Summary
The TJX Companies, Inc. (TJX) reported strong performance for the first quarter ended May 5, 2018. Net sales increased by 12% to $8.7 billion compared to the prior year, driven by a 3% increase in comparable store sales, with customer traffic being the primary driver. Diluted earnings per share (EPS) saw a significant jump to $1.13, up from $0.82 in the same period last year. This increase was positively impacted by approximately $0.17 per share from the 2017 Tax Act. The company also continued its commitment to returning capital to shareholders, with $597 million returned through share repurchases and dividends during the quarter. TJX's effective tax rate decreased significantly due to the reduction in the U.S. federal corporate tax rate. Operationally, TJX saw growth across most of its segments, with Marmaxx, TJX Canada, and TJX International all reporting increased net sales. While HomeGoods' net sales grew, its segment profit margin declined due to higher markdowns and supply chain costs. The company ended the quarter with a solid liquidity position, holding $2.7 billion in cash and cash equivalents, and has substantial availability under its credit facilities. TJX anticipates capital spending of approximately $1.4 billion for fiscal year 2019, to be funded through internally generated funds.
Financial Highlights
48 data points| Revenue | $8.69B |
| Cost of Revenue | $6.18B |
| Gross Profit | $2.51B |
| SG&A Expenses | $1.55B |
| Operating Income | $1.06B |
| Net Income | $716.38M |
| EPS (Basic) | $0.57 |
| EPS (Diluted) | $0.56 |
| Shares Outstanding (Basic) | 1.25B |
| Shares Outstanding (Diluted) | 1.27B |
Key Highlights
- 1Net sales increased by 12% to $8.7 billion in Q1 Fiscal 2019, compared to $7.8 billion in Q1 Fiscal 2018.
- 2Comparable store sales increased by 3%, driven primarily by customer traffic.
- 3Diluted Earnings Per Share (EPS) rose to $1.13 from $0.82 in the prior year's quarter, aided by a $0.17 per share benefit from the 2017 Tax Act.
- 4The company returned $597 million to shareholders through share repurchases ($395 million) and dividends ($197 million) in the quarter.
- 5Effective tax rate decreased to 25.0% from 35.6%, largely due to the Tax Cuts and Jobs Act of 2017.
- 6Marmaxx segment showed robust growth with net sales up 8% and segment profit margin slightly improved to 13.9%.
- 7TJX International reported a significant increase in net sales (up 24%) and segment profit margin (up to 3.4%), benefiting from currency translation and inventory derivative mark-to-market adjustments.