Even retail’s sweet spot is turning sour.
TJX Cos., the operator of TJ Maxx and Home Goods stores, on Tuesday reported first-quarter sales that fell short of forecasts. This surprised analysts who had expected the off-price chain to defy the struggles of the broader retail industry. Shares fell 5 percent in reaction to the company’s first sales miss since the first quarter of 2014.
Investors may be overreacting to what will likely be a short-term blip. After all, TJX’s sales and earnings are still growing, which is more than traditional department stores can say. And the recent rash of store closings — accompanied by liquidation sales and discounts at struggling chains such as J.C. Penney Co. Inc. and Sears Holdings Co. — likely ratcheted up the competition for TJ Maxx’s discount clothing and accessories business.
But what if the worries are justified?
TJ Maxx, along with other off-price operators such as Nordstrom Inc.’s Rack stores and Ross Stores Inc., have been stealing market share from department stores for years by offering fashion labels and home goods at discounted prices.
But now, department stores such as Macy’s Inc., Kohl’s Corp. and Hudson’s Bay Co. are getting…