10-KPeriod: FY2013

TJX COMPANIES INC /DE/ Annual Report, Year Ended Feb 2, 2013

Filed April 2, 2013For Securities:TJX

Summary

TJX Companies, Inc. (TJX) reported a strong fiscal year ended February 2, 2013, with net sales reaching $25.9 billion, a 12% increase over the prior year, driven by robust same-store sales growth and strategic expansion. The company's off-price retail model, offering branded and designer merchandise at significant discounts, continues to resonate with a broad customer base across its Marmaxx, HomeGoods, TJX Canada, and TJX Europe divisions. Key to this performance was a 7% increase in same-store sales, largely attributed to increased customer traffic, alongside a 3% growth from new store openings and the benefit of a 53rd week in the fiscal calendar. Financially, TJX demonstrated solid earnings growth, with diluted earnings per share (EPS) rising 32% to $2.55. This growth was supported by improved merchandise margins, lower markdowns, and effective expense management, leading to a 1.5 percentage point increase in pre-tax margin. The company also continued its commitment to shareholder returns through significant stock repurchases and a planned increase in quarterly dividends for fiscal 2014. The acquisition of Sierra Trading Post, an online off-price retailer, signals TJX's strategic move into e-commerce, complementing its extensive physical store footprint and reinforcing its flexible, value-driven business model.

Financial Highlights

48 data points
Beta

Revenue

$25.88B

Net Income

$1.91B

7.4% Net Margin

EPS (Diluted)

$1.27

Total Assets

$9.51B

Cash & Equivalents

$1.81B

Free Cash Flow

$2.07B

Financial Statements
Beta
Revenue$25.88B
SG&A Expenses$4.25B
Operating Income$3.44B
Interest Expense$48.58M
Net Income$1.91B
EPS (Basic)$1.30
EPS (Diluted)$1.27
Shares Outstanding (Basic)1.47B
Shares Outstanding (Diluted)1.50B

Key Highlights

  • 1Record Net Sales: Achieved $25.9 billion in net sales for fiscal year 2013, a 12% increase over fiscal 2012.
  • 2Strong Same Store Sales Growth: Reported a 7% increase in same store sales, driven by higher customer traffic.
  • 3Profitability Improvement: Diluted EPS increased 32% to $2.55, supported by a 1.5 percentage point increase in pre-tax margin.
  • 4Strategic Store Expansion: Ended fiscal 2013 with 3,050 stores, a 5% increase, and planned further expansion for fiscal 2014.
  • 5Acquisition of Sierra Trading Post: Expanded into e-commerce with the acquisition of an online off-price retailer.
  • 6Shareholder Returns: Continued robust share repurchase program and increased planned quarterly dividends.
  • 7International Growth: TJX Europe showed a strong rebound with a 10% same store sales increase.

Frequently Asked Questions

TJX's primary strategy is to operate as an off-price retailer, offering a rapidly changing assortment of quality, fashionable, brand-name and designer merchandise at prices generally 20% to 60% below department and specialty store regular prices. This 'treasure hunt' shopping experience is designed to drive customer excitement and frequent visits.

TJX expands through multiple avenues: opening new stores across its Marmaxx, HomeGoods, TJX Canada, and TJX Europe divisions, optimizing existing store performance through renovations, and strategically acquiring businesses like Sierra Trading Post to enter new markets and channels, such as e-commerce.

Key risks include the successful execution of its opportunistic buying and inventory management strategies, the ability to continue expanding operations effectively, identifying and meeting customer trends, competition, managing global economic conditions, data security compromises, and potential disruptions from international operations or supply chain issues.

TJX employs an 'opportunistic buying' strategy, acquiring merchandise on an ongoing basis from various opportunities like order cancellations and manufacturer overruns, rather than ordering far in advance. This flexible model requires lean inventory levels and rapid inventory turns, supported by a global network of over 800 buyers.