- Q1 FY24 pretax profit margin was 10.3%, well above the
Company’s plan
- Q1 FY24 diluted earnings per share were $.76, well above the
Company’s plan
- Q1 FY24 overall comp store sales increased 3%, at the
high-end of the Company’s plan, driven by an increase in customer
traffic
- Q1 FY24 comp store sales at Marmaxx increased 5%, driven by
very strong sales in apparel and accessories categories
- Returned $841 million to shareholders in Q1 FY24 through
share repurchases and dividends
- Increases FY24 pretax profit margin and earnings per share
guidance
The TJX Companies, Inc. (NYSE: TJX), the leading off-price
apparel and home fashions retailer in the U.S. and worldwide, today
announced sales and operating results for the first quarter ended
April 29, 2023. Net sales for the first quarter of Fiscal 2024 were
$11.8 billion, an increase of 3% versus the first quarter of Fiscal
2023. Overall comp store sales increased 3%. Net income for the
first quarter of Fiscal 2024 was $891 million and diluted earnings
per share were $.76, up 55% versus $.49 in the first quarter of
Fiscal 2023. First quarter Fiscal 2024 diluted earnings per share
were up 12% versus last year’s first quarter adjusted diluted
earnings per share of $.68, which excluded a $.19 charge related to
a write-down of the Company’s minority investment in Familia.
CEO and President
Comments
Ernie Herrman, Chief Executive Officer and President of The TJX
Companies, Inc., stated, “I am very pleased with our first quarter
performance. Our pretax profit margin and earnings per share both
significantly exceeded our plan and our 3% comparable store sales
increase was at the high end of our plan. Our comp sales growth was
driven by an increase in overall customer traffic and a 5% comp
sales increase at Marmaxx, our largest division. HomeGoods’ comp
sales were down following extraordinary growth during the pandemic.
TJX Canada and TJX International both delivered comp sales growth
and customer traffic increases. With our above-plan profit
performance we are raising our full-year guidance for both pretax
profit margin and earnings per share. The strength and flexibility
of our off-price business model, depth of our organization’s
expertise, and our wide demographic reach all give me great
confidence in our ability to continue to succeed in today’s retail
environment. Every day, our global organization is focused on
bringing customers around the world excellent values on great
fashions and great brands and an exciting, treasure-hunt shopping
experience. We are pleased that the second quarter is off to a good
start and we are seeing phenomenal off-price buying opportunities
in the marketplace. We are set up extremely well to continue
shipping fresh and compelling merchandise to our stores and online
throughout the spring and summer. Going forward, I am confident
that we have significant opportunities to grow sales, drive
customer traffic, capture market share, and improve the
profitability of our company.”
Comparable Store Sales (FY2024 and
FY2023) and Open-Only Comparable Store Sales
(FY2022)
The Company’s comparable store sales by division in the first
quarter of Fiscal 2024 and Fiscal 2023, and open-only comparable
store sales by division in the first quarter of Fiscal 2022 were as
follows:
First Quarter FY2024
Comparable Store Sales1
First Quarter FY2023
U.S. Comparable Store Sales1
First Quarter
FY2022 Open-Only Comparable Store Sales1,2
Marmaxx (U.S.)3
+5%
+3%
+12%
HomeGoods (U.S.)4
-7%
-7%
+40%
TJX Canada
+1%
N.A.
+9%
TJX International (Europe &
Australia)
+4%
N.A.
+11%
TJX
+3%
N.A.
+16%
1Comparable store sales exclude e-commerce
sites (tjmaxx.com, marshalls.com, homegoods.com, sierra.com, and
tkmaxx.com). 2This measure reports the sales increase or decrease
of stores classified as comp stores at the beginning of Fiscal 2021
for the days they were open in the first quarter of Fiscal 2022
against sales of those stores for the same days in Fiscal 2020,
prior to the emergence of the COVID-19 global pandemic.
3Combination of Marmaxx (T.J. Maxx and Marshalls) stores and Sierra
stores. 4Combination of HomeGoods and Homesense stores.
