☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
July 29, 2023
☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 04-2207613 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
770 Cochituate Road Framingham, Massachusetts | 01701 | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $1.00 per share | TJX | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||||||||
☐ | ||||||||||||||||||||
Emerging growth company | ☐ |
August 18, 2023: 1,144,080,554
Statements
Thirteen Weeks Ended | ||||||||
October 28, 2017 | October 29, 2016 | |||||||
Net sales | $ | 8,762,220 | $ | 8,291,688 | ||||
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Cost of sales, including buying and occupancy costs | 6,150,020 | 5,843,873 | ||||||
Selling, general and administrative expenses | 1,584,219 | 1,462,574 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 7,981 | 12,462 | ||||||
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Income before provision for income taxes | 1,020,000 | 889,833 | ||||||
Provision for income taxes | 378,564 | 340,047 | ||||||
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Net income | $ | 641,436 | $ | 549,786 | ||||
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Basic earnings per share: | ||||||||
Net income | $ | 1.01 | $ | 0.84 | ||||
Weighted average common shares – basic | 634,022 | 653,559 | ||||||
Diluted earnings per share: | ||||||||
Net income | $ | 1.00 | $ | 0.83 | ||||
Weighted average common shares – diluted | 642,881 | 661,721 | ||||||
Cash dividends declared per share | $ | 0.3125 | $ | 0.2600 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||
July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 | |||||||||||
Net sales | $ | 12,758 | $ | 11,843 | $ | 24,541 | $ | 23,249 | ||||||
Cost of sales, including buying and occupancy costs | 8,910 | 8,571 | 17,284 | 16,794 | ||||||||||
Selling, general and administrative expenses | 2,559 | 2,175 | 4,797 | 4,269 | ||||||||||
Impairment on equity investment | — | — | — | 218 | ||||||||||
Interest (income) expense, net | (38) | 11 | (75) | 30 | ||||||||||
Income before income taxes | 1,327 | 1,086 | 2,535 | 1,938 | ||||||||||
Provision for income taxes | 338 | 276 | 655 | 541 | ||||||||||
Net income | $ | 989 | $ | 810 | $ | 1,880 | $ | 1,397 | ||||||
Basic earnings per share | $ | 0.86 | $ | 0.69 | $ | 1.63 | $ | 1.19 | ||||||
Weighted average common shares – basic | 1,148 | 1,168 | 1,151 | 1,173 | ||||||||||
Diluted earnings per share | $ | 0.85 | $ | 0.69 | $ | 1.62 | $ | 1.18 | ||||||
Weighted average common shares – diluted | 1,161 | 1,178 | 1,163 | 1,184 |
2
Thirty-Nine Weeks Ended | ||||||||
October 28, 2017 | October 29, 2016 | |||||||
Net sales | $ | 24,903,944 | $ | 23,716,097 | ||||
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Cost of sales, including buying and occupancy costs | 17,652,767 | 16,778,977 | ||||||
Selling, general and administrative expenses | 4,479,470 | 4,190,872 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 27,499 | 33,918 | ||||||
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Income before provision for income taxes | 2,744,208 | 2,629,384 | ||||||
Provision for income taxes | 1,013,536 | 1,009,078 | ||||||
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Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
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Basic earnings per share: | ||||||||
Net income | $ | 2.71 | $ | 2.46 | ||||
Weighted average common shares – basic | 639,191 | 657,746 | ||||||
Diluted earnings per share: | ||||||||
Net income | $ | 2.67 | $ | 2.43 | ||||
Weighted average common shares – diluted | 648,672 | 666,632 | ||||||
Cash dividends declared per share | $ | 0.9375 | $ | 0.7800 |
MILLIONS
Thirteen Weeks Ended | ||||||||||||||
July 29, 2023 | July 30, 2022 | |||||||||||||
Net income | $ | 989 | $ | 810 | ||||||||||
Additions to other comprehensive income (loss): | ||||||||||||||
Foreign currency translation adjustments, net of related tax provisions of $1 in fiscal 2024 and $0.4 in fiscal 2023 | 40 | (30) | ||||||||||||
Reclassifications from other comprehensive income (loss) to net income: | ||||||||||||||
Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $0.1 in fiscal 2024 and $2 in fiscal 2023 | 1 | 4 | ||||||||||||
Other comprehensive income (loss), net of tax | 41 | (26) | ||||||||||||
Total comprehensive income | $ | 1,030 | $ | 784 |
Twenty-Six Weeks Ended | ||||||||
