10-KPeriod: FY2019

TJX COMPANIES INC /DE/ Annual Report, Year Ended Feb 2, 2019

Filed April 3, 2019For Securities:TJX

Summary

TJX Companies Inc. (TJX) demonstrated robust performance in its fiscal year ending February 2, 2019, marked by a significant increase in net sales to $39 billion, a 9% rise from the previous year. This growth was primarily driven by a strong 6% increase in comparable store sales, fueled by higher customer traffic across all four operating segments. Diluted earnings per share also saw a healthy increase, reaching $2.43 compared to $2.02 in fiscal 2018. The company's off-price retail model, characterized by opportunistic buying and a rapidly changing inventory, continues to resonate with a broad customer base, enabling it to capture market share and drive consistent top-line growth. TJX also reaffirmed its commitment to returning capital to shareholders through substantial stock repurchases totaling $2.5 billion and a planned increase in dividends. The company maintained its strategic focus on store expansion, adding 236 net new stores to reach a total of 4,306 by year-end, with further expansion planned. While facing rising supply chain costs and an increase in incentive compensation, TJX managed its Selling, General, and Administrative (SG&A) expenses effectively, keeping the ratio flat year-over-year. The report also highlights the company's proactive approach to managing risks, including international operations, currency fluctuations, and potential impacts of geopolitical events like Brexit. Overall, TJX presents a compelling narrative of sustained growth and operational efficiency within the competitive retail landscape.

Financial Highlights

51 data points
Beta

Revenue

$38.97B

28.6% Gross Margin

Net Income

$3.06B

7.9% Net Margin

EPS (Diluted)

$2.43

Total Assets

$14.33B

Cash & Equivalents

$3.03B

Free Cash Flow

$2.96B

Financial Statements
Beta
Revenue$38.97B
Cost of Revenue$27.83B
Gross Profit$11.14B
SG&A Expenses$6.92B
Operating Income$4.76B
Interest Expense$69.10M
Net Income$3.06B
EPS (Basic)$2.47
EPS (Diluted)$2.43
Shares Outstanding (Basic)1.24B
Shares Outstanding (Diluted)1.26B

Key Highlights

  • 1Net sales increased by 9% to $39 billion in fiscal 2019, driven by a 6% rise in comparable store sales, primarily due to increased customer traffic.
  • 2Diluted earnings per share grew to $2.43, up from $2.02 in the prior fiscal year.
  • 3TJX expanded its store count by 6% to 4,306 stores globally, underscoring its commitment to growth.
  • 4The company repurchased $2.5 billion of its common stock in fiscal 2019 and announced a new $1.5 billion repurchase program.
  • 5Pre-tax margin remained strong at 10.7%, reflecting effective cost management despite increased supply chain expenses.
  • 6TJX's international segments (Canada and Europe/Australia) showed solid sales growth, contributing to the overall company performance.
  • 7The company actively manages its diverse portfolio, with the Marmaxx and HomeGoods segments in the U.S. showing significant contributions to overall net sales and profitability.

Frequently Asked Questions

TJX's core strategy is to operate as the leading off-price apparel and home fashions retailer globally. It differentiates itself through an opportunistic buying strategy, offering a rapidly changing assortment of quality, brand-name, and designer merchandise at prices generally 20% to 60% below traditional retailers. This creates a 'treasure hunt' shopping experience that encourages frequent customer visits and leverages a flexible business model.

In fiscal year 2019, TJX reported a 9% increase in net sales to $39 billion, driven by a 6% increase in comparable store sales, largely due to higher customer traffic. Diluted earnings per share rose to $2.43. The company also successfully managed its pre-tax margin at 10.7% and continued its store expansion strategy.

Key risks include the execution of its opportunistic buying and inventory management strategies, potential impacts of global economic conditions, intense competition, the ability to attract and retain quality employees, and risks associated with international operations, currency fluctuations, and supply chain disruptions (such as Brexit). Data security and compliance with various regulations are also significant concerns.

TJX continues to prioritize store growth as a key part of its global strategy. In fiscal 2019, the company added 236 stores, bringing the total to over 4,300. It plans further expansion in fiscal year 2020 across its major segments, focusing on both new store openings and increases in selling square footage.