Ernie Herrman
President and Chief Executive Officer at TJX Companies
Thanks, Scott. Now I'd like to highlight the opportunities we see to drive traffic and sales in the fourth quarter. First, in this inflationary environment, we believe it is an important as ever to deliver shoppers excellent value throughout the store and online every time they visit. This is our top priority and I am confident that our banners will be a destination for consumers seeking great value this holiday season. Second as, I've been saying all year long, the marketplace is absolutely loaded with quality branded merchandise across good, better and best brands.
Importantly, this has set us up very well to offer an excellent assortment of branded gifts this holiday season that we believe will excite and inspire our shoppers. Third, I want to highlight that we plan to flow fresh product to our stores and online multiple times a week, which is a key differentiator of our business compared to many other retailers. With a rapidly changing merchandise mix, I am confident that shoppers are going to be very satisfied with the gift assortments they see every time they visit.
Our store teams are excellent at managing this flow in creating fresh organized shopping presentations throughout our stores. Next, we feel great about our holiday marketing campaigns that just launched. We believe these campaigns can help drive traffic from both new and existing shoppers across each of our banners. This year, each of our divisions will reinforce our value leadership and emphasize that shoppers can get more for their money when they visit. We are also highlighting the fresh flow of merchandise throughout the holiday seasons, with messaging such as spend less, gift more all season long.
In the US and Canada, we are leveraging the strengths of our retail brand portfolio and multi-banner campaigns, helping to drive efficiencies and building awareness. Further, for all our retail banners, we have strong comprehensive marketing plans in-place to help us stand out.
Lastly, the flexibility of our business model has allowed us to successfully operate our business against some level of retail promotion every year for the past 46 years. I really want to emphasize that we are extremely confident that we can manage through any type of promotional environment that we may see from other retailers in the fourth quarter and beyond.
Looking beyond this year, we are convinced that we are set-up very well to capitalize on the growth opportunities we see for our business in the medium and long-term. On the top line, we believe we are well-positioned to capture additional market share. We see many opportunities to drive sales and traffic as we attract a wide range of customers across many income demographics, which we believe is a key advantage of our business. Further, we have substantial store growth potential remaining in our current geographies around the world, in a retail environment where overall pricing has been reset higher, we believe our value proposition will be even more compelling and visible to consumers and that our treasure hunt shopping experience will hold tremendous appeal.
I want to reiterate our continued confidence of product availability to support our long-term growth plans. Throughout our history, availability of quality branded inventory has never been an issue for us. Our more than 1,200 buyers source from a universe of approximately 21,000 vendors and from over 100 countries. There has always been significantly more merchandise in the marketplace then we could buy and we expect that to continue.
As to our profitability outlook, we remain committed to returning to our fiscal 2020 pretax margin level. To be clear, that would be a 10.6% pre-tax margin by fiscal 2025. Over the next two years, our plans assume additional merchandise margin opportunities across all of our divisions. We also expect our overall expense headwinds to moderate and that freight will be a tailwind next year.
Lastly, this outlook assumes that our overall comp store sales will return to a low-single digit increase in each of the next two years.
Turning to corporate responsibility, I am pleased to share with you that our 2022 global corporate responsibility report was published this past quarter and is available on tjx.com. This report summarizes our fiscal 2022 initiatives and progress within our four areas of focus which are workplace, communities, environmental sustainability and responsible business. The report includes an appendix of ESG data and maps our work and disclosures to a variety of ESG standards and frameworks.
Including the Global Reporting Initiative, the United Nations Sustainable Development Goals and the Sustainability Accounting Standards Board. We are proud to continue to make progress in our programs in initiatives and I'm grateful to our teams around the globe for the work they do to support our global priorities. As always, we invite you to visit tjx.com to read our full report and we'll continue to update the site over the next year.
In closing, I want to again thank all of our associates around the world for their hard work that led to our strong results in the third quarter. Our teams have put us in an excellent position this holiday season. I am convinced that we have some of the best talent in all of retail and across all areas of the business. Further, I believe their depth of off-price knowledge and expertise is unmatched and has driven our strong execution. I truly believe our associates will continue to be a major advantage for TJX going forward.
I am convinced that the flexibility of our off-price model and our commitment to value set us apart and have allowed us to successfully operate in many different economic, retail and promotional environments, while we are impacted by macro factors, we have historically outperformed in both good and bad environments throughout our 45 plus year history. We are confident that we can execute on our short and long-term growth plans to build TJX into an increasingly profitable $60 billion plus revenue company.
Now, I'll turn the call back to Scott to cover our full year and fourth quarter guidance and then we'll open it up for questions, Scott?