Net Sales by Division
The Company’s net sales by division in the first quarter of
Fiscal 2024 and Fiscal 2023 were as follows:
First Quarter Net Sales ($
in millions)1,2
First Quarter FY2024
Reported Sales Growth
First Quarter FY2024 Sales
Growth on a Constant Currency Basis3
FY2024
FY2023
Marmaxx (U.S.)4
$7,366
$6,871
+7%
N.A.
HomeGoods (U.S.)5
$1,966
$2,036
-3%
N.A.
TJX Canada
$1,038
$1,082
-4%
+3%
TJX International (Europe &
Australia)6
$1,413
$1,417
0%
+5%
TJX
$11,783
$11,406
+3%
+5%
1Net sales in TJX Canada and TJX
International include the impact of foreign currency exchange
rates. 2Figures may not foot due to rounding. 3Reflects net sales
adjusted for the impact of foreign currency; see Impact of Foreign
Currency Exchange Rates, below. 4Combination of T.J. Maxx and
Marshalls stores and tjmaxx.com and marshalls.com, as well as
Sierra stores and sierra.com. 5Combination of HomeGoods and
Homesense stores, and homegoods.com. 6Combination of T.K. Maxx and
Homesense stores and tkmaxx.com.
Margins
For the first quarter of Fiscal 2024, the Company’s pretax
profit margin was 10.3%, well above the Company’s plan and above
last year’s first quarter pretax profit margin of 7.5%. First
quarter Fiscal 2024 pretax profit margin was up 0.9 percentage
points versus last year’s first quarter adjusted pretax profit
margin of 9.4%, which excluded a 1.9 percentage point negative
impact from a charge related to a write-down of the Company’s
minority investment in Familia. The Company’s above plan pretax
profit margin was primarily driven by a larger than expected
benefit from freight as well as the timing of some expenses.
Gross profit margin for the first quarter of Fiscal 2024 was
28.9%, a 1.0 percentage point increase versus the first quarter of
Fiscal 2023. Merchandise margin increased and was driven by a
significant benefit from lower freight costs and strong markon from
better buying. Selling, general and administrative (SG&A) costs
as a percent of sales for the first quarter of Fiscal 2024 were
19.0%, a 0.6 percentage point increase versus the first quarter of
Fiscal 2023. Net interest income benefitted first quarter Fiscal
2024 pretax profit margin by 0.5 percentage points versus the prior
year.
Impact of Foreign Currency Exchange
Rates
Changes in foreign currency exchange rates affect the
translation of sales and earnings of the Company’s international
businesses into U.S. dollars for financial reporting purposes. In
addition, ordinary course, inventory-related hedging instruments
are marked to market at the end of each quarter. Changes in
currency exchange rates can have a material effect on the magnitude
of these translations and adjustments when there is significant
volatility in currency exchange rates. Given the global operations
of the Company, to facilitate comparability, the Company has
provided sales growth and inventory on a constant currency basis,
which assumes a constant exchange rate between periods for
translation based on the rate in effect for the prior period.
The movement in foreign currency exchange rates had a 1.3
percentage point negative impact on the Company’s net sales growth
in the first quarter of Fiscal 2024 versus the prior year. The
overall net impact of foreign currency exchange rates had a neutral
impact on first quarter Fiscal 2024 diluted earnings per share.
A table detailing the impact of foreign currency on TJX’s pretax
earnings and margins, as well as those of its international
businesses, can be found in the Investors section of TJX.com.
The foreign currency exchange rate impact to earnings per share
does not include the impact currency exchange rates have on various
transactions, which the Company refers to as “transactional foreign
exchange.”
Inventory
Total inventories as of April 29, 2023 were $6.4 billion,
compared to $7.0 billion at the end of the first quarter of Fiscal
2023. As a reminder, total inventories in the first quarter of
Fiscal 2023 were elevated primarily due to a larger in-transit
balance as a result of supply chain delays. Consolidated
inventories on a per-store basis as of April 29, 2023, including
distribution centers, but excluding inventory in transit, the
Company’s e-commerce sites, and Sierra stores, were down 5% on a
reported basis (with inventory on a constant currency basis down
4%, which reflects inventory adjusted for the impact of foreign
currency exchange rates, as described above). The Company is
confident it is well-positioned to take advantage of the
outstanding availability of quality, branded merchandise in the
marketplace and flow fresh merchandise to its stores and online
throughout the spring and summer.
