As previewed, the off-price retail category produced stellar Q3 2023 results, led by TJX Companies’ HomeGoods comparable-store sales growth of +9%. The increase puts HomeGoods revenue +23% above 2019’s level, just ahead of Marmaxx’s +22% gain over 2019. For the year, HomeGoods' profits will be 50% above 2019’s level and will generate $500M more in cash flow. The traffic and merchandise momentum set up TJX for a great Q4.
Management said there were no regional or consumer cohort disparities in performance; however, they did share that October started slower due to adverse weather and geopolitical events (which we see in our visitation data below). They also shared that comparable-ticket and average unit retail (AUR) declined as shoppers are picking lower-priced items. November was said to have "started strong", which we also see in our data.
Ross Stores reported a better-than-expected quarter, including a +5% comparable-store sales increase. This was a strong result given its more moderate household income consumer. Like TJX Companies, Ross described a relatively consistent level of performance across geographies, income cohorts, and the period, albeit some pluses and minuses as weather moved around. When discussing dd’s DISCOUNTS, President Michael Hartshorn shared, “[T]he customers responding to the broad assortment of values throughout the stores. And I'd also add easing inflation certainly doesn't hurt this customer.” This was the first call-out that we’ve seen that lower inflation may be leading to an increase in spending on discretionary goods. And indeed, Placer shows robust traffic gains for dd’s DISCOUNTS.
