10-QPeriod: Q1 FY2022

TJX COMPANIES INC /DE/ Quarterly Report for Q1 Ended May 1, 2021

Filed May 28, 2021For Securities:TJX

Summary

TJX Companies reported a significant rebound in its first quarter of fiscal year 2022, with net sales surging by 129% to $10.1 billion compared to the same period in the prior year. This dramatic increase is primarily attributed to the easing of COVID-19 related store closures, particularly in the U.S., where stores remained open for the entire quarter, contrasting with the 50% closure rate experienced in Q1 FY21. The company also showed a strong recovery in profitability, reporting a net income of $533.9 million and diluted earnings per share of $0.44, a stark improvement from a net loss of $887.5 million and a loss per share of $(0.74) in the prior year's first quarter. Despite the strong top-line growth and profit recovery, certain international segments, particularly in Europe, continued to face challenges with ongoing store closures impacting net sales and segment results. The company demonstrated effective cost management, with the cost of sales and SG&A expenses as a percentage of net sales improving significantly compared to the prior year's quarter. TJX also proactively managed its balance sheet, redeeming $750 million in debt and signaling a return to shareholder-friendly actions by lifting the suspension on its stock repurchase program.

Financial Highlights

48 data points
Beta

Revenue

$10.09B

28.1% Gross Margin

Net Income

$533.93M

5.3% Net Margin

EPS (Diluted)

$0.44

Total Assets

$30.30B

Cash & Equivalents

$8.78B

Free Cash Flow

-$658.02M

Financial Statements
Beta
Revenue$10.09B
Cost of Revenue$7.26B
Gross Profit$2.83B
SG&A Expenses$2.06B
Net Income$533.93M
EPS (Basic)$0.44
EPS (Diluted)$0.44
Shares Outstanding (Basic)1.21B
Shares Outstanding (Diluted)1.22B

Key Highlights

  • 1Net sales dramatically increased by 129% to $10.1 billion in Q1 FY2022, recovering from a heavily impacted Q1 FY2021 due to COVID-19 store closures.
  • 2The company returned to profitability with a net income of $533.9 million and diluted EPS of $0.44, a significant turnaround from a net loss of $887.5 million in the prior year.
  • 3U.S. segments (Marmaxx and HomeGoods) showed strong performance, with net sales increasing by 146% and 182% respectively, driven by increased store open days.
  • 4Cost of sales and SG&A expenses as a percentage of net sales improved substantially year-over-year, indicating effective cost management and operational leverage.
  • 5TJX redeemed $750 million of debt in April 2021 and announced further debt reduction plans, alongside lifting the suspension of its stock repurchase program.
  • 6International segments (TJX Canada and TJX International) showed mixed results, with TJX Canada sales increasing by 102% while TJX International sales decreased by 6% due to ongoing COVID-19 related store closures.

Frequently Asked Questions

The primary driver for the substantial 129% increase in net sales to $10.1 billion in the first quarter of fiscal year 2022 was the easing of COVID-19 related store closures. Unlike the first quarter of fiscal year 2021, where stores were closed for approximately 50% of the period, stores in the U.S. remained open for the entire first quarter of fiscal year 2022, leading to a significant recovery in sales.

TJX experienced a significant turnaround in profitability. In Q1 FY2022, the company reported a net income of $533.9 million and diluted earnings per share of $0.44. This is a substantial improvement compared to the net loss of $887.5 million and diluted loss per share of $(0.74) recorded in the first quarter of fiscal year 2021, which was heavily impacted by the pandemic.

TJX is actively managing its debt and returning capital to shareholders. The company redeemed $750 million of debt in April 2021 and has announced plans to reduce debt further by approximately $2 billion. Furthermore, TJX has lifted the temporary suspension of its stock repurchase program, indicating confidence in its financial position and future performance.

The U.S. segments, Marmaxx and HomeGoods, demonstrated strong performance with significant year-over-year sales increases (146% and 182% respectively) due to increased store open days. However, the international segments showed more varied results. TJX Canada saw a 102% increase in net sales, benefiting from fewer store closures compared to the prior year. In contrast, TJX International experienced a 6% decrease in net sales, largely due to ongoing store closures, primarily in Europe.