Five retailers that operate a combined 11,000+ U.S. stores reported Q1 earnings between Tuesday and Thursday.
TJX opened 48 net new stores. Ross opened 17. Target opened 7 and crossed the 2,000-store mark. Sam's Club added 9 new warehouses.
Home Depot opened 2. Lowe's reported 1,759 stores, flat for quarters.
Same 90-day window. Same consumer. Same macro.
This week's inflation data sharpened the picture. April CPI (Consumer Price Index) came in at +3.8% year-over-year, PPI (Producer Price Index) hit +6.0% (highest since December 2022), and real retail sales went backward for the first time this year. Consumers are spending more dollars and getting less for them.
Off-Price Opened 65 Stores in Q1. Home Improvement Opened 2.
The format split in Q1 earnings is the sharpest I've seen in this cycle.
TJX's Q1 press release dropped May 20: 48 net new stores, bringing the total to 5,262. Consolidated comp +6%. HomeGoods ran +9%, the segment leader. Pretax profit margin hit 12.0%, up 1.7 points YoY. TJX raised full-year guidance to $63.2-63.7B in net sales and $5.08-5.15 EPS. The long-term stated opportunity is 7,000+ global stores. They're 1,700+ stores short of their own ceiling and accelerating. HomeGoods, the segment growing fastest, typically opens in 25,000-30,000 sq ft freestanding or strip-center pads, the same box range coming out of the bankruptcy-supply pipeline.
Ross added 17 net new stores in Q1 (13 Ross Dress for Less, 4 dd's DISCOUNTS). Company guidance called for comp +7-8% and total sales +10-12%. The ~90-unit annual cadence holds.
Target's Q1 confirmed the same direction at a different price point: comp +5.6%, the first positive comp in five quarters. Traffic +4.4%. Seven net new stores, including the 2,000th Target. Digital comp +8.9%, same-day delivery +27%. Target isn't off-price, but the traffic number is doing the work, not the ticket. That's a trade-down signal inside a mass-merchandiser.
Home Depot's Q1 posted comp +0.4% on transactions -1.3% and average ticket +2.2%. Two net new stores. Full-year guidance: flat to +2% comp. Lowe's Q1 posted comp +0.6% (fourth consecutive positive quarter) with online +15.5%, 1,759 stores, no net new unit targets. The flat store count isn't just a demand story. Home Depot already operates 2,000+ U.S. locations, and last year's $18.25 billion SRS Distribution acquisition shifted capital toward specialty building-product branches (42 added in Q1 alone). Lowe's is channeling growth into digital and Pro. Both chains are growing through adjacencies, not new boxes.
The warehouse-club read from Walmart's Q1: Sam's Club comp +3.9% on transactions +6.2%, with nine new warehouses opened. Foot traffic into warehouse clubs is accelerating independently of price. That's a format signal, not a Walmart signal.
What this means: Underwrite expansion tenants at the format level, not the retail-sector level. The 65 off-price stores that opened in Q1 reflect pipeline decisions made 12-18 months ago, when the bankruptcy-supply wave (Edition 35's Burlington/Joann thesis) was already visible and leases were being signed against it. A Home Depot or Lowe's renewal reflects a chain that's shifted capital into specialty distribution and digital. Screen your tenant mix for which formats are still signing new leases and at what pace, not just which retailers posted positive comps.
I Profiled 30 of TJX's Q1 Trade Zones. Household Size Is the Variable They Hold Constant.
The 48-store number tells you TJX is expanding. It doesn't tell you where the formula works. So I profiled 30 of those Q1 openings through GrowthFactor — every confirmed address across all five banners (TJ Maxx, Marshalls, HomeGoods, HomeSense, Sierra), 10-minute drive-time isochrones on each.
The range across those 30 trade zones is enormous. Population spans 8,146 (Fort Payne, Alabama — a Marshalls) to 213,253 (Herald Square, Manhattan — the new TJ Maxx). Median household income runs from $36,529 to $150,634. Home values range from under $150K to over $1.2 million. The statistical spread on population is 1.06 — they're opening in radically different-sized markets.
But household size barely moves. The spread across all 30 trade zones is just 0.111 — the tightest of any demographic variable I measured. The mean is 2.43 persons per household. Fort Payne at 2.66, Herald Square at 1.68, and 28 trade zones in between, clustering within a quarter-person of the mean. Income spreads three times wider at 0.305. Home value six times wider at 0.717. TJX isn't selecting for wealthy markets or growing markets. They're selecting for a household structure — families and couples who shop together and buy across categories.
That pattern breaks into two tracks.
