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This week’s quarterly earnings reports told two stories about the state of retail.
First, Target reported a third quarter decline in traffic and sales and cut its outlook for the year. Then there’s TJX, owner of “off-price” stores T.J. Maxx, Marshalls, and HomeGoods. The company actually beat expectations and raised its profit forecast this morning. The off-price retailers are really strong right now, said analyst Janet Kloppenburg of JJK Research.
“I would say that there's very few retailers who are performing at the level that TJX is performing at,” Kloppenburg said. That success starts with the business model.
“A lot of times they're buying excess inventory from other retailers or other brands,” Said said Nicole DeHoratius at Columbia Business School. She added the challenges facing retail lately, including tariffs, benefit the TJX model. “The more challenge that the traditional retailer has in ordering goods, in forecasting inventory, in forecasting their own demand, the better off the TJX companies are because there's going to be supply and demand mismatches,” DeHoratius said. That means excess inventory to buy and sell.
“They're providing high quality products at a less than normal retail price,” said Peter Zaleski, an economist at Villanova University. He said that’s why these stores consistently get a lot of traffic.
“It's not a very highly cyclical company. So, in a boom, they may not see sales spike but in a recession, they may actually pick up customers,” Zaleski said. | 
