10-KPeriod: FY2016

TJX COMPANIES INC /DE/ Annual Report, Year Ended Jan 30, 2016

Filed March 29, 2016For Securities:TJX

Summary

TJX Companies Inc. (TJX) demonstrated robust performance in its fiscal year ending January 30, 2016, marked by a 6% increase in net sales to $30.9 billion and a 5% rise in same-store sales, driven by increased customer traffic. The company continues to execute its off-price retail strategy successfully, leveraging its opportunistic buying and flexible business model across its four major segments: Marmaxx, HomeGoods, TJX Canada, and TJX International. Financially, TJX reported diluted earnings per share of $3.33, an increase from $3.15 in the prior year. The company actively returned value to shareholders through substantial share repurchases totaling $1.8 billion and increased its quarterly dividend. Despite some pressure on selling, general, and administrative expenses due to a U.S. wage initiative, overall cost of sales as a percentage of net sales improved, benefiting from buying and occupancy leverage and an increased merchandise margin. With over 3,600 stores globally and plans for continued expansion, TJX is well-positioned for future growth by offering strong value to a broad customer base.

Financial Highlights

27 data points
Beta

Revenue

$30.94B

Net Income

$2.28B

7.4% Net Margin

EPS (Diluted)

$1.67

Free Cash Flow

$2.07B

Financial Statements
Beta
Revenue$30.94B
SG&A Expenses$5.21B
Operating Income$4.10B
Interest Expense$68.25M
Net Income$2.28B
EPS (Basic)$1.69
EPS (Diluted)$1.67
Shares Outstanding (Basic)1.35B
Shares Outstanding (Diluted)1.37B

Key Highlights

  • 1Net sales increased by 6% to $30.9 billion in fiscal 2016.
  • 2Same-store sales grew by 5%, primarily driven by increased customer traffic.
  • 3Diluted earnings per share (EPS) rose to $3.33 from $3.15 in the prior year.
  • 4The company returned significant capital to shareholders through $1.8 billion in share repurchases and an increased dividend.
  • 5The off-price model remains effective, with strong performance across key segments and an expanding store footprint (over 3,600 stores globally).
  • 6Merchandise margin improved, partially offsetting increased payroll costs due to a U.S. wage initiative.

Frequently Asked Questions

TJX's core strategy is to be the leading off-price retailer of apparel and home fashions globally. They differentiate themselves through an opportunistic buying approach, offering a rapidly changing assortment of quality, brand-name, and designer merchandise at prices generally 20% to 60% below department and specialty store regular prices, creating a 'treasure hunt' shopping experience for customers.

In fiscal year 2016, TJX reported strong financial results with net sales increasing by 6% to $30.9 billion and same-store sales growing by 5%. Diluted earnings per share were $3.33, up from $3.15 in the prior year. The company also continued its practice of returning capital to shareholders through share repurchases and dividends.

TJX operates through four primary segments: Marmaxx (T.J. Maxx and Marshalls in the U.S.), HomeGoods (in the U.S.), TJX Canada (Winners, HomeSense, and Marshalls in Canada), and TJX International (T.K. Maxx and HomeSense in Europe, and Trade Secret in Australia). Sierra Trading Post in the U.S. is reported within the Marmaxx segment.

Key risks include the successful execution of its opportunistic buying and inventory management strategy, the ability to continue expanding successfully while managing its scale, identifying and meeting evolving customer trends, intense competition, labor costs and associate retention, data security, and risks associated with international operations and currency fluctuations.