10-QPeriod: Q3 FY2022

TJX COMPANIES INC /DE/ Quarterly Report for Q3 Ended Oct 30, 2021

Filed November 30, 2021For Securities:TJX

Summary

TJX Companies Inc. reported strong financial results for the thirteen and thirty-nine weeks ended October 30, 2021, demonstrating a significant recovery and growth compared to the prior year, which was heavily impacted by the COVID-19 pandemic. Net sales for the third quarter reached $12.5 billion, a substantial increase from $10.1 billion in the same period last year, and year-to-date sales were $34.7 billion, up from $21.2 billion. This growth was driven by increased customer traffic and a larger average basket size across its segments, particularly in the U.S. Marmaxx and HomeGoods divisions. The company's profitability also saw marked improvement. Diluted earnings per share for the third quarter were $0.84, up from $0.71 in the prior year. Net income for the nine-month period was $2.3 billion, a dramatic turnaround from a net loss of $0.2 billion in the same period last year. This performance reflects effective cost management, improved merchandise margins, and the company's ability to navigate ongoing pandemic-related challenges, including temporary store closures in some international markets. TJX continues to return value to shareholders, repurchasing approximately $1.1 billion in stock and paying dividends during the nine-month period.

Financial Highlights

48 data points
Beta

Revenue

$12.53B

29.5% Gross Margin

Net Income

$1.02B

8.2% Net Margin

EPS (Diluted)

$0.84

Total Assets

$30.07B

Cash & Equivalents

$6.79B

Free Cash Flow

$729.46M

Financial Statements
Beta
Revenue$12.53B
Cost of Revenue$8.84B
Gross Profit$3.70B
SG&A Expenses$2.30B
Net Income$1.02B
EPS (Basic)$0.85
EPS (Diluted)$0.84
Shares Outstanding (Basic)1.20B
Shares Outstanding (Diluted)1.22B

Key Highlights

  • 1Net sales for the third quarter increased by 24% to $12.5 billion compared to $10.1 billion in the prior year's quarter.
  • 2Diluted earnings per share for the third quarter rose to $0.84 from $0.71 in the comparable prior year period.
  • 3Year-to-date net income was $2.34 billion, a significant improvement from a net loss of $0.24 billion in the same period last year.
  • 4The company reported a robust increase in merchandise inventories, up 33% year-over-year, indicating strong stock for the holiday season and beyond.
  • 5TJX returned $1.1 billion to shareholders through share repurchases and dividends in the first nine months of the fiscal year.
  • 6Despite ongoing pandemic impacts, particularly in international markets, the U.S. segments (Marmaxx and HomeGoods) showed strong performance, with Marmaxx segment profit increasing significantly to $990 million and HomeGoods segment profit at $263 million for the quarter.
  • 7The company's liquidity remains strong, with $6.8 billion in cash and cash equivalents as of October 30, 2021, and an available $1.5 billion revolving credit facility.

Frequently Asked Questions

TJX Companies demonstrated strong sales growth, with third-quarter net sales of $12.5 billion, a 24% increase from $10.1 billion in Q3 fiscal 2021. Compared to pre-pandemic Q3 fiscal 2020 ($10.5 billion), sales were up 20%. For the first nine months, net sales were $34.7 billion, a 64% increase from $21.2 billion in fiscal 2021 and an 18% increase from $29.5 billion in fiscal 2020, indicating a strong recovery and growth trajectory.

Profitability significantly improved. Diluted EPS for Q3 fiscal 2022 was $0.84, up from $0.71 in Q3 fiscal 2021. Net income for the nine months reached $2.34 billion, a substantial turnaround from a net loss of $0.24 billion in the prior year. This improvement is attributed to higher sales volumes, better merchandise margins, improved markon, and effective cost management, partially offset by increased freight and supply chain costs.

Consolidated merchandise inventories increased by 33% year-over-year to $6.6 billion as of October 30, 2021, suggesting the company is well-stocked. However, cost of sales, including buying and occupancy costs, increased due to higher supply chain and freight costs, which the company expects to continue. TJX is investing in distribution capacity and wages, while managing merchandise margins through markdowns and markon strategies.

TJX is actively returning capital to shareholders. In the first nine months of fiscal 2022, the company repurchased approximately $1.1 billion of its stock and paid $0.9 billion in dividends. The company plans to repurchase an additional $1.75 billion to $2 billion of stock in fiscal 2022 and has approximately $1.9 billion remaining under its authorized stock repurchase programs. Quarterly dividends of $0.26 per share were declared for fiscal 2022.