10-QPeriod: Q2 FY2022

TJX COMPANIES INC /DE/ Quarterly Report for Q2 Ended Jul 31, 2021

Filed August 27, 2021For Securities:TJX

Summary

The TJX Companies Inc. reported a strong rebound in the second quarter of fiscal year 2022, with net sales reaching $12.1 billion, a significant increase of 81% compared to the same period in fiscal year 2021. This growth was primarily driven by the easing of COVID-19 related store closures, which had heavily impacted the prior year's results. Despite a notable pre-tax loss on early debt extinguishment of $242 million, the company achieved a diluted earnings per share of $0.64, a substantial improvement from the $(0.18) loss in the prior year's quarter. The company also highlighted increased merchandise inventories, up 36% year-over-year, which may support future sales but also presents a potential working capital consideration. Financially, TJX demonstrated a healthy operating cash flow of $947 million for the first six months of fiscal 2022, a significant improvement from $197 million in the prior year. The company also returned $614 million to shareholders through share repurchases and dividends in the second quarter. Management emphasized a strategic approach to managing debt, including the redemption of substantial notes, and maintained a strong liquidity position with $7.1 billion in cash and cash equivalents at the end of the quarter. The company is also focused on future growth, planning significant capital investments and the launch of e-commerce for HomeGoods in the upcoming quarter.

Financial Highlights

48 data points
Beta

Revenue

$12.08B

29.4% Gross Margin

Net Income

$785.68M

6.5% Net Margin

EPS (Diluted)

$0.64

Total Assets

$28.78B

Cash & Equivalents

$7.11B

Free Cash Flow

$1.16B

Financial Statements
Beta
Revenue$12.08B
Cost of Revenue$8.53B
Gross Profit$3.55B
SG&A Expenses$2.22B
Net Income$785.68M
EPS (Basic)$0.65
EPS (Diluted)$0.64
Shares Outstanding (Basic)1.21B
Shares Outstanding (Diluted)1.22B

Key Highlights

  • 1Net sales surged by 81% to $12.1 billion in Q2 FY2022, driven by the reopening of stores after COVID-19 related closures in the prior year.
  • 2Diluted Earnings Per Share (EPS) recovered to $0.64, a significant improvement from a loss of $(0.18) in Q2 FY2021.
  • 3A significant pre-tax charge of $242 million was recorded for the early extinguishment of debt.
  • 4Merchandise inventories increased by 36% year-over-year, suggesting a robust stock to meet potential demand but also increasing working capital.
  • 5Operating cash flow saw a substantial improvement, reaching $947 million for the first six months of FY2022, up from $197 million in the prior year.
  • 6The company returned $614 million to shareholders via share repurchases and dividends in Q2 FY2022.
  • 7TJX maintained a strong liquidity position with $7.1 billion in cash and cash equivalents as of July 31, 2021.

Frequently Asked Questions

TJX experienced a significant rebound in the second quarter of fiscal year 2022. Net sales increased by 81% to $12.1 billion compared to $6.7 billion in the prior year's quarter. This was largely due to the easing of COVID-19 related store closures, which had heavily impacted the prior year. Diluted EPS also recovered to $0.64 from a loss of $(0.18) in the prior year's quarter.

TJX recorded a pre-tax charge of $242 million in the second quarter of fiscal year 2022 related to the early extinguishment of $2 billion in debt. This charge reduced pre-tax margin by 2.0 percentage points and diluted EPS by $0.15 for the quarter.

Merchandise inventories increased by 36% year-over-year to $5.1 billion as of July 31, 2021. This increase in inventory levels, compared to the prior year which was impacted by store closures, may position the company to meet anticipated customer demand but also represents an increase in working capital.

TJX maintained a strong liquidity position with $7.1 billion in cash and cash equivalents as of July 31, 2021. Operating cash flow for the first six months of fiscal 2022 was $947 million, a significant improvement from $197 million in the same period of fiscal 2021, reflecting the recovery in operations.