July 29, 2023 | July 30, 2022 | |||||||
Net income | $ | 1,880 | $ | 1,397 | ||||
Additions to other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments, net of related tax provision of $0.4 in fiscal 2024 and tax benefit of $0.2 in fiscal 2023 | 54 | (89) | ||||||
Reclassifications from other comprehensive income (loss) to net income: | ||||||||
Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $0.2 in fiscal 2024 and $3 in fiscal 2023 | 1 | 8 | ||||||
Other comprehensive income (loss), net of tax | 55 | (81) | ||||||
Total comprehensive income | $ | 1,935 | $ | 1,316 |
3
BALANCE SHEETS
Thirteen Weeks Ended | ||||||||
October 28, 2017 | October 29, 2016 | |||||||
Net income | $ | 641,436 | $ | 549,786 | ||||
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Additions to other comprehensive income: | ||||||||
Foreign currency translation adjustments, net of related tax benefits of $18,110 in fiscal 2018 and $14,123 in fiscal 2017 | (46,029 | ) | (94,590 | ) | ||||
Recognition of net (losses) on benefit obligations, net of related tax benefit of $47,051 in fiscal year 2017 | — | (71,525 | ) | |||||
Reclassifications from other comprehensive income to net income: | ||||||||
Pension settlement charge, net of related tax provision of $12,369 in fiscal 2017 | — | 18,804 | ||||||
Amortization of prior service cost and deferred gains, net of related tax provisions of $2,414 in fiscal 2018 and $3,462 in fiscal 2017 | 3,669 | 5,263 | ||||||
Amortization of loss on cash flow hedge, net of related tax provisions of $112 in fiscal 2018 and $112 in fiscal 2017 | 171 | 171 | ||||||
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Other comprehensive (loss), net of tax | (42,189 | ) | (141,877 | ) | ||||
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Total comprehensive income | $ | 599,247 | $ | 407,909 | ||||
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Thirty-Nine Weeks Ended | ||||||||
October 28, 2017 | October 29, 2016 | |||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
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Additions to other comprehensive income: | ||||||||
Foreign currency translation adjustments, net of related tax provision of $16,212 in fiscal 2018 and benefit of $17,241 in fiscal 2017 | 79,393 | (93,304 | ) | |||||
Recognition of net (losses) on benefit obligations, net of related tax benefit of $47,051 in fiscal year 2017 | — | (71,525 | ) | |||||
Reclassifications from other comprehensive income to net income: | ||||||||
Pension settlement charge, net of related tax provision of $12,369 in fiscal 2017 | — | 18,804 | ||||||
Amortization of prior service cost and deferred gains, net of related tax provisions of $7,500 in fiscal 2018 and $7,517 in fiscal 2017 | 11,401 | 11,427 | ||||||
Amortization of loss on cash flow hedge, net of related tax provisions of $337 in fiscal 2018 and $337 in fiscal 2017 | 513 | 513 | ||||||
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Other comprehensive income (loss), net of tax | 91,307 | (134,085 | ) | |||||
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Total comprehensive income | $ | 1,821,979 | $ | 1,486,221 | ||||
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MILLIONS, EXCEPT SHARE DATA
July 29, 2023 | January 28, 2023 | July 30, 2022 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 4,550 | $ | 5,477 | $ | 3,531 | |||||
Accounts receivable, net | 548 | 563 | 556 | ||||||||
Merchandise inventories | 6,585 | 5,819 | 7,083 | ||||||||
Prepaid expenses and other current assets | 507 | 478 | 553 | ||||||||
Federal, state and foreign income taxes recoverable | 148 | 119 | 112 | ||||||||
Total current assets | 12,338 | 12,456 | 11,835 | ||||||||
Net property at cost | 6,166 | 5,783 | 5,390 | ||||||||
Non-current deferred income taxes, net | 149 | 158 | 172 | ||||||||
Operating lease right of use assets | 9,406 | 9,086 | 8,987 | ||||||||
Goodwill | 95 | 97 | 97 | ||||||||
Other assets | 768 | 769 | 610 | ||||||||
Total assets | $ | 28,922 | $ | 28,349 | $ | 27,091 | |||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 4,438 | $ | 3,794 | $ | 4,085 | |||||
Accrued expenses and other current liabilities | 4,244 | 4,346 | 3,928 | ||||||||
Current portion of operating lease liabilities | 1,618 | 1,610 | 1,572 | ||||||||
Current portion of long-term debt | — | 500 | 500 | ||||||||
Federal, state and foreign income taxes payable | 17 | 55 | 62 | ||||||||
