Chief Executive Officer & President at TJX Companies
Thanks, Scott. I'd like to start by sharing the key traffic sales and profitability opportunities we see for the remainder of the year. Starting with the top line. First, we are excited about our merchandising plans for the fall and holiday season. Again this year we will be flowing eclectic assortments to our stores and online multiple times a week. This is a strategy that has worked well for many years and sets us apart from other retailers during the busy holiday season as shoppers can see something new every time they visit us. We are confident that we can execute on our merchandising initiatives and manage our supply chain to keep our shelves fully stocked.
Second, availability of merchandise across good, better, and best brands is exceptional. We have plenty of open-to-buy, and I have great confidence that our buying team of more than 1,200 buyers will bring the right brands, fashions and values to our consumers throughout the years.
Next, we are laser-focused on driving traffic and sales with our marketing initiatives. This year, we have sharpened our messaging to reinforce our value leadership position. Each of our banners are communicating that we offer shoppers more for their money, and at the same time, deliver great brands and quality. In an environment where consumer wallets are stretched, we believe it is as important as ever to amplify our value messaging across television, digital and social media platforms. I also want to highlight that our customer satisfaction scores remain very strong. Further, we continue to attract a significant number of millennial and Gen Z shoppers, which we believe bodes well for the future.
Moving to profitability. We are extremely pleased that we are able to increase our full year pre-tax margin guidance in this environment, giving us confidence of the merchandise margin opportunities we see. The buying environment is very attractive, and we believe we can continue to benefit from buying better. Further, our pricing initiative is working very well. Our teams have done an outstanding job implementing this initiative over the past year, and we are very pleased that our value perception scores remain very strong. Again, we are seeing extraordinary off-price buying opportunities in the marketplace and have no issues with overall availability. We are in a terrific inventory position, and we have plenty of open-to-buy to take advantage of the current environment. This allows us to offer even more exciting merchandise and value to our shoppers, which is our top priority every day. Lastly, we remain focused on managing expenses and continue to look at ways to operate our business more efficiently.
Now, I'd like to remind you of the characteristics of our business that we believe strongly position us to continue our successful growth around the world over the medium and long term. First and foremost is the strong appeal of our great values, outstanding merchandise and differentiated treasure hunt shopping experience. Further we believe the ability to touch and feel merchandise and take it home the same day is very important to consumers.
Second, we see an excellent opportunity to grow our global store base by at least another 1,500 stores in our current geographies. We are extremely confident that there will be more than enough real estate locations and merchandise available to support our store growth plans. Again, being one of the most flexible retailers in the world is a tremendous advantage. The flexibility of our opportunistic buying, supply chain and store format enable us to change up our floor space to expand to hot categories and trends that shoppers are looking for.
As to profitability beyond this year, we remain committed to returning to our pre-COVID pre-tax margin level of 10.6% within three years. We expect that across all of our divisions, our merchandise margin opportunities, the moderation of expense headwinds, particularly freight, and our focus on expense management will contribute to our improved profitability. As always, we believe driving outsized sales is our best opportunity to improve pre-tax margin over the long term.
Turning to corporate responsibility. I'd like to update you on our commitment to building a more inclusive and diverse workplace. Last year, we completed our global associate inclusion and diversity survey. This was an important step, and we used the findings to help to find three global inclusion and diversity priorities for the company: increase the representation of diverse associates throughout all levels of our talent pipeline; equip leaders with the tools to support difference with awareness, fairness, sensitivity and transparency; and empower all associates to integrate inclusive behaviors, language and practices and how we work together and understand our role and responsibility and inclusion.
We have a number of initiatives underway to help support these priorities. For example, we have introduced a new leadership, competency and cultural factor focused on inclusion. In addition, associate resource groups similar to those we have in the U.S. have launched and are now active in both, Canada and Europe. Also, teams throughout the organization have set up committees to better incorporate inclusion and diversity into our everyday work.
In our communities, we continue to support a number of organizations that work with Black communities and other communities of color. In addition, we have deepened relationships with some non-profit partners in the U.S. to expand our reach to diverse students for recruitment efforts.
We appreciate that this is a work in progress, and we remain committed to our global priorities and helping associates feel welcome, valued and engaged.
In closing, I want to emphasize my confidence in the future of TJX. We have a long track record of successfully operating through many different types of economic and retail environments. We believe value is as important as ever to consumers, and delivering great value has been our mission for over 45 years.
We are very confident in the power of our off-price buying and pricing initiative while maintaining our value gap with other retailers, as always. We continue to invest in our stores and shopping experience, which we believe positions us strongly, and we remain committed to returning cash to shareholders. Further, we have a management team with decades of off-price expertise at TJX and a very deep bench of talent who have successfully navigated through the unprecedented COVID environment. I am convinced that we are set up well to grow our top and bottom lines over the medium and long term and am confident in our plans to grow TJX into an increasingly profitable $60 billion-plus revenue company.
Now, I'll turn the call back to Scott for some additional comments, and then we'll open it up for questions. Scott?