Cash and Shareholder
Distributions
For the first quarter of Fiscal 2024, the Company generated $745
million of operating cash flow and ended the quarter with $5.0
billion of cash.
During the first quarter of Fiscal 2024, the Company returned
$841 million to shareholders. The Company repurchased a total of
$500 million of TJX stock, retiring 6.5 million shares, and paid
$341 million in shareholder dividends during the quarter. The
Company continues to expect to repurchase approximately $2.0 to
$2.5 billion of TJX stock during the fiscal year ending February 3,
2024. The Company may adjust this amount up or down depending on
various factors. In addition, the Company increased its dividend by
13% in the first quarter of Fiscal 2024. The Company remains
committed to returning cash to its shareholders while continuing to
invest in the business to support the near- and long-term growth of
TJX.
Pension Payout Offer
The Company will be offering eligible, former TJX Associates who
have not yet commenced their pension benefit an opportunity to
receive a voluntary lump sum payout of their vested pension plan
benefit. As a result, the Company anticipates a non-cash settlement
charge, which may negatively impact Fiscal 2024 earnings per share
by approximately $.01 to $.02. Any actual settlement charge may be
higher or lower depending on participation rates and other factors.
This potential non-cash settlement charge is expected to be
incurred in the third quarter of Fiscal 2024 and would impact the
Company’s pretax profit margin and earnings per share results. The
potential impact of this pension payout offer is not included in
the Company’s Fiscal 2024 outlook below. The Company expects to
exclude the impact of this potential charge from the Company’s
Fiscal 2024 adjusted pretax profit margin and adjusted earnings per
share results.
Second Quarter and Full Year Fiscal
2024 Outlook
For the second quarter of Fiscal 2024, the Company is planning
overall comparable store sales to be up 2% to 3%. For the second
quarter of Fiscal 2024, the Company expects pretax profit margin to
be in the range of 9.3% to 9.5% and diluted earnings per share to
be in the range of $.72 to $.75.
For the fiscal year ending February 3, 2024, the Company
continues to plan overall comparable store sales to be up 2% to 3%.
For the 53-week fiscal year ending February 3, 2024, the Company is
increasing its expectations for pretax profit margin to a range of
10.3% to 10.5% and diluted earnings per share to be in the range of
$3.49 to $3.58. The Company’s full-year guidance includes an
expected pretax margin benefit of approximately 0.1 percentage
point and a diluted earnings per share benefit of approximately
$.10 due to the 53rd week in the Company’s Fiscal 2024 calendar.
Excluding these expected benefits, the Company now expects
full-year Fiscal 2024 adjusted pretax profit margin to be in the
range of 10.2% to 10.4% and adjusted diluted earnings per share to
be in the range of $3.39 to $3.48.
Stores by Concept
During the first quarter ended April 29, 2023, the Company
increased its store count by 30 stores to a total of 4,865 stores
and increased square footage by 0.5% versus the prior quarter.
Store Locations1
Gross Square Feet2
First Quarter FY2024
First Quarter FY2024
(in millions)
Beginning
End
Beginning
End
In the U.S.:
T.J. Maxx
1,299
1,304
35.3
35.4
Marshalls
1,183
1,189
33.4
33.5
HomeGoods
894
901
20.8
20.9
Sierra
78
81
1.6
1.7
Homesense
46
49
1.2
1.3
In Canada:
Winners
297
298
8.1
8.1
HomeSense
151
152
3.5
3.5
Marshalls
106
106
2.8
2.8
In Europe:
T.K. Maxx
629
632
17.6
17.6
Homesense
78
78
1.5
1.5
In Australia:
T.K. Maxx
74
75
1.6
1.6
TJX
4,835
4,865
127.4
128.0
1Store counts above include both banners
within a combo or a superstore.
2Square feet figures may not foot due to
rounding.
