TJX Companies net sales grew 9% year on year on a reported basis to $54.2bn (£43.5bn) in the 53 weeks to 3 February 2024 (FY2023).
While TJX Companies’ UK subsidiary has yet to file its results for FY2023 with Companies House, Retail Navigator expects TKMaxx to report a strong set of results as its focus on value and eclectic product mix continues to chime well with shoppers.
Indeed, net sales for TJX International, which includes Europe and Australia (and therefore TK Maxx and Homesense in the UK), increased 9% year on year to $6.8bn (£5.4bn) in FY2023.
The UK business, which includes TK Maxx and Homesense, had reported a 17.5% year-on-year increase in sales to £3.89bn for the financial year to end-January 2023 (FY2022), following a 45.2% spike to £3.3bn in FY2021.
Having been significantly impacted during the pandemic, TK Maxx has since been focused on building awareness of its online channel to help bolster its omnichannel operations.
TK Maxx parent company TJX Companies, which comprises several brands, has over 4,900 stores worldwide giving it the advantage of significant physical scale.
However, the retailer still has a limited share of the ecommerce market, with sales through tkmaxx.com representing approximately 3% of net sales at TJX International in FY2022. While the treasure-hunt style shopping experience of TK Maxx stores is arguably hard to replicate online, there is still significant scope for the retailer to grow the ecommerce share of its total sales.
Opportunities and challenges for future growth
While TK Maxx’s focus on physical expansion will help it broaden its UK reach and bring its “big brands and designer labels” at “small prices” to more shoppers, bricks-and-mortar necessitates heavy investment into new locations.
However, more, smaller-format stores could be on the cards with TK Maxx reportedly having been actively scouting premises in London between 10,000 sq ft to 30,000 sq ft, demonstrating the vital ability to adapt to changing customer behaviour and economic pressures.
TK Maxx has recovered well from the pandemic, and looks positioned to continue its upward trajectory. Ongoing enhancement of its online offer and expanding its Homesense network will help the retailer capitalise on its positive momentum.
Given its opportunistic-buying business model, which allows it to pass savings on to shoppers, TK Maxx is well placed to benefit from the cost-of-living crisis, as customers become more willing to shop around and seek out bargains.
In contrast to ultra-fast-fashion retailers such as Shein, TK Maxx’s opportunistic buying model can mean that it typically has unusual or limited volumes of stock available. For customers looking for reliability in their shopping experience, the retailer may struggle to compete, necessitating a focus on its key differentiators such as a diverse assortment of popular brands and designer labels at more affordable prices.