10-QPeriod: Q1 FY2023

TJX COMPANIES INC /DE/ Quarterly Report for Q1 Ended Apr 30, 2022

Filed May 27, 2022For Securities:TJX

Summary

TJX Companies Inc. reported a strong top-line performance in the first quarter of fiscal year 2023, with net sales increasing by 13% to $11.4 billion year-over-year. This growth was primarily driven by an increase in average basket size due to higher average ticket prices and a fully open store base, contrasting with COVID-19 related closures in the prior year. Despite the sales increase, diluted earnings per share (EPS) of $0.49 were impacted by a significant $218 million impairment charge related to the divestment of an equity investment in Familia, which reduced EPS by $0.19. Excluding this one-time charge, EPS would have been $0.68. The company saw robust sales growth in its international segments, with TJX International sales up 163% and TJX Canada sales up 41%, reflecting the normalization of store operations. However, the HomeGoods segment experienced a 5% decrease in net sales, with a 7% decline in comparable store sales, primarily due to lower customer traffic, although average ticket increased. Management remains focused on delivering value to customers and managing inventory levels, with consolidated average per store inventories up 35%. The company returned approximately $0.9 billion to shareholders through share repurchases and dividends during the quarter, underscoring a commitment to capital return.

Financial Highlights

47 data points
Beta

Revenue

$11.41B

27.9% Gross Margin

Net Income

$587.00M

5.1% Net Margin

EPS (Diluted)

$0.49

Total Assets

$27.71B

Cash & Equivalents

$4.29B

Free Cash Flow

-$948.00M

Financial Statements
Beta
Revenue$11.41B
Cost of Revenue$8.22B
Gross Profit$3.18B
SG&A Expenses$2.09B
Net Income$587.00M
EPS (Basic)$0.50
EPS (Diluted)$0.49
Shares Outstanding (Basic)1.18B
Shares Outstanding (Diluted)1.19B

Key Highlights

  • 1Net sales increased 13% to $11.4 billion, driven by higher average ticket and a fully open store base.
  • 2Diluted EPS of $0.49 was negatively impacted by a $218 million impairment charge on an equity investment, reducing EPS by $0.19.
  • 3TJX International (up 163%) and TJX Canada (up 41%) showed significant sales recovery due to the reopening of stores.
  • 4HomeGoods segment sales declined 5%, with comparable store sales down 7% due to reduced customer traffic, despite higher average ticket.
  • 5Consolidated average per store inventories increased by 35% on a reported basis.
  • 6The company returned $0.9 billion to shareholders via share repurchases ($0.6 billion) and dividends ($0.3 billion).

Frequently Asked Questions

The $218 million impairment charge relates to the divestment of an equity investment in Familia, an off-price retailer operating in Russia. This charge significantly impacted net income and diluted earnings per share (EPS). It reduced EPS by $0.19 in the first quarter of fiscal year 2023. Excluding this charge, the company's diluted EPS would have been $0.68 ($0.49 reported EPS + $0.19 impairment impact).

The Marmaxx segment (T.J. Maxx, Marshalls) saw a 3% increase in net sales, with segment profit margin improving to 13.2%. The TJX Canada segment experienced a strong 41% increase in net sales, with segment profit margin rising to 11.7%, benefiting from fully reopened stores. TJX International also showed a substantial 163% increase in net sales, with segment profit margin improving significantly to 0.9% from a loss last year. However, the HomeGoods segment reported a 5% decrease in net sales and a 7% decrease in comparable store sales, with segment profit margin falling to 6.0% from 11.7% due to lower customer traffic.

TJX's consolidated average per store inventories increased by 35% on a reported basis and 37% on a constant currency basis, reflecting proactive inventory management. For the full fiscal year 2023, the company anticipates capital spending of approximately $1.7 billion to $1.9 billion, primarily for investments in distribution centers, new stores, store improvements, and information systems, to be funded through cash flows from operations.

The company's long-term debt stood at approximately $3.4 billion as of April 30, 2022, a decrease from the previous year, largely due to debt paydowns. TJX demonstrated a commitment to returning capital to shareholders, with $0.9 billion returned in the first quarter of fiscal 2023 through $0.6 billion in share repurchases and $0.3 billion in dividend payments. The company also has approximately $3.2 billion available under its stock repurchase programs.