Comparable Store Sales
For Fiscal 2023 and 2024, the Company returned to its historical
definition of comparable store sales. However, while stores in the
U.S. were open for all of Fiscal 2022, a significant number of
stores in TJX Canada and TJX International (Europe and Australia)
experienced COVID-related temporary store closures and
government-mandated shopping restrictions during Fiscal 2022.
Therefore, in Fiscal 2023, the Company could not measure
year-over-year comparable store sales with Fiscal 2022 in these
geographies in a meaningful way. As a result, the comparable stores
included in the Fiscal 2023 measure consisted of U.S. stores only,
which, for clarity, the Company referred to as U.S. comparable
store sales and are calculated against sales for the comparable
periods in Fiscal 2022. For Fiscal 2022, due to the temporary
closing of stores as a result of the COVID-19 global pandemic, the
Company reported open-only comparable store sales. This measure
reported the sales increase or decrease of stores initially
classified as comp stores at the beginning of Fiscal 2021 for the
days they were open in Fiscal 2022 against sales of those stores
for the same days in Fiscal 2020.
About The TJX Companies,
Inc.
The TJX Companies, Inc. is the leading off-price retailer of
apparel and home fashions in the U.S. and worldwide. As of April
29, 2023, the end of the Company’s first quarter, the Company
operated a total of 4,865 stores in nine countries, the United
States, Canada, the United Kingdom, Ireland, Germany, Poland,
Austria, the Netherlands, and Australia, and five e-commerce sites.
These include 1,304 T.J. Maxx, 1,189 Marshalls, 901 HomeGoods, 81
Sierra, and 49 Homesense stores, as well as tjmaxx.com,
marshalls.com, homegoods.com, and sierra.com, in the United States;
298 Winners, 152 HomeSense, and 106 Marshalls stores in Canada; 632
T.K. Maxx and 78 Homesense stores, as well as tkmaxx.com, in
Europe; and 75 T.K. Maxx stores in Australia. TJX’s press releases
and financial information are available at TJX.com.
First Quarter Fiscal 2024 Earnings
Conference Call
At 11:00 a.m. ET today, Ernie Herrman, Chief Executive Officer
and President of TJX, will hold a conference call to discuss the
Company’s first quarter Fiscal 2024 results, operations, and
business trends. A real-time webcast of the call will be available
to the public at TJX.com. A replay of the call will also be
available by dialing (866) 367-5577 (toll free) or (203) 369-0233
through Tuesday, May 23, 2023, or at TJX.com.
Non-GAAP Financial
Information
The Company has used non-GAAP financial measures in this press
release. Non-GAAP financial measures refer to financial information
adjusted to exclude or include, as applicable, from financial
measures prepared in accordance with accounting principles
generally accepted in the United States (GAAP), items identified in
this press release. Non-GAAP financial measures used in this press
release include sales growth on a constant currency basis,
inventory on a constant currency basis, adjusted pretax profit
margin, and adjusted diluted earnings per share. The Company
believes that the presentation of adjusted financial measures is
useful to investors as it provides additional information on
comparisons between periods by excluding certain items that affect
overall comparability. The Company uses these non-GAAP financial
measures for business planning purposes, to consider underlying
trends of its business, and in measuring its performance relative
to others in the market, and believes presenting these measures
also provides information to investors and others for understanding
and evaluating trends in the Company’s operating results or
measuring performance in the same manner as the Company’s
management. Non-GAAP financial measures should be considered in
addition to, and not as an alternative for, the Company’s reported
results prepared in accordance with GAAP. The use of these non-GAAP
financial measures may differ from similar measures reported by
other companies and may not be comparable to other similarly titled
measures.
Important Information at
Website
Archived versions of the Company’s conference calls are
available in the Investors section of TJX.com after they are no
longer available by telephone, as are reconciliations of non-GAAP
financial measures to GAAP financial measures and other financial
information. The Company routinely posts information that may be
important to investors in the Investors section at TJX.com. The
Company encourages investors to consult that section of its website
regularly.
