10-QPeriod: Q1 FY2015

TJX COMPANIES INC /DE/ Quarterly Report for Q1 Ended May 3, 2014

Filed May 30, 2014For Securities:TJX

Summary

TJX Companies reported solid results for the first quarter of fiscal 2015, ending May 3, 2014. Net sales increased by 5% to $6.5 billion, driven by a 1% rise in same-store sales and a 4% increase in selling square footage. Diluted earnings per share (EPS) grew by 3% to $0.64, demonstrating continued profitability. The company actively returned capital to shareholders, repurchasing $360 million in stock during the quarter, underscoring a commitment to shareholder value. While overall sales and EPS showed positive growth, a slight decrease in pre-tax margin to 11.3% from 11.8% was observed, primarily due to a decline in gross margin. This was attributed to decreased merchandise margins and buying and occupancy expense deleverage on modest same-store sales growth. Despite these pressures, TJX maintains a strong financial position with $2.06 billion in cash and cash equivalents, and it continues to expand its store base globally, indicating confidence in future growth opportunities.

Financial Highlights

46 data points
Beta

Revenue

$6.49B

27.9% Gross Margin

Net Income

$454.32M

7.0% Net Margin

EPS (Diluted)

$0.32

Total Assets

$10.43B

Cash & Equivalents

$2.06B

Free Cash Flow

$289.59M

Financial Statements
Beta
Revenue$6.49B
Gross Profit$1.81B
SG&A Expenses$1.07B
Operating Income$803.56M
Net Income$454.32M
EPS (Basic)$0.33
EPS (Diluted)$0.32
Shares Outstanding (Basic)1.40B
Shares Outstanding (Diluted)1.43B

Key Highlights

  • 1Net sales increased 5% to $6.5 billion for the first quarter of fiscal 2015.
  • 2Same-store sales increased by 1% in the first quarter, driven by higher average ticket prices, though customer traffic declined.
  • 3Diluted earnings per share (EPS) grew 3% to $0.64, compared to $0.62 in the prior year's quarter.
  • 4The company repurchased $360 million of its common stock during the quarter, reflecting a commitment to shareholder returns.
  • 5TJX continued its global expansion, with stores in operation increasing by 5% and selling square footage by 4% compared to the prior year.
  • 6The TJX Europe segment showed strong performance with net sales up 24% and same-store sales up 8%.
  • 7Despite overall growth, the pre-tax margin decreased slightly to 11.3% due to lower gross margins.

Frequently Asked Questions

TJX reported a 5% increase in net sales, reaching $6.5 billion for the thirteen weeks ended May 3, 2014, compared to $6.2 billion in the same period last year. This growth was a combination of a 1% increase in same-store sales and a 4% increase in selling square footage.

The TJX Europe segment demonstrated strong growth with a 24% increase in net sales and an 8% rise in same-store sales. TJX Canada saw a decrease in net sales by 6% (negatively impacted by currency translation), with a 1% decrease in same-store sales. In the U.S., Marmaxx net sales increased 2% with flat same-store sales, while HomeGoods saw a 10% net sales increase with a 3% rise in same-store sales.

During the first quarter of fiscal 2015, TJX repurchased $360 million of its common stock under its stock repurchase programs. The company also declared a cash dividend of $0.175 per share for the quarter, up from $0.145 in the prior year's comparable quarter, indicating a continued focus on both share buybacks and dividends.

The decrease in gross margin was primarily attributed to lower merchandise margins (0.3 percentage points) and buying and occupancy expense deleverage due to the modest 1% same-store sales growth. There was also a smaller impact from the mark-to-market adjustment on inventory hedges.