Total current liabilities | 10,317 | 10,305 | 10,147 | ||||||||
Other long-term liabilities | 915 | 919 | 917 | ||||||||
Non-current deferred income taxes, net | 132 | 127 | 67 | ||||||||
Long-term operating lease liabilities | 8,089 | 7,775 | 7,706 | ||||||||
Long-term debt | 2,861 | 2,859 | 2,857 | ||||||||
Commitments and contingencies (See Note K) | |||||||||||
Shareholders’ equity | |||||||||||
Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued | — | — | — | ||||||||
Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,144,948,031; 1,155,437,908 and 1,161,886,769 respectively | 1,145 | 1,155 | 1,162 | ||||||||
Additional paid-in capital | — | — | — | ||||||||
Accumulated other comprehensive (loss) income | (551) | (606) | (768) | ||||||||
Retained earnings | 6,014 | 5,815 | 5,003 | ||||||||
Total shareholders’ equity | 6,608 | 6,364 | 5,397 | ||||||||
Total liabilities and shareholders’ equity | $ | 28,922 | $ | 28,349 | $ | 27,091 |
4
STATEMENTS OF CASH FLOWS
October 28, 2017 | January 28, 2017 | October 29, 2016 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 2,364,244 | $ | 2,929,849 | $ | 2,375,532 | ||||||
Short-term investments | 511,618 | 543,242 | 450,804 | |||||||||
Accounts receivable, net | 345,866 | 258,831 | 306,426 | |||||||||
Merchandise inventories | 4,725,850 | 3,644,959 | 4,384,171 | |||||||||
Prepaid expenses and other current assets | 422,719 | 358,058 | 409,986 | |||||||||
Federal, state, and foreign income taxes recoverable | 19,737 | 15,835 | 15,415 | |||||||||
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Total current assets | 8,390,034 | 7,750,774 | 7,942,334 | |||||||||
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Net property at cost | 4,858,284 | 4,532,894 | 4,318,829 | |||||||||
Non-current deferred income taxes, net | 6,655 | 6,193 | 3,624 | |||||||||
Goodwill | 196,365 | 195,871 | 196,011 | |||||||||
Other assets | 426,357 | 398,076 | 406,038 | |||||||||
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TOTAL ASSETS | $ | 13,877,695 | $ | 12,883,808 | $ | 12,866,836 | ||||||
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LIABILITIES | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 2,986,374 | $ | 2,230,904 | $ | 2,686,845 | ||||||
Accrued expenses and other current liabilities | 2,361,422 | 2,320,464 | 2,155,587 | |||||||||
Federal, state and foreign income taxes payable | 120,185 | 206,288 | 52,082 | |||||||||
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Total current liabilities | 5,467,981 | 4,757,656 | 4,894,514 | |||||||||
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Other long-term liabilities | 1,159,975 | 1,073,954 | 1,098,491 | |||||||||
Non-current deferred income taxes, net | 374,276 | 314,000 | 317,107 | |||||||||
Long-term debt | 2,229,855 | 2,227,599 | 2,226,913 | |||||||||
Commitments and contingencies (See Note K) | ||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||
Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued | — | — | — | |||||||||
Common stock, authorized 1,200,000,000 shares, par value $1, issued and outstanding 632,302,505; 646,319,046 and 651,900,739 respectively | 632,303 | 646,319 | 651,901 | |||||||||
Additionalpaid-in capital | — | — | — | |||||||||
Accumulated other comprehensive (loss) | (602,919 | ) | (694,226 | ) | (801,557 | ) | ||||||
Retained earnings | 4,616,224 | 4,558,506 | 4,479,467 | |||||||||
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Total shareholders’ equity | 4,645,608 | 4,510,599 | 4,329,811 | |||||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 13,877,695 | $ | 12,883,808 | $ | 12,866,836 | ||||||
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MILLIONS
Twenty-Six Weeks Ended | |||||||||||
July 29, 2023 | July 30, 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 1,880 | $ | 1,397 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 467 | 438 | |||||||||
Impairment on equity investment | — | 218 | |||||||||
Loss on property disposals and impairment charges | 21 | 5 | |||||||||
Deferred income tax provision | 16 | 26 | |||||||||
Share-based compensation | 70 | 58 | |||||||||
Changes in assets and liabilities: | |||||||||||
Decrease (increase) in accounts receivable | 19 | (48) | |||||||||
(Increase) in merchandise inventories | (734) | (1,207) | |||||||||
(Increase) decrease in income taxes recoverable | (28) | 2 | |||||||||
(Increase) in prepaid expenses and other current assets | (34) | (50) | |||||||||