Track 1: Small-town Marshalls. Fifteen of the 30 trade zones are Marshalls, and nine of those have populations under 30,000. Woodward, Oklahoma (pop 12,917). Yankton, South Dakota (17,447). Fort Payne, Alabama (8,146). Average income across these small-town Marshalls: $57,251. Average household size: 2.44. Five of the nine are in markets with declining or flat population growth — Pekin, Illinois (-0.7%), New Castle, Pennsylvania (-0.6%), Mount Pleasant, Texas (-0.4%). These aren't growth plays. They're coverage plays: TJX is filling in markets that don't have off-price and probably won't attract a second competitor.
Track 2: Affluent suburban multi-banner. Georgetown, Texas gets a Marshalls and a HomeGoods at the same shopping center ($110K median income, +3.35% population growth). Buford, Georgia gets a HomeSense and a Sierra at Mall of Georgia ($86-89K income, +2.8-3.0% growth). Conway, South Carolina gets a Marshalls and a HomeGoods. Killeen and Casper each get two banners. Five co-located centers, 10 of the 34 stores (29%), all in markets growing faster than the national average. Same household size — 2.44 average across these multi-banner centers.
Two-thirds of the openings (20 of 30 trade zones) fall below the U.S. median household income of $80,000. TJX isn't chasing affluence. They're chasing a specific household type that exists in both a $37K-income Alabama town and a $110K-income Texas exurb. The household size constant means the playbook works for 2-3 person households regardless of how much they earn — the off-price value proposition scales down to Fort Payne and up to Georgetown without changing a thing.
What this means: Profile your candidate trade zones for household size before income. TJX varies income across a 4× range but won't sign a lease where average household size deviates far from 2.4. That's a filter you can apply today. And if you're a landlord in a sub-20K-population market — five of those declining-population towns just got a Marshalls. Off-price may be your best anchor prospect, not your last resort.
April Retail Sales Hit $757 Billion. Inflation Took the Real Gain.
Census Bureau advance retail sales for April, released May 14: $757.1 billion, +0.5% month-over-month, +4.9% YoY. That's the nominal number. Adjusted for inflation, real retail sales fell -0.2% month-over-month, the first negative print this year. Consumers spent more dollars and got less.
April CPI, released May 12: headline +3.8% YoY, up from +3.6% in March, the highest since May 2023. Core (ex-food and energy) +2.8% YoY. Energy drove more than 40% of the monthly increase. Shelter +0.6% month-over-month. Food at home +0.7%. The headline-to-core gap is widening again, which means energy is doing most of the work. Edition 35 flagged the April CPI as the inflection point for Q3 underwriting. Core came in at 2.8%, below 3%. That's the read: pipeline inflation is hot, but it hasn't fully passed through to the consumer yet.
April PPI, released May 13, showed where the pressure is building. Final demand +6.0% year-over-year, the highest since December 2022. Month-over-month +1.4%, the largest advance since March 2022. The driver is energy: gasoline +15.6%, diesel +12.6%, jet fuel +36.4%. Services +1.2% with transportation and warehousing +5.0%. BLS's intermediate demand pipeline: Stage 2 at +11.1%, the highest since September 2022.
Stage 2 PPI feeds into freight costs, construction materials, and build-out pricing. General contractors don't reprice bids in lockstep with PPI — they reflect a mix of spot materials, contracted labor, and project backlogs — but the direction is clear. At +11.1%, the cost environment for tenant improvements is trending 11% above a year ago at the input level.
Look at the category breakdown inside April retail sales. Gasoline stations: +2.8% month-over-month, +20.9% YoY. That's almost entirely price, not volume. Electronics and appliances: +1.4%. Nonstore retailers (e-commerce): +1.1%. Those held. Department stores: -3.2%. Furniture and home furnishings: -2.0%, running -3.6% YoY. Clothing and accessories: -1.5%. The nominal total hides a category split: essentials and energy are pulling the average up while discretionary physical retail is compressing.
What this means: Screen your tenant mix for exposure to the three categories that went negative in April: department stores, furniture, apparel. Any inline lease renewal in those categories should price against real sales trends, not nominal. The PPI pipeline at +6.0% signals the direction for tenant improvement asks over the next 6-12 months. If you're negotiating a build-out for an off-price tenant expanding into bankruptcy supply (Burlington, TJX, Ross), the +11.1% Stage 2 number is what's flowing through to their general contractor's material costs. Build it into the concession package now. The next Fed rate decision isn't until June 16-17.
West Marine's $167 Million in Lease Obligations Just Entered Bankruptcy Court
Edition 35 reported West Marine preparing a Chapter 11. It filed May 17.
