some of the TV spots that have already been playing.

International divisions in today's press release and in the investor section of tjx.com, along with the reconciliations to non-GAAP measures. We

We've also detailed the impact of Foreign Exchange and our Consolidated results and our

Speaker Change: We think they are just terrific.

Thank you and now I'll turn it back over to Ernie.

Speaker Change: And I think also.

Good morning, joining me and Deb on the call is John

Gareth educating consumers that haven't shopped us to understand the value and what it is to shop us.

I want to begin our.

Call today by saying that our hearts go out to all of our Associates, their families.

Speaker Change: And thats going to be playing a really strong I think the teams. So we always look at marketing in terms of the what we're spending obviously to your first part of your question, but what is the creative when we're spending it on.

And everyone who has been affected by Hurricane Seline and Milton.

To help with relief efforts, we made essential emergency supplies and resources available to our Associates and the impacted areas.

Speaker Change: And because you need that to be breakthrough and then to <unk>.

Speaker Change: Trying to get an additional visit from either your infrequent shoppers or grab new customers and the campaigns, we're running really geared at all really going after a lot of consumers that haven't even entertain coming.

To the world Central kitchen and the American Red Cross through our TJX Foundation.

We also made emergency Don.

We take our commitment to supporting Community, seriously?

And try to help local communities during times of need through our long-standing relationships with organizations, that provide critical support.

Speaker Change: Coming to us so.

Speaker Change: Really feeling good about that.

Speaker Change: John do you want to quest.

Speaker Change: Around the relocations and Remodels.

Now to our business update and third quarter results.

Speaker Change: Far as the Remodels go we're ensuring that we are seeing keep keeping the estate fresh.

I am very pleased with our third quarter performance.

Our Global Associates for their continued hard work and commitment to TJX.

I want to personally. Thank all of.

Speaker Change: Fresh and so that when a customer comes in no matter what store or they come into they get the same shopping experience and maintaining that just means that we're not going to start to lose sales due to a poor shopping environment and then the the relocations where we can.

Conster sales growth of 3% came in at the high end of our plan.

I particularly pleased with the operational execution across all of our divisions. As each delivered, comp store sales increases entirely driven by

Customer transactions.

%, common comp increase at our TJX international division.

I want to specifically highlight are European team for their efforts and strong results which drove the

Whith. Many of our Shoppers when they visited our stores.

Clearly our terrific assortment at Great values across our retail banners resonated

Our plans.

Speaker Change: We see the opportunity to move into a better retail area, we see death.

in terms of profitability, pre-tax profit margin and earnings per share both well, exceeded

Whith, our third quarter performance. We are once again, raising our full year outlook for pre-tax profit, margin and earnings per share.

John will talk to our profitability. Performance and guidance in more detail in a moment.

Speaker Change: Definitely positives.

Speaker Change: The locations that we've done over the last number of years.

Looking ahead.

The fourth quarter is off to a strong start.

We continue to see outstanding availability of goods across a wide range of brands.

Speaker Change: Thank you.

Speaker Change: Thank you Dana.

Speaker Change: And.

Gives us great confidence. In flowing, fresh exciting assortments to our stores and online this holiday season and Beyond.

which,

Speaker Change: I would like to think.

Speaker Change: Thank everyone for joining us today, we look forward to updating.

Speaker Change: You again on our fourth quarter earnings call in February.

Excited about the opportunities. We see to gain additional market, share, and continue our successful growth in the United States and internationally.

longer term, we are

Speaker Change: Again, thanks for your time and everyone have a safe holiday.

Holiday plans and our opportunities for Global growth in a moment.

I'll talk more about our.

Ladies and gentlemen that concludes your conference call for today you may all disconnect. Thank you for participating.

But first, I'll turn the call over to John to cover our third quarter results in more detail.

Thanks Ernie.

I also want to add my gratitude to all of our Global Associates for their continued dedication to TJX.

Third quarter has Ernie. Mentioned our Consolidated comp sales increased 3%, which was at the high end of our plan and entirely driven by customer transactions.

now, I'll share some additional details on the

once again, both our apparel and home categories, saw comp sales increases this quarter

Points versus last year.

pre-tax profit. Margin of 12.3% was up 30.

Pre-tax profit. Margin was 40. Basis points above the high end of our plan primarily due to a benefit from the timing of certain

Expenses. Most of which we expect will reverse out in the in the fourth quarter expense savings and higher net interest income.

Whith, 50 basis, points was up 50 basis points versus last year. This favorability was primarily due to an increase in merchandised margin.

Gross margin.

Sgn.

Increase 10 basis points versus last year.

Benefit from closing HomeGoods e-commerce business last year in lower incentive compensation expense this year.

This increase was due to incremental store wage and payroll costs which largely offset the year-over-year

Earnings per share of A14. We're up 11% versus last year and also well above plan.

Lastly, we're very pleased that

Performance again, this quarter across all of our divisions, the comp increases were entirely driven by customer transactions. We see this as a great indication.

