10-QPeriod: Q2 FY2019

TJX COMPANIES INC /DE/ Quarterly Report for Q2 Ended Aug 4, 2018

Filed August 31, 2018For Securities:TJX

Summary

TJX Companies Inc. reported a strong second quarter for fiscal year 2019, with net sales increasing by 12% to $9.3 billion compared to the prior year period. This growth was driven by a 6% increase in consolidated comparable store sales, largely attributed to higher customer traffic, and a 5% contribution from new store openings. Diluted earnings per share (EPS) saw a significant rise to $1.17, up from $0.85 in the same quarter last year. This improvement was bolstered by a lower effective income tax rate due to the Tax Cuts and Jobs Act of 2017, which provided an estimated $0.18 benefit to EPS. The company also returned substantial capital to shareholders through $844 million in share repurchases and dividends during the quarter. Operationally, the company managed its cost of sales effectively, with the ratio decreasing slightly, while SG&A expenses saw a modest increase due to restructuring costs and wage increases. Inventory management appears robust, with a 5% increase in average per-store inventories compared to a decrease in the prior year. All major segments, including Marmaxx, HomeGoods, TJX Canada, and TJX International, demonstrated sales growth, with TJX Canada and TJX International showing particularly strong segment profit margin improvements. The company maintains a solid liquidity position with $2.9 billion in cash and cash equivalents.

Financial Highlights

48 data points
Beta

Revenue

$9.33B

28.9% Gross Margin

Net Income

$739.63M

7.9% Net Margin

EPS (Diluted)

$0.58

Total Assets

$14.11B

Cash & Equivalents

$2.87B

Free Cash Flow

$526.82M

Financial Statements
Beta
Revenue$9.33B
Cost of Revenue$6.64B
Gross Profit$2.70B
SG&A Expenses$1.70B
Operating Income$1.16B
Net Income$739.63M
EPS (Basic)$0.59
EPS (Diluted)$0.58
Shares Outstanding (Basic)1.25B
Shares Outstanding (Diluted)1.27B

Key Highlights

  • 1Net sales increased by 12% to $9.3 billion for the second quarter of fiscal 2019.
  • 2Consolidated comparable store sales increased by 6%, driven by customer traffic.
  • 3Diluted earnings per share (EPS) rose to $1.17 from $0.85 in the prior year's second quarter.
  • 4The effective income tax rate decreased significantly due to the Tax Cuts and Jobs Act of 2017.
  • 5The company returned $844 million to shareholders via share repurchases and dividends during the quarter.
  • 6Inventory levels increased 5% year-over-year, reversing a prior year decline.
  • 7Strong sales growth across all major segments: Marmaxx, HomeGoods, TJX Canada, and TJX International.

Frequently Asked Questions

The primary driver of the 6% increase in consolidated comparable store sales for the second quarter of fiscal 2019 was an increase in customer traffic.

The Tax Cuts and Jobs Act of 2017 lowered the U.S. federal corporate tax rate, resulting in a lower effective income tax rate for TJX. This provided an estimated net benefit of approximately $0.18 per diluted share for the second quarter of fiscal 2019.

TJX actively returns capital to shareholders through a combination of share repurchases and dividend payments. In the second quarter of fiscal 2019, the company returned $844 million to shareholders through these methods. TJX has substantial authorized amounts remaining under its stock repurchase programs.

TJX's average per-store inventories increased by 5% on a reported basis at the end of the second quarter of fiscal 2019, compared to a 6% decline in the prior year's second quarter. This suggests a shift towards rebuilding inventory levels, potentially to meet anticipated demand or improve product availability.