Increase (decrease) in accounts payable | 619 | (311) | |||||||||
(Decrease) in accrued expenses and other liabilities | (170) | (393) | |||||||||
(Decrease) in income taxes payable | (36) | (123) | |||||||||
Increase in net operating lease liabilities | 0 | 6 | |||||||||
Other, net | (4) | (12) | |||||||||
Net cash provided by operating activities | 2,086 | 6 | |||||||||
Cash flows from investing activities: | |||||||||||
Property additions | (820) | (693) | |||||||||
Purchases of investments | (17) | (21) | |||||||||
Sales and maturities of investments | 18 | 11 | |||||||||
Net cash (used in) investing activities | (819) | (703) | |||||||||
Cash flows from financing activities: | |||||||||||
Repayment of debt | (500) | — | |||||||||
Payments for repurchase of common stock | (1,041) | (1,307) | |||||||||
Cash dividends paid | (725) | (655) | |||||||||
Proceeds from issuance of common stock | 81 | 50 | |||||||||
Other | (29) | (33) | |||||||||
Net cash (used in) financing activities | (2,214) | (1,945) | |||||||||
Effect of exchange rate changes on cash | 20 | (54) | |||||||||
Net (decrease) in cash and cash equivalents | (927) | (2,696) | |||||||||
Cash and cash equivalents at beginning of year | 5,477 | 6,227 | |||||||||
Cash and cash equivalents at end of period | $ | 4,550 | $ | 3,531 |
5
SHAREHOLDERS’ EQUITY
Thirty-Nine Weeks Ended | ||||||||
October 28, 2017 | October 29, 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 532,424 | 492,395 | ||||||
Loss on property disposals and impairment charges | 2,209 | 1,648 | ||||||
Deferred income tax provision | 35,802 | 52,629 | ||||||
Share-based compensation | 77,152 | 77,380 | ||||||
Excess tax benefits from share-based compensation | — | (60,332 | ) | |||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Changes in assets and liabilities: | ||||||||
(Increase) in accounts receivable | (84,403 | ) | (72,487 | ) | ||||
(Increase) in merchandise inventories | (1,042,664 | ) | (758,601 | ) | ||||
(Increase) in taxes recoverable | (3,902 | ) | (4,356 | ) | ||||
(Increase) in prepaid expenses and other current assets | (50,357 | ) | (38,174 | ) | ||||
Increase in accounts payable | 733,340 | 524,981 | ||||||
Increase in accrued expenses and other liabilities | 83,082 | 232,910 | ||||||
(Decrease) in income taxes payable | (86,842 | ) | (19,000 | ) | ||||
Other | 2,910 | (19,986 | ) | |||||
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Net cash provided by operating activities | 1,929,423 | 2,112,259 | ||||||
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Cash flows from investing activities: | ||||||||
Property additions | (827,529 | ) | (767,197 | ) | ||||
Purchase of investments | (630,079 | ) | (533,807 | ) | ||||
Sales and maturities of investments | 658,225 | 432,046 | ||||||
Other | — | (2,324 | ) | |||||
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Net cash (used in) investing activities | (799,383 | ) | (871,282 | ) | ||||
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Cash flows from financing activities: | ||||||||
Proceeds from issuance of long-term debt | 992,540 | |||||||
Cash payments for extinguishment of debt | — | (425,584 | ) | |||||
Cash payments for repurchase of common stock | (1,238,982 | ) | (1,175,000 | ) | ||||
Cash payments for debt issuance expenses | (9,921 | ) | ||||||
Cash payment for rate lock agreement | — | (3,150 | ) | |||||
Proceeds from issuance of common stock | 89,198 | 110,902 | ||||||
Excess tax benefits from share-based compensation | — | 60,332 | ||||||
Cash dividends paid | (566,949 | ) | (481,859 | ) | ||||
Cash payments of employee tax withholdings for performance based stock awards | (16,823 | ) | (24,965 | ) | ||||
Other | (2,312 | ) | — | |||||
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Net cash (used in) financing activities | (1,735,868 | ) | (956,705 | ) | ||||
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Effect of exchange rate changes on cash | 40,223 | (4,213 | ) | |||||
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Net (decrease) increase in cash and cash equivalents | (565,605 | ) | 280,059 | |||||
Cash and cash equivalents at beginning of year | 2,929,849 | 2,095,473 | ||||||
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Cash and cash equivalents at end of period | $ | 2,364,244 | $ | 2,375,532 | ||||
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MILLIONS