The numbers are now public. ~200 stores across 34 states and Puerto Rico, all remaining open during proceedings. $167 million in future lease obligations. Total disclosed liabilities of $286.6 million ($167M lease + $120M unpaid trade and lease liabilities). Hilco Real Estate retained to "identify lease savings and assess potential store closures." CEO Paulee Day cited the "expansive real estate footprint and long-term lease obligations" as the reason restructuring required a court process. 96.2% of term loan lenders and 100% of first-in, last-out (FILO) lenders support the plan. Garmin International is the largest unsecured creditor at $8.57 million.
The format detail matters for CRE: West Marine stores run 2,500 to 50,000 sq ft, freestanding or strip-adjacent, almost always coastal or marina-proximate. They're destination retail ("you really won't see us in shopping malls," per the company). That makes them harder to backfill than a mall inline because the location logic is water access, not foot traffic.
Same week, two mall anchors went dark. Nordstrom's Galleria Dallas location closed May 16, the first Nordstrom ever opened in Texas. The company downsized from three floors to two in 2022 and now exits entirely, with two full-line stores and ten Nordstrom Rack locations remaining in DFW. Lease economics, not bankruptcy.
The faster signal this week: JCPenney's 53-year Springfield Town Center anchor goes dark May 24, and Dick's Sporting Goods already filed a site plan application on May 18 to take the space. Six days between announcement confirmation and replacement tenant filing. That replacement speed is worth tracking. When the re-tenanting pipeline runs that fast, the vacancy doesn't become a drag on the asset.
What this means: If you're a tenant-rep broker working coastal or marina-proximate freestanding space, West Marine's 200-store footprint enters the negotiable pipeline as Hilco identifies closures over the next 60-90 days. The 2,500-50,000 sq ft range overlaps with marine services, boating supply, specialty fitness, and experiential retail, not with off-price. Different replacement tenant pool, different timeline. For mall anchors: the JCPenney-to-Dick's sprint suggests replacement tenants are queued and waiting for specific dark dates. Track whether that pace holds for the Nordstrom Galleria box.
The macro reads this week are louder than usual. Consumer sentiment hit an all-time floor. PPI pipeline hit a 3.5-year ceiling. Retail sales went nominally positive and inflation-adjusted negative in the same print. And the FOMC just posted its most fractured vote in 34 years.
The FOMC minutes deserve a closer read. Kevin Warsh took over as Fed Chair on May 15. The April 28-29 meeting was Powell's last. An 8-4 vote with three hawks wanting to strip easing-bias language and one dove wanting a cut is a committee in genuine disagreement. The minutes flag "some policy firming would likely become appropriate if inflation were to continue to run persistently above 2%." With PCE at +3.5% and PPI at +6.0%, "persistently above 2%" is the current operating condition. Warsh's first FOMC is June 16-17, with a fresh Summary of Economic Projections. That's the rate-direction event.
Three Signals That Will Set Q3 Underwriting
Three things will tell us whether the format split holds, widens, or reverses:
- May 28: April PCE and revised Q1 GDP (double release). CPI told us the headline (+3.8%). PPI told us the pipeline (+6.0%). PCE is the metric the Fed actually watches. If core PCE comes in above 3.0%, the pipeline inflation has arrived at the consumer and Warsh's first FOMC has a tightening discussion. If core PCE stays in the 2.6-2.8% range, retailers are absorbing the cost (margin compression), and the store-opening pipeline keeps running. The GDP revision tells you whether the real economy is growing into the inflation or shrinking under it. Both numbers drop the same morning.
- TJX and Ross Q2 unit-opening cadence versus Home Depot and Lowe's capex allocation. This week told us the Q1 split. Q2 will tell us whether it's accelerating. If TJX sustains the 48-store quarterly pace (implying ~190 for the year against 146 guided), the bankruptcy-supply pipeline (Joann, West Marine, Nordstrom vacancies) is converting to signed leases faster than historical norms. Watch Home Depot's SRS branch additions versus retail store additions. They're building a distribution network that doesn't show up in traditional store-count metrics but competes for the same industrial real estate.
- Warsh's first public speech as Fed Chair. The April minutes showed a committee split four ways. Warsh didn't vote on April 28-29, so his position on rate direction is inference, not data. His first speech sets the tone for June 16-17. If he signals tolerance for above-2% PCE while energy normalizes, expansion underwriting stays loose and the off-price format keeps signing leases at this pace. If he signals a tightening bias, the pipeline set 12-18 months ago keeps delivering (those leases are signed), but new pipeline decisions freeze. For every lease you're negotiating right now, the rate path determines whether the tenant's next lease signs or doesn't.
In the same week, consumer sentiment hit a 74-year low, PPI hit a 3.5-year high, and five retailers added 86 stores. The feelings and the store openings are measuring different things. Track the format.
—Andrew
Head of Marketing, GrowthFactor