Forward-looking
Statement
Various statements made in this release are forward-looking, and
are inherently subject to a number of risks and uncertainties. All
statements that address activities, events or developments that we
intend, expect or believe may occur in the future are
forward-looking statements, including, among others, statements
regarding the Company’s anticipated operating and financial
performance, business plans and prospects, dividends and share
repurchases, the Company’s plans related to and expected impact of
a pension payout offer, and second quarter and Fiscal 2024 outlook.
These statements are typically accompanied by the words “aim,”
“anticipate,” “aspire,” “believe,” “continue,” “could,” “should,”
“estimate,” “expect,” “forecast,” “goal,” “hope,” “intend,” “may,”
“plan,” “project,” “potential,” “seek,” “strive,” “target,” “will,”
“would,” or similar words, although not all forward-looking
statements contain these identifying words. Each forward-looking
statement is subject to risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements. Applicable risks and
uncertainties include, among others, execution of buying strategy
and inventory management; customer trends and preferences;
competition; various marketing efforts; operational and business
expansion; management of large size and scale; the ongoing COVID-19
pandemic and associated containment and remediation efforts;
merchandise sourcing and transport; data security and maintenance
and development of information technology systems; labor costs and
workforce challenges; personnel recruitment, training and
retention; corporate and retail banner reputation; evolving
corporate governance and public disclosure regulations and
expectations with respect to environmental, social and governance
matters; expanding international operations; fluctuations in
quarterly operating results and market expectations; inventory or
asset loss; cash flow; mergers, acquisitions, or business
investments and divestitures, closings or business consolidations;
real estate activities; economic conditions and consumer spending;
market instability; severe weather, serious disruptions or
catastrophic events; disproportionate impact of disruptions in the
second half of the fiscal year; commodity availability and pricing;
fluctuations in currency exchange rates; compliance with laws,
regulations and orders and changes in laws, regulations and
applicable accounting standards; outcomes of litigation, legal
proceedings and other legal or regulatory matters; quality, safety
and other issues with our merchandise; tax matters; and other
factors that may be described in our filings with the Securities
and Exchange Commission (the “SEC”), including our most recent
Annual Report on Form 10-K filed with the SEC. You are encouraged
to read our filings with the SEC, available at www.sec.gov, for a
discussion of these and other risks and uncertainties. We caution
investors, potential investors and others not to place considerable
reliance on the forward-looking statements contained in this
release. The forward-looking statements in this release speak only
as of the date of this release, and we do not undertake any
obligation to publicly update or revise our forward-looking
statements, even if experience or future changes make it clear that
any projected results expressed or implied in such statements will
not be realized.
The TJX Companies, Inc. and
Consolidated Subsidiaries
Financial Summary
(Unaudited)
(In Millions Except Per Share
Amounts)
Thirteen Weeks Ended
April 29, 2023
April 30, 2022
Net sales
$
11,783
$
11,406
Cost of sales, including buying and
occupancy costs
8,374
8,223
Selling, general and administrative
expenses
2,238
2,094
Impairment on equity investment
—
218
Interest (income) expense, net
(37
)
19
Income before income taxes
1,208
852
Provision for income taxes
317
265
Net income
$
891
$
587
Diluted earnings per share
$
0.76
$
0.49
Cash dividends declared per share
$
0.3325
$
0.295
Weighted average common shares –
diluted
1,165
1,189
The TJX Companies, Inc. and
Consolidated Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)
April 29, 2023
April 30, 2022
Assets:
Current assets:
Cash and cash equivalents
$
5,025
$
4,295
Accounts receivable and other current
assets
1,129
1,195
Merchandise inventories
6,441
6,990
Total current assets
12,595
12,480
Net property at cost
5,899
5,289
Operating lease right of use assets
9,177
9,067
Goodwill
95
97
Other assets
915
777
Total assets
$
28,681
$
27,710
