TJ Maxx and Marshalls can “isolate” prices because their business model recovers the inventory that is not sold from other retailers

• TJ Maxx and Marshalls Parent Company TJX has an advantage During its retail rivals at a reduced price, analysts said. TJX is a retailer at a reduced price which supplies with a large part of its inventory of unsold products from other retailers, which means that it does not have to pay tariffs on most of its goods. In addition, consumers continue to retreat to the discretionary goods of other retailers.

Off -price retailers like TJ Maxx remain strong in the midst of pricing concerns and economic uncertainty thanks in part to their ability to draw the inventory from not sold products from other retailers – after the initial buyer has already paid them import taxes.

TJX, the parent company of TJ Maxx, Homegoods and Marshalls, reported on Wednesday results better than expected in the first quarter, displaying $ 13.11 billion in net sales for the quarter, compared to the $ 13.01 billion estimated, according to data compiled by LSEG. The course of TJX’s action dropped by around 3% from Wednesday afternoon after CEO Ernie Herrman warned that the company was “not immune to pricing”.

“The availability of the goods we see is exceptional, and we are in good position to take advantage of the abundant opportunities that the market offers,” said Herrman during a call with investors on Wednesday. “We have confidence in our ability to navigate the current short -term macro.”

Excluding retailers are able to maintain low prices while keeping an inventory of unsold articles from other retailers, as well as offers directly with manufacturers of bulk brand products. While logistics experts and economists have warned against empty shelves following prices that cause business imports, Herrman has raised stock concerns. The company declared a 7% increase in the inventory per store.

“This is a typical remark, but is important at a time when investors are worried about empty shelves,” Bank of America’s analyst Lorraine Hutchinson said in a note to investors on Wednesday.

“ Isolated ” of economic uncertainty

Bank of America predicted earlier this month that the out-of-the-price retailers would be able to use the unwanted inventory research strategy of other retailers to “isolate” prices.

“The theory is that the inventory would have already been [subject to] The prices [absorbed] By the original buyer, ”said Brian Mulberry, director of the customer portfolio at Zacks Investment Management Fortune. “Consequently, retailers at reduced prices do not transmit this, or they do not feel the same level of prices.”

TJX gets around 60% of its products from other retailers and around 40% of agreements with manufacturers, said Mulberry. Although 40% of stocks purchased directly from manufacturers are subject to prices, these products, often brand products, have a high call to consumers who could otherwise jump on discretionary purchases to save money.

“If there is a certain type of pressure on the American consumer who makes them a little more concerned with costs, the discounts they get to TJX speak to the wallet, if you want, of the consumer,” said Mulberry.

Advantage of housing.

Herrman said he was convinced that stores, especially residents, will continue to be well supplied even if prices on China hover 30%, because TJX relies on around 21,000 sellers in 100 countries.

“Our merchants deal with negotiations with the seller, who is really in negotiations, with their factories in China,” he said. “I think availability will be fine. There are so many sellers that we are dealing with … I don’t really worry about empty shelves. ”

The well -supplied TJX’s shelves and reduction prices gave it one step ahead of other reduction retailers, said Mulberry. Target, which continues to publish lamentable income, has struggled to move the inventory from the pandemic. Although he was not always known as a discount store, he had to reduce prices on many of his goods in order to move them. However, the size of Target tickets, or the quantity of buyers spent by transaction, decreased this quarter. The goal did not immediately meet FortuneComment request.

Since TJX maintained its directives for the year 2026 of an increase of 2% to 3% in comparable sales, analyst UBS Jay Sole posed that the company would also have the advantage over competitors at full prices.

“Our point of view is that TJX will take major markets of the peers of department stores in the coming years,” said Sole in a note on Wednesday.

This story was initially presented on Fortune.com