10-QPeriod: Q3 FY2017

TJX COMPANIES INC /DE/ Quarterly Report for Q3 Ended Oct 29, 2016

Filed November 30, 2016For Securities:TJX

Summary

The TJX Companies, Inc. reported its fiscal third quarter and nine-month results for the period ending October 29, 2016. For the quarter, net sales increased by 7% to $8.3 billion, driven by a 5% increase in same-store sales, primarily due to higher customer traffic. Diluted earnings per share (EPS) were $0.83, a slight decrease from $0.86 in the prior year's quarter. This decrease was impacted by a $0.08 per share charge related to the early extinguishment of debt and a pension settlement charge. For the nine-month period, net sales grew 8% to $23.7 billion, with same-store sales up 5%. Diluted EPS for the nine months increased to $2.43 from $2.35 in the prior year. The company repurchased approximately $1.2 billion of its stock during the nine-month period, contributing to the EPS growth. TJX continues to expand its store footprint, with a 5% increase in stores and 4% in selling square footage year-over-year.

Financial Highlights

49 data points
Beta

Revenue

$8.29B

29.5% Gross Margin

Net Income

$549.79M

6.6% Net Margin

EPS (Diluted)

$0.41

Total Assets

$12.87B

Cash & Equivalents

$2.38B

Free Cash Flow

$669.91M

Financial Statements
Beta
Revenue$8.29B
Gross Profit$2.45B
SG&A Expenses$1.46B
Operating Income$1.08B
Net Income$549.79M
EPS (Basic)$0.42
EPS (Diluted)$0.41
Shares Outstanding (Basic)1.31B
Shares Outstanding (Diluted)1.32B

Key Highlights

  • 1Net sales for the third quarter increased 7% to $8.3 billion, and 8% for the nine-month period to $23.7 billion.
  • 2Same-store sales increased 5% in the third quarter and for the nine-month period, driven primarily by increased customer traffic.
  • 3Diluted EPS for the third quarter was $0.83, down from $0.86 in the prior year, impacted by non-recurring charges.
  • 4Diluted EPS for the nine-month period was $2.43, up from $2.35 in the prior year.
  • 5The company repurchased $1.2 billion of its common stock in the first nine months of the fiscal year.
  • 6TJX International segment experienced a net sales decrease of 1% in the third quarter due to foreign currency translation, despite a 13% increase from new stores.
  • 7A significant pre-tax loss of $51.8 million was recorded for the early extinguishment of debt.

Frequently Asked Questions

TJX's sales growth in the third quarter was primarily driven by a 5% increase in same-store sales, largely attributable to higher customer traffic. Additionally, new store openings contributed to the overall sales increase.

Despite increased sales, diluted earnings per share decreased slightly in the third quarter due to specific charges, including a $51.8 million loss from the early extinguishment of debt and a $31.2 million non-cash pension settlement charge. These items collectively reduced EPS by $0.08.

During the first nine months of fiscal 2017, TJX generated strong operating cash flow of $2.1 billion. The company used a significant portion of this for strategic investments, including $767 million in property additions for store expansion and improvements, and repurchased $1.2 billion of its common stock.

The TJX Canada segment showed strong performance with net sales increasing 14% in the third quarter and 11% for the nine-month period, driven by robust same-store sales growth. However, the TJX International segment saw a 1% decrease in net sales for the third quarter, primarily due to adverse foreign currency translation, although new store openings provided some offset.