The 'off-price' boom: Retail giant announces $2.5B buyback as discount shopping surges
Even as higher-end department stores struggle, off-price retail is thriving, showing that Americans are still spending, just more selectively.
TJX Companies – which owns TJ Maxx, Marshalls and HomeGoods – blew past Wall Street expectations in its fourth quarter earnings report Wednesday morning.
Sales surged 9% year-over-year to $17.7 billion in the fourth quarter, with comparable store sales up 5%. TJX also boosted its quarterly dividend 13% to 48 cents per share, and brought in a net income of $1.8 billion that quarter.
More notably, the report revealed that the retail company plans to repurchase between $2.5 billion and $2.75 billion in stock this fiscal year, as TJX noted "continued strong cash flow." It’s a major signal management believes the "trade-down" trend isn’t temporary.
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"Thanks to the collective efforts and sharp execution of our teams, we delivered above-plan results on both the top- and bottom-line. Annual sales surpassed $60 billion, marking a major milestone for our Company," TJX President and CEO Ernie Herrman said in a press release.
"We had an excellent fourth quarter, with sales, profitability and earnings per share all well above our plan," he continued. "Throughout the year, we stayed focused on our off-price fundamentals to bring customers great values, brands and fashions as well as an exciting treasure-hunt shopping experience every day."
The off-price store success comes around the same time as traditional department stores struggle to boost sales. Not only did the parent of Saks Fifth Avenue and Neiman Marcus file for bankruptcy in January, but Macy’s and Nordstrom have both reported sluggish sales and pressure on discretionary spending as higher-income shoppers pull back and promotional activity intensifies.
A report published earlier this week by Coherent Market Insights found that the global off-price retail market had an estimated value of $372.5 billion in 2025 and is expected to reach $668.3 billion by 2032. On average, off-price stores offer name-brand items at 30% to 60% lower price points.
Shoppers may lean toward off-price stores, especially as inflation remains elevated. On Friday, the Commerce Department reported that the personal consumption expenditures (PCE) index rose 0.4% in December on a monthly basis and was up 2.9% from a year ago. Those figures were both slightly hotter than the estimate of LSEG economists, who predicted 0.3% and 2.8%, respectively.
Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation.
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Looking ahead to fiscal 2027, TJX expects comparable sales to increase 2% to 3% and diluted earnings per share in the range of $4.93 to $5.02.
"As we begin 2026, the first quarter is off to a strong start and availability of quality merchandise continues to be outstanding," Herrman said. "Long term, we are excited about the opportunities we see to keep growing our business and capture additional market share around the world for many years to come."