10-QPeriod: Q3 FY2015

TJX COMPANIES INC /DE/ Quarterly Report for Q3 Ended Nov 1, 2014

Filed December 2, 2014For Securities:TJX

Summary

TJX Companies reported solid performance for the third quarter and the first nine months of fiscal year 2015, ending November 1, 2014. Net sales increased by 6% to $7.4 billion for the quarter and 6% to $20.8 billion for the nine-month period, driven by a 2% increase in same-store sales for both periods and continued store expansion. Diluted earnings per share (EPS) were $0.85 for the quarter, a slight decrease from $0.86 in the prior year, while nine-month EPS grew 4% to $2.22 from $2.14. The company continued its aggressive share repurchase program, spending $1.2 billion in the first nine months of the year, which positively impacted EPS. Margins remained relatively stable, with a slight improvement in the selling, general, and administrative expense ratio, though cost of sales saw a minor increase year-over-year for the nine-month period. Financially, TJX demonstrated strong operating cash flow of $1.8 billion for the nine months, supporting capital expenditures of $706 million for store improvements and expansion. The company also strategically managed its debt, issuing new notes and redeeming older ones. With a robust balance sheet and strong liquidity, TJX appears well-positioned to continue its growth trajectory and return value to shareholders through share repurchases and dividends, despite facing challenges such as fluctuating foreign currency exchange rates and seasonal weather impacts.

Financial Highlights

47 data points
Beta

Revenue

$7.37B

29.4% Gross Margin

Net Income

$594.96M

8.1% Net Margin

EPS (Diluted)

$0.42

Total Assets

$11.59B

Cash & Equivalents

$2.15B

Free Cash Flow

$456.38M

Financial Statements
Beta
Revenue$7.37B
Gross Profit$2.16B
SG&A Expenses$1.19B
Operating Income$1.05B
Net Income$594.96M
EPS (Basic)$0.43
EPS (Diluted)$0.42
Shares Outstanding (Basic)1.38B
Shares Outstanding (Diluted)1.40B

Key Highlights

  • 1Net sales grew 6% year-over-year for both the third quarter ($7.4 billion) and the nine-month period ($20.8 billion).
  • 2Same-store sales increased by 2% for both the third quarter and the nine-month period, indicating continued customer demand.
  • 3Diluted EPS for the nine-month period increased 4% to $2.22, demonstrating profitable growth.
  • 4The company aggressively pursued share repurchases, spending $1.2 billion in the first nine months of the year, which benefits EPS.
  • 5Operating cash flow remained strong at $1.8 billion for the nine-month period, supporting business operations and investments.
  • 6HomeGoods segment showed particularly strong performance with a 15% increase in net sales for the quarter and a segment profit margin of 13.9%.
  • 7TJX managed its debt effectively, issuing new notes and redeeming existing ones, while maintaining access to significant credit facilities.

Frequently Asked Questions

TJX Companies reported a 6% increase in net sales for both the third quarter, reaching $7.4 billion, and the nine-month period, reaching $20.8 billion, compared to the same periods in the prior year. This growth was supported by a 2% increase in same-store sales for both periods and ongoing store expansion.

TJX continued its significant share repurchase program, spending $1.2 billion in the first nine months of fiscal 2015. This substantial buyback activity positively influenced earnings per share (EPS) by reducing the number of outstanding shares.

The HomeGoods segment was a standout performer, with net sales increasing 15% in the third quarter and achieving a segment profit margin of 13.9%. The Marmaxx segment saw a 4% increase in net sales and a stable profit margin. TJX Canada and TJX Europe also reported sales growth, though TJX Canada's results were impacted by currency fluctuations.

The company maintained a strong financial position with $1.8 billion in operating cash flow for the first nine months and significant liquidity. Capital expenditures were focused on store improvements and expansion. While facing some headwinds like foreign currency exchange and weather impacts, the company's overall performance and strategic capital allocation suggest a positive outlook for continued growth and shareholder returns.