10-QPeriod: Q1 FY2017

TJX COMPANIES INC /DE/ Quarterly Report for Q1 Ended Apr 30, 2016

Filed May 27, 2016For Securities:TJX

Summary

The TJX Companies, Inc. reported solid performance for the first quarter ended April 30, 2016. Net sales increased by a healthy 10% year-over-year to $7.5 billion, driven by a 7% increase in same-store sales, primarily fueled by higher customer traffic. Diluted earnings per share saw a 10% increase, reaching $0.76 from $0.69 in the prior year's first quarter. The company demonstrated effective cost management, with the cost of sales ratio improving slightly. However, the selling, general, and administrative expense ratio saw a modest increase due to investments in wage increases and growth initiatives. TJX continued its commitment to shareholder returns, repurchasing $375 million worth of its common stock during the quarter, alongside ongoing dividend payments.

Financial Highlights

48 data points
Beta

Revenue

$7.54B

28.8% Gross Margin

Net Income

$508.35M

6.7% Net Margin

EPS (Diluted)

$0.38

Total Assets

$11.70B

Cash & Equivalents

$1.94B

Free Cash Flow

$179.00M

Financial Statements
Beta
Revenue$7.54B
Gross Profit$2.17B
SG&A Expenses$1.34B
Operating Income$918.89M
Net Income$508.35M
EPS (Basic)$0.39
EPS (Diluted)$0.38
Shares Outstanding (Basic)1.32B
Shares Outstanding (Diluted)1.34B

Key Highlights

  • 1Net sales increased 10% to $7.5 billion, driven by a 7% increase in same-store sales, primarily from increased customer traffic.
  • 2Diluted earnings per share rose 10% to $0.76, compared to $0.69 in the prior year's first quarter.
  • 3Cost of sales as a percentage of net sales decreased by 0.5 percentage points, reflecting improved buying and occupancy expense leverage.
  • 4Selling, general, and administrative expenses as a percentage of net sales increased by 0.7 percentage points, mainly due to wage increases and investments in growth.
  • 5The company repurchased $375 million of its common stock during the quarter, continuing its program of returning capital to shareholders.
  • 6TJX International segment's segment profit margin decreased to 1.5% from 3.0%, impacted by integration costs of the newly acquired Trade Secret business.
  • 7Cash flow from operations remained strong at $420 million, although slightly lower than the prior year, impacted by increased inventory levels.

Frequently Asked Questions

TJX reported a 10% increase in net sales to $7.5 billion for the first quarter ended April 30, 2016. This growth was primarily driven by a 7% rise in same-store sales, largely due to an increase in customer traffic. Home fashions and apparel categories both experienced strong sales growth.

Diluted earnings per share for the first quarter of fiscal 2017 were $0.76, representing a 10% increase from $0.69 in the same period last year. The company's stock repurchase programs also contributed to EPS growth by reducing the number of weighted average shares outstanding.

The company's cost of sales ratio improved slightly due to buying and occupancy expense leverage on strong same-store sales growth. However, selling, general, and administrative expenses as a percentage of sales increased, mainly due to higher employee payroll costs from wage increases and investments to support growth. Consolidated average per store inventories increased by 7%.

TJX actively returns capital to shareholders through its stock repurchase programs and dividend payments. During the first quarter of fiscal 2017, the company repurchased $375 million of its common stock and continued to pay dividends. The company has significant capacity remaining under its authorized repurchase programs.