Liabilities and shareholders' equity:
Current liabilities:
Accounts payable
$
4,304
$
4,371
Accrued expenses and other current
liabilities
4,121
4,072
Current portion of operating lease
liabilities
1,609
1,576
Current portion of long-term debt
500
—
Total current liabilities
10,534
10,019
Other long-term liabilities
865
909
Non-current deferred income taxes, net
133
54
Long-term operating lease liabilities
7,867
7,777
Long-term debt
2,860
3,356
Shareholders’ equity
6,422
5,595
Total liabilities and shareholders'
equity
$
28,681
$
27,710
The TJX Companies, Inc. and
Consolidated Subsidiaries
Condensed Statements of Cash
Flows
(Unaudited)
(In Millions)
Thirteen Weeks Ended
April 29, 2023
April 30, 2022
Cash flows from operating activities:
Net income
$
891
$
587
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
232
220
Impairment on equity investment
—
218
Deferred income tax provision
16
12
Share-based compensation
34
27
Changes in assets and liabilities:
(Increase) in accounts receivable and
other assets
(37
)
(99
)
(Increase) in merchandise inventories
(624
)
(1,085
)
Decrease in income taxes recoverable
73
61
Increase (decrease) in accounts
payable
507
(53
)
(Decrease) in accrued expenses and other
liabilities
(364
)
(488
)
(Decrease) in net operating lease
liabilities
(1
)
(4
)
Other, net
18
(30
)
Net cash provided by (used in) operating
activities
745
(634
)
Cash flows from investing activities:
Property additions
(361
)
(314
)
Purchase of investments
(11
)
(16
)
Sales and maturities of investments
10
6
Net cash (used in) investing
activities
(362
)
(324
)
Cash flows from financing activities:
Payments for repurchase of common
stock
(492
)
(607
)
Cash dividends paid
(343
)
(309
)
Proceeds from issuance of common stock
28
18
Other
(30
)
(33
)
Net cash (used in) financing
activities
(837
)
(931
)
Effect of exchange rate changes on
cash
2
(43
)
Net (decrease) in cash and cash
equivalents
(452
)
(1,932
)
Cash and cash equivalents at beginning of
year
5,477
6,227
Cash and cash equivalents at end of
period
$
5,025
$
4,295
The TJX Companies, Inc. and
Consolidated Subsidiaries
Selected Information by Major
Business Segment
(Unaudited)
(In Millions)
Thirteen Weeks Ended
April 29, 2023
April 30, 2022
Net sales:
In the United States:
Marmaxx
$
7,366
$
6,871
HomeGoods
1,966
2,036
TJX Canada
1,038
1,082
TJX International
1,413
1,417
Total net sales
$
11,783
$
11,406
Segment profit:
In the United States:
Marmaxx
$
1,028
$
904
HomeGoods
144
122
TJX Canada
117
127
TJX International
38
13
Total segment profit
1,327
1,166
General corporate expense
156
77
Impairment on equity investment
—
218
Interest (income) expense, net
(37
)
19
Income before income taxes
$
1,208
$
852
The TJX Companies, Inc. and Consolidated
Subsidiaries Notes to Consolidated Condensed Statements
- During the first quarter ended April 29, 2023,
the Company returned over $0.8 billion to shareholders,
repurchasing and retiring 6.5 million shares of its common stock at
a cost of $0.5 billion on a "trade date" basis and paying $0.3
billion in shareholder dividends. In February 2023, the Company
announced that the Board of Directors had approved a new stock
repurchase program that authorized the repurchase of up to an
additional $2.0 billion of TJX common stock from time to time.
Under this program and a previously announced program, TJX had
approximately $3.0 billion available for repurchase as of April 29,
2023. TJX records the repurchase of its stock on a cash basis, and
the amounts reflected in the financial statements may vary from the
above amounts due to the timing of settlement of repurchases.
- During Fiscal 2023, the Company announced and
completed the divestiture of its minority investment in Familia. As
a result, the Company recorded an impairment charge of $218 million
in the first quarter of Fiscal 2023 representing the entire
carrying value of the investment. This charge had a $0.19 negative
impact on diluted earnings per share for the first quarter of
Fiscal 2023. Subsequently, the Company realized a $54 million tax
benefit when the Company completed the divestiture of this
investment during the third quarter of Fiscal 2023. Together, these
resulted in a net $0.14 negative impact on diluted earnings per
share for the fiscal year ended January 28, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230516005996/en/
The TJX Companies, Inc. Debra McConnell Global Communications
(508) 390-2323
TJX Companies (NYSE:TJX)
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