Summary
The TJX Companies, Inc. reported strong financial results for the third quarter and the first nine months of fiscal year 2018, reflecting robust sales growth and improved profitability. Net sales increased by 12% to $9.8 billion for the third quarter and by 12% to $27.8 billion for the nine-month period, driven by a 7% consolidated comparable store sales increase in the quarter, with customer traffic being a key driver. Diluted earnings per share saw a significant improvement, reaching $0.61 for the quarter and $1.75 for the nine months, up from $0.50 and $1.33 respectively in the prior year. The company benefited from a lower effective income tax rate due to the U.S. federal corporate tax rate reduction, which contributed approximately $0.09 per share to the quarter's EPS and $0.26 to the nine-month EPS. While pre-tax margin decreased slightly due to factors like higher freight costs and increased supply chain expenses, overall profitability improved, supported by strong performance across its segments, particularly Marmaxx and TJX International. TJX also continued its commitment to shareholder returns, repurchasing approximately $1.6 billion in stock and paying out $0.7 billion in dividends during the first nine months of the fiscal year.
Financial Highlights
48 data points| Revenue | $9.83B |
| Cost of Revenue | $6.98B |
| Gross Profit | $2.84B |
| SG&A Expenses | $1.76B |
| Operating Income | $1.21B |
| Net Income | $762.25M |
| EPS (Basic) | $0.62 |
| EPS (Diluted) | $0.61 |
| Shares Outstanding (Basic) | 1.24B |
| Shares Outstanding (Diluted) | 1.26B |
Key Highlights
- 1Net sales for the third quarter increased 12% to $9.8 billion, driven by a 7% increase in comparable store sales, largely fueled by customer traffic.
- 2Diluted earnings per share (EPS) rose to $0.61 for the third quarter and $1.75 for the nine months, a significant increase from $0.50 and $1.33 respectively in the prior year.
- 3The effective income tax rate decreased substantially to 27.2% for the quarter and 25.9% for the nine months, primarily due to the 2017 U.S. Tax Act reducing the federal corporate tax rate.
- 4The company incurred a non-cash pension settlement charge of $36.1 million in the third quarter related to the annuitization of pension obligations.
- 5Cost of sales, including buying and occupancy costs, as a percentage of net sales increased slightly, impacted by higher freight and supply chain costs, as well as inventory hedges.
- 6TJX returned approximately $841 million to shareholders in the third quarter through share repurchases ($0.6 billion) and dividends ($0.2 billion).
- 7Inventory levels increased year-over-year, with consolidated average per store inventories up 9% on a reported basis, indicating a build-up for anticipated demand.