Thirteen Weeks Ended | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Shares | Par Value $1 | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total | |||||||||||||||
Balance, April 29, 2023 | 1,150 | $ | 1,150 | $ | — | $ | (592) | $ | 5,864 | $ | 6,422 | |||||||||
Net income | — | — | — | — | 989 | 989 | ||||||||||||||
Other comprehensive income, net of tax | — | — | — | 41 | — | 41 | ||||||||||||||
Cash dividends declared on common stock | — | — | — | — | (381) | (381) | ||||||||||||||
Recognition of share-based compensation | — | — | 36 | — | — | 36 | ||||||||||||||
Issuance of common stock under stock incentive plan and related tax effect | 2 | 2 | 54 | — | (1) | 55 | ||||||||||||||
Common stock repurchased | (7) | (7) | (90) | — | (457) | (554) | ||||||||||||||
Balance, July 29, 2023 | 1,145 | $ | 1,145 | $ | — | $ | (551) | $ | 6,014 | $ | 6,608 |
Thirteen Weeks Ended | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Shares | Par Value $1 | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total | |||||||||||||||
Balance, April 30, 2022 | 1,173 | $ | 1,173 | $ | — | $ | (742) | $ | 5,164 | $ | 5,595 | |||||||||
Net income | — | — | — | — | 810 | 810 | ||||||||||||||
Other comprehensive (loss), net of tax | — | — | — | (26) | — | (26) | ||||||||||||||
Cash dividends declared on common stock | — | — | — | — | (343) | (343) | ||||||||||||||
Recognition of share-based compensation | — | — | 31 | — | — | 31 | ||||||||||||||
Issuance of common stock under stock incentive plan and related tax effect | 0 | 0 | 31 | — | (1) | 30 | ||||||||||||||
Common stock repurchased | (11) | (11) | (62) | — | (627) | (700) | ||||||||||||||
Balance, July 30, 2022 | 1,162 | $ | 1,162 | $ | — | $ | (768) | $ | 5,003 | $ | 5,397 |
6
Accumulated | ||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||
Shares | Par Value $1 | |||||||||||||||||||||||
Balance, January 28, 2017 | 646,319 | $ | 646,319 | $ | — | $ | (694,226 | ) | $ | 4,558,506 | $ | 4,510,599 | ||||||||||||
Net income | — | — | — | — | 1,730,672 | 1,730,672 | ||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | 91,307 | — | 91,307 | ||||||||||||||||||
Cash dividends declared on common stock | — | — | — | — | (597,595 | ) | (597,595 | ) | ||||||||||||||||
Recognition of share-based compensation | — | — | 77,152 | — | — | 77,152 | ||||||||||||||||||
Issuance of common stock under Stock Incentive Plan, net of shares used to pay tax withholdings | 2,726 | 2,726 | 69,729 | — | — | 72,455 | ||||||||||||||||||
Common stock repurchased and retired | (16,742 | ) | (16,742 | ) | (146,881 | ) | — | (1,075,359 | ) | (1,238,982 | ) | |||||||||||||
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Balance, October 28, 2017 | 632,303 | $ | 632,303 | $ | — | $ | (602,919 | ) | $ | 4,616,224 | $ | 4,645,608 | ||||||||||||
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MILLIONS
Twenty-Six Weeks Ended | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Shares | Par Value $1 | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total | |||||||||||||||
Balance, January 28, 2023 | 1,155 | $ | 1,155 | $ | — | $ | (606) | $ | 5,815 | $ | 6,364 | |||||||||
Net income | — | — | — | — | 1,880 | 1,880 | ||||||||||||||
Other comprehensive income, net of tax | — | — | — | 55 | — | 55 | ||||||||||||||
Cash dividends declared on common stock | — | — | — | — | (764) | (764) | ||||||||||||||
Recognition of share-based compensation | — | — | 70 | — | — | 70 | ||||||||||||||
Issuance of common stock under stock incentive plan and related tax effect | 3 | 3 | 51 | — | (1) | 53 | ||||||||||||||
Common stock repurchased and retired | (13) | (13) | (121) | — | (916) | (1,050) | ||||||||||||||
Balance, July 29, 2023 | 1,145 | $ | 1,145 | $ | — | $ | (551) | $ | 6,014 | $ | 6,608 |
Twenty-Six Weeks Ended | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Shares | Par Value $1 | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total | |||||||||||||||
Balance, January 29, 2022 | 1,181 | $ | 1,181 | $ | — | $ | (687) | $ | 5,509 | $ | 6,003 | |||||||||
Net income | 1,397 | 1,397 | ||||||||||||||||||
Other comprehensive (loss), net of tax | — | — | — | (81) | (81) | |||||||||||||||
Cash dividends declared on common stock | — | — | — | — | (690) | (690) | ||||||||||||||
Recognition of share-based compensation | — | — | 58 | — | — | 58 | ||||||||||||||
Issuance of common stock under stock incentive plan and related tax effect | 2 | 2 | 16 | — | (1) | 17 | ||||||||||||||
