TJX sales may surge in 2023 on bargain hunting for top fashion brands
TJX Cos Inc is likely to see a strong growth in annual sales as inflation pushes bargain-hungry but brand-conscious customers to off-price retailers offering cheaper deals and promotions.
The expected surge in demand for companies such as TJX, Ross Stores and Burlington Stores Inc follows a dull 2022 in which pandemic-weary consumers refreshed their wardrobes by splurging in U.S. department stores and retailers.
But their spending spree took a blow from soaring prices, forcing a large section of customers to curb their purchase of discretionary items such as high-end apparel.
"Off-prices are a great place to get branded merchandise at much cheaper prices than you would get at the department store or other full price retailers," Edward Jones analyst Brian Yarbrough said.
But heaving discounting may not be enough. Rising demand for cheaper branded items, analysts say, could put to test the ability of off-price stores to offer a good mix of high-end products such as Balenciaga, Gucci and Versace.
A case in point is Nordstrom Inc, which cut its annual profit forecast after its off-price store chain Rack failed to attract people despite heavy discounting due to inventory mismanagement.
Jessica Ramirez, analyst at Jane Hali and Associates, said TJX is in tune with what the customer is shopping for and are interested.
"TJX is very strong with their assortment ... they have been able to bring a lot of good names into their product offerings," she said.
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