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CFO: New tariff impact 'difficult to forecast' for TJX

The TJX Cos. Inc. said Aug. 20 that the off-price fashion retailer has not yet committed to most of its merchandise for the crucial fourth quarter, making it difficult to predict any impact from new tariffs on Chinese goods.

Scott Goldenberg, senior executive vice president and CFO for TJX, said in a conference call that the Framingham, Mass.-based company has included a "small negative tariff impact" in its full-year guidance only for the merchandise that it has already committed to.

But TJX has not signed off on most of its merchandise for the fourth quarter, said Goldenberg, adding that it "remains difficult to forecast the impact if any and the extent to, which we could mitigate it."

"It remains to be seen what happens with vendor and competitor pricing, consumer demand, potential tariff pass-throughs and the fluctuation of the Chinese currency," Goldenberg said. "Over the long term, we are convinced that the flexibility of our business that has helped us navigate through both strong and weak times throughout our long history will continue to be a major advantage."

Goldenberg's comments came after TJX reported second quarter net income and sales that missed analysts estimates, despite marking the 20th consecutive quarter of customer traffic increases at TJX and the company's Marmaxx segment. TJX said the second quarter started off slow due to unseasonable weather but gained momentum later on.

The ongoing trade war between the U.S. and China is expected to impact several retailers including TJX. On Aug. 13, the White House delayed the imposition of tariffs on certain Chinese goods such as cellphones and laptops until Dec. 15. But items such as sweaters, various types of footwear, sunglasses, dishwashers, and books will face 10% tariffs starting Sept. 1.

TJX, which operates stores including Marshalls and HomeGoods, sells apparel, footwear and accessories as well as home fashions, giftware, soft home products, and decorative accessories.

"We continue to monitor the developments very closely and are currently analyzing the proposed list for tariff information," Goldenberg said.

President and CEO Ernie Herrman said the company has been making some recent "advantageous buys" that could be "due to early delivery of tariff category merchandise."

But longer-term, it is "to be seen" exactly how the tariffs could impact TJX, he said.

Even so, the company has several initiatives to drive sales and traffic in the back half of the year, including "phenomenal product availability" across various categories and major brands, "some of which we believe is related to tariffs," Herrman said.

"This gives us enormous confidence in our ability to bring consumers the right fashions at the right values throughout the upcoming fall and holiday selling season," he said.