Now, to our third quarter division,

Of the strength of our value proposition.

Up 30 basis points versus last year.

At marmaxx comp store sales increased 2% in segment, profit margin was 14.3%.

During the third quarter. Marmaxx, a sales were negatively impacted by store closures due to the hurricanes.

Marmaxx is apparel and home categories, both saw comp sales increases.

we are excited about the initiatives, we have planned to drive sales and

Customer transactions at TJ Maxx, and Marshalls this holiday season.

Further, we have some great merchandise plans for our us. E-commerce sites and our Sierra.

Long-term, we remain confident that marmaxx our largest division can further grow its customer base and increase its market share.

200 basis points versus last year.

HomeGoods comp store, sales increased 3%, segment profit, margin grew, uh, to 12.3% up.

as a reminder, last year, we had a significant negative impact from the costs associated with the closing of our HomeGoods on

Business.

During the third quarter, we were proud to open our 1,000 store in our HomeGoods division, a terrific milestone.

whith, a

Differentiated mix of eclectic merchandise from around the world. We believe that both HomeGoods and home sense are well, positioned.

Market over the long term.

to capture additional, share of the

Basis was 15.2% down, 170 basis points versus last year.

At tgx Canada. Our comp store sales were up 2% segment profit. Margin on a constant currency.

was due to some non-recurring items last year and this year that impacted our impacted our year-over-year comparability,

I want to mention that most of the year-over-year declined in Canada's March.

That along with.

Increase freight costs, due to the rail to do the rail shutdown.

Customer base in our offering. Well, recognized retail Brands across good better, and best categories.

We are the only major off-price retailer in Canada. We have a very low.

To attract even more customers to all 3 of our Canadian banners.

we believe that this sets us up well,

At TJX International cop, store sales increased 7%.

Whith. Strong increases in both Europe and Australia.

180 basis points versus last year. As Ernie said, we are very pleased with our European results, which which drove this divisions overall performance.

Segment profit margin on a constant currency. Basis, improved 7.2% up 100

Going forward. We are confident that we can gain additional share of both the European and Australian, retail markets and increased this divisions profitability.

Ernie will have more to say on our International growth opportunities in a moment.

% and inventory on a per per store. Basis was down, 2% driven by lower Holdings at our distribution centers. We feel great about our liquidity

Moving to inventory. Balance sheet, inventory was up 1%.

In the outstanding availability, we're seeing in the marketplace.

We are very well positioned to flow, fresh assortments to our stores and online throughout the holiday season.

I'll finish with our Capital, allocation.

Business and returning cash to shareholders through our buyback and dividend programs. Now, I'll turn it back to Ernie.

we were very pleased to generate another quarter of strong cash flow while also reinvesting in the growth of our

Thanks John. Now, I'll highlight

The opportunities we see that, give us confidence.

That we can keep driving sales and customer transactions in the fourth quarter.

First. And most importantly, we remain committed to delivering outstanding value to our Shoppers every day.

This holiday season consumers can expect to see Great Value throughout our stores every time.

We see this as a meaningful Advantage, as consumers can shop. Our excellent values every day and not have to wait for sales or promotional days elsewhere.

Second with the outstanding availability, we have been seeing in the marketplace. We are well positioned. As a destination for gifts this holiday season.

our banners are set up extremely well to offer Shoppers across a broad range of income demographics and exciting selection of gifts at price points that can meet their

each of,

Budgets.

Whith gift offerings in every Department. We believe our stores are an appealing, 1 destination for consumers to buy for everyone on

Further, after the holiday season, we'll continue our focus on being a year-round, gifting destination.

Key differentiator of our business.

next, as we do all year long, we plan to flow fresh merchandise to our stores and online multiple times a week, which we believe is a

Whith our ever-changing assortment of merchandise. We are confident that Shoppers can see something new every time they visit.

In addition, we feel great about our plans to flex our stores after the holidays to the categories. And Trends, We Believe consumers will be looking for to start the new year.

Lastly.

We feel great about our holiday marketing campaigns, which launched earlier this month.

Each of Our Brands are emphasizing gift giving and reinforcing our value leadership.

Something for everyone and demonstrate that our great values are available to everyone every day.

We plan to Showcase a wide selection of quality products to highlight that there is

Media Channels with an emphasis on digital to reach consumers across a wide age and income demographic who are seeking gifting inspiration.

Further. We plan to advertise through a variety of

Moving on, We believe, We are in an excellent position to continue. Continue capitalizing on the growth of off-price around the world. And further grow,

Our leadership position.

Ship.

Growth.

We strongly believe that our Decades of off-price expertise and knowledge is a tremendous advantage and will allow us to continue delivering comp store sales.

Giving me confidence is our very long track record of executing our flexible business model, and our value leadership,

Driving customer transactions and attracting new shoppers.

Follow to further grow, our store base, and our existing countries.

Next, we continue to see a significant opportunity to

whith over 5,000 stores today, we continue to see the potential to open a

Rather 1,200 Plus stores.