10-KPeriod: FY2020

TJX COMPANIES INC /DE/ Annual Report, Year Ended Feb 1, 2020

Filed March 27, 2020For Securities:TJX

Summary

The TJX Companies, Inc. (TJX) reported net sales of $41.7 billion for the fiscal year ended February 1, 2020, representing a 7% increase over the prior year. This growth was driven by a 4% increase in comparable store sales, primarily fueled by higher customer traffic across all four of its operating segments: Marmaxx (U.S.), HomeGoods (U.S.), TJX Canada, and TJX International. Diluted earnings per share (EPS) rose to $2.67 from $2.43 in the previous year. The company continues to execute its off-price retail strategy, emphasizing a rapidly changing assortment of quality, branded merchandise at significant discounts. Despite a solid financial performance in fiscal year 2020, the report highlights significant emerging risks, notably the immediate and evolving impact of the COVID-19 pandemic. In response, TJX temporarily closed its stores and online operations in March 2020, suspended its share repurchase program, and withdrew its financial guidance for fiscal year 2021. The company also secured a $1.0 billion drawdown on its credit facilities to maintain liquidity. Other considerations include the ongoing impact of tariffs, the ramifications of Brexit on its European operations, and potential economic downturns impacting consumer spending.

Financial Highlights

50 data points
Beta

Revenue

$41.72B

28.5% Gross Margin

Net Income

$3.27B

7.8% Net Margin

EPS (Diluted)

$2.67

Total Assets

$24.15B

Cash & Equivalents

$3.22B

Free Cash Flow

$2.84B

Financial Statements
Beta
Revenue$41.72B
Cost of Revenue$29.85B
Gross Profit$11.87B
SG&A Expenses$7.45B
Interest Expense$61.40M
Net Income$3.27B
EPS (Basic)$2.71
EPS (Diluted)$2.67
Shares Outstanding (Basic)1.21B
Shares Outstanding (Diluted)1.23B

Key Highlights

  • 1Net sales grew by 7% to $41.7 billion for fiscal year 2020, driven by a 4% increase in comparable store sales and expansion of its store base.
  • 2Diluted EPS increased to $2.67, up from $2.43 in fiscal year 2019, reflecting improved profitability.
  • 3The company experienced strong customer traffic growth across all its major segments, underpinning its off-price value proposition.
  • 4TJX operates a vast network of over 4,500 stores globally across its Marmaxx, HomeGoods, TJX Canada, and TJX International segments, with continued plans for store growth.
  • 5The company proactively took measures to preserve liquidity in response to the COVID-19 pandemic, including temporarily closing stores, suspending share repurchases, and drawing on credit facilities.
  • 6Significant risks identified include the ongoing impact of the COVID-19 pandemic, potential global economic downturns, Brexit, tariffs, and supply chain disruptions.

Frequently Asked Questions

For the fiscal year ended February 1, 2020, TJX reported net sales of $41.7 billion, a 7% increase from the prior year. Comparable store sales grew by 4%, driven by increased customer traffic. Diluted earnings per share (EPS) rose to $2.67, up from $2.43 in fiscal year 2019.

The primary risk highlighted is the significant and evolving impact of the COVID-19 pandemic, which led to temporary store closures, online business shutdowns, and suspension of share repurchases. Other material risks include global economic conditions, the impact of Brexit on European operations, tariffs on imported goods (especially from China), supply chain disruptions, and the company's ability to successfully execute its opportunistic buying strategy and manage its large-scale operations.

TJX's growth strategy historically relies on expanding its store base and leveraging its flexible off-price business model. The company plans for continued store growth. However, the immediate impact of COVID-19 has led to temporary store closures and the suspension of financial guidance for fiscal year 2021, creating significant near-term uncertainty for its growth trajectory.

In response to the pandemic, TJX took several proactive steps to bolster its financial position and liquidity. These included temporarily closing stores and online businesses, committing to pay employees through a certain date, suspending its share repurchase program, reviewing operating expenses, reducing capital expenditures, and drawing $1.0 billion on its revolving credit facilities. The company also indicated it would not declare a dividend for the first quarter of fiscal 2021.