10-QPeriod: Q2 FY2014

TJX COMPANIES INC /DE/ Quarterly Report for Q2 Ended Aug 3, 2013

Filed August 30, 2013For Securities:TJX

Summary

TJX Companies reported a strong second quarter for fiscal year 2014, demonstrating robust sales and earnings growth despite a challenging retail environment. Net sales increased by 8% to $6.4 billion, driven by a 4% increase in same-store sales, which were fueled by higher average ticket prices and increased customer traffic. Diluted earnings per share saw an impressive 18% increase to $0.66, reflecting improved merchandise margins and operational efficiencies. The company also actively returned capital to shareholders through share repurchases and dividend payments, underscoring its financial health and commitment to shareholder value. The company's diverse segment performance contributed to the overall positive results, with Marmaxx and HomeGoods in the U.S. showing solid growth, while TJX Europe also delivered improved profitability and sales. TJX Canada experienced a slight decrease in segment profit margin due to currency exchange rates and increased investments. The balance sheet remains strong, with healthy cash reserves and ongoing investment in growth initiatives, including e-commerce and store expansion.

Financial Highlights

45 data points
Beta

Revenue

$6.44B

28.8% Gross Margin

Net Income

$479.56M

7.4% Net Margin

EPS (Diluted)

$0.33

Total Assets

$9.93B

Cash & Equivalents

$1.86B

Free Cash Flow

$272.03M

Financial Statements
Beta
Revenue$6.44B
Gross Profit$1.86B
SG&A Expenses$1.07B
Net Income$479.56M
EPS (Basic)$0.34
EPS (Diluted)$0.33
Shares Outstanding (Basic)1.43B
Shares Outstanding (Diluted)1.46B

Key Highlights

  • 1Net sales for the second quarter increased by 8% to $6.4 billion, compared to the prior year period.
  • 2Same-store sales increased by 4% in the second quarter, driven by both higher average ticket prices and increased customer traffic.
  • 3Diluted earnings per share (EPS) grew by 18% to $0.66, up from $0.56 in the same quarter last year.
  • 4Pre-tax margin improved by 0.5 percentage points to 12.0%, driven by better merchandise margins and buying/occupancy expense leverage.
  • 5The company repurchased $325 million of its common stock during the second quarter, demonstrating a commitment to returning capital to shareholders.
  • 6TJX Europe showed significant improvement in segment profit margin, increasing by 1.7 percentage points to 5.2%.
  • 7HomeGoods segment net sales increased by 15% in the second quarter, with strong same-store sales growth of 8%.

Frequently Asked Questions

TJX reported an 8% increase in net sales, reaching $6.4 billion for the second quarter of fiscal year 2014. This growth was supported by a 4% increase in same-store sales, driven by higher average ticket prices and increased customer traffic.

The Marmaxx segment (T.J. Maxx and Marshalls) in the U.S. saw an 8% increase in net sales and a segment profit margin of 15.1%. HomeGoods experienced a strong 15% increase in net sales and an improved segment profit margin of 11.8%. TJX Canada's net sales grew 3%, but segment profit margin decreased slightly. TJX Europe showed robust growth with a 9% net sales increase and a significant improvement in segment profit margin to 5.2%.

TJX's cost of sales ratio improved by 0.7 percentage points to 71.2% of net sales in the second quarter. This improvement was primarily attributed to increased merchandise margins and better leverage of buying and occupancy expenses due to same-store sales growth. Consolidated average per store inventories were down 5% compared to the prior year.

TJX demonstrated a strong commitment to shareholder returns by repurchasing $325 million of its common stock during the second quarter and $625 million in the first six months of fiscal year 2014. The company also increased its cash dividend per share. These actions, along with ongoing investments in growth initiatives, reflect a balanced approach to capital allocation.