10-KPeriod: FY2023

TJX COMPANIES INC /DE/ Annual Report, Year Ended Jan 28, 2023

Filed March 29, 2023For Securities:TJX

Summary

TJX Companies, Inc. (TJX) demonstrated resilience in fiscal year 2023, with net sales increasing 3% to $49.9 billion, reflecting a return to normalized operations post-pandemic. While U.S. comparable store sales remained flat, driven by an increased average ticket price offset by lower customer traffic, international segments showed strong growth. Diluted earnings per share were $2.97, impacted by a $0.14 charge related to an investment divestiture. The company maintained a strong balance sheet with $5.5 billion in cash and continued to return capital to shareholders, repurchasing $2.3 billion in stock and paying $1.3 billion in dividends. TJX's off-price model, characterized by opportunistic buying and a rapidly changing inventory, continues to be a key differentiator. The company expanded its store footprint by 3% to 4,835 stores and plans further growth in fiscal 2024. Despite headwinds from increased freight costs, higher markdowns, and inflationary pressures affecting merchandise margin, TJX's disciplined cost management, evident in a reduced SG&A expense ratio, and strategic investments in its supply chain position it for continued performance. The company's focus on delivering value to a broad customer base remains central to its strategy.

Financial Highlights

28 data points
Beta

Revenue

$49.94B

27.6% Gross Margin

Net Income

$3.50B

7.0% Net Margin

EPS (Diluted)

$2.97

Free Cash Flow

$2.63B

Financial Statements
Beta
Revenue$49.94B
Cost of Revenue$36.15B
Gross Profit$13.79B
SG&A Expenses$8.93B
Interest Expense$91.00M
Net Income$3.50B
EPS (Basic)$3.00
EPS (Diluted)$2.97
Shares Outstanding (Basic)1.17B
Shares Outstanding (Diluted)1.18B

Key Highlights

  • 1Net sales grew 3% to $49.9 billion in fiscal year 2023, indicating recovery and expansion.
  • 2U.S. comparable store sales were flat, with higher average ticket prices offsetting lower customer traffic, while international segments showed robust sales increases.
  • 3Diluted EPS of $2.97 was reported, including a $0.14 charge related to an investment divestiture.
  • 4The company returned $3.6 billion to shareholders through $2.3 billion in share repurchases and $1.3 billion in dividends.
  • 5TJX expanded its store base by 3% to 4,835 stores and plans further expansion in fiscal 2024.
  • 6Cost of sales increased due to higher freight costs, markdowns, and shrink, impacting merchandise margin, but was partially offset by strong markon.
  • 7SG&A expenses as a percentage of net sales decreased due to lower COVID-related payroll costs and reduced incentive compensation.

Frequently Asked Questions

TJX Companies reported a 3% increase in net sales for fiscal year 2023, reaching $49.9 billion, up from $48.5 billion in fiscal year 2022. This growth was driven by an increase in non-comp store sales, reflecting a fully operational store base compared to pandemic-related closures in the prior year. International segments, TJX Canada and TJX International, saw significant sales increases of 13% and 8% respectively.

Diluted earnings per share were $2.97 for fiscal 2023. The company faced challenges including a 0.9 percentage point increase in the cost of sales ratio, primarily due to higher freight costs (approximately 1.2 percentage points), increased markdowns, and shrink expense, which impacted merchandise margin. However, these were partially offset by strong markon. Selling, general, and administrative (SG&A) expenses as a percentage of net sales decreased by 0.8 percentage points, driven by lower payroll related to COVID-19 cost reductions and decreased share-based/incentive compensation.

TJX continues to execute its growth strategy through store expansion, adding 3% more stores to reach 4,835 locations by the end of fiscal 2023. The company plans to add approximately 45 net new Marmaxx stores, 50 HomeGoods stores, and 27 net new stores across Canada and International segments in fiscal 2024. TJX is also committed to returning capital to shareholders, having repurchased $2.3 billion in stock and paid $1.3 billion in dividends during fiscal 2023. A new $2 billion share repurchase program was authorized in February 2023.

Foreign currency exchange rates had a negative impact on TJX's reported net sales and earnings per share. For fiscal 2023, foreign currency exchange rates had a 5% negative impact on TJX Canada's net sales and a 14% negative impact on TJX International's net sales. On a reported basis, foreign currency exchange rates had a 2% negative impact on consolidated net sales. The company utilizes derivative financial instruments to hedge a portion of its foreign currency exposure, but significant fluctuations can still impact results.