Common stock repurchased and retired | (21) | (21) | (74) | — | (1,212) | (1,307) | ||||||||||||||
Balance, July 30, 2022 | 1,162 | $ | 1,162 | $ | — | $ | (768) | $ | 5,003 | $ | 5,397 |
7
and Summary of Significant Accounting Policies
Fiscal 2025 will be a 52-week fiscal year and will end February 1, 2025.
In millions | July 29, 2023 | July 30, 2022 | ||||||
Balance, beginning of year | $ | 721 | $ | 685 | ||||
Deferred revenue | 858 | 852 | ||||||
Effect of exchange rates changes on deferred revenue | 1 | (3) | ||||||
Revenue recognized | (916) | (905) | ||||||
Balance, end of period | $ | 664 | $ | 629 |
Twenty-Six Weeks Ended | ||||||||
In millions | July 29, 2023 | July 30, 2022 | ||||||
Operating cash flows paid for operating leases | $ | 999 | $ | 972 | ||||
Lease liabilities arising from obtaining right of use assets | $ | 1,148 | $ | 1,151 |
Revenue Recognition
In May 2014,
8
impact on our financial condition or results of operations other than additional disclosure requirements. We plan to adopt this standard in the first quarter of the fiscal year ending February 2, 2019 under the modified retrospective approach, which will result in a cumulative adjustment to retained earnings. We continue to evaluate the impact this standard will have on our Consolidated Financial Statements and Notes thereto.
Leases
In February 2016, the FASB issued updated guidance on leases that aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosureAccounting Standards Codification are communicated through issuance of key information about leasing arrangements. The new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption is permitted and modified retrospective application is required.an Accounting Standards Update (“ASU”). The Company has established a cross-functional team to implementreviewed the updated leasenew guidance and is in the process of evaluating its lease portfolio and the impact this standard will have on our Consolidated Financial Statements and Notes thereto. The Company expects this standard to have a material impact on its statement of financial condition ashas determined that it will record a significant asset and liability associated with its more than 4,000 leased locations. The Company continueseither not apply to assess if the initial lease term will differ under the new standard versus current accounting practice. If the lease term remains unchanged, the income statement impact of the new standardTJX or is not expected to be material. We planmaterial to adopt this standard in the first quarter of the fiscal year ending February 1, 2020.
Cash Flows
In August 2016, a pronouncement was issued that addresses diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. The standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and earlyits Consolidated Financial Statements upon adoption, is permitted. TJX does not expect this standard to have a material impact on our consolidated financial statements.
Goodwill
In January 2017, the FASB issued updated guidance on goodwill that aims to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, goodwill impairment will be measured as the amount by which the carrying value exceeds the fair value. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. The new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods. Early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017. TJX does not expect the adoption of this standard to have a material impact on our consolidated financial statements.
Retirement Benefits
In March 2017, the FASB issued updated guidance related to retirement benefits, which requires that an employer report the service cost component of net periodic pension and net periodic post retirement cost in the same line item as other compensation costs arising from services rendered by the employees during the period. It also requires the other components of net periodic pension and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component is eligible for capitalization. This pronouncement is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. The amendments in this update should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We are currently evaluating the presentation of the other components of net benefit cost. The Company has not yet determined the timing for adoption or estimated the effect on the Company’s financial statements.
9
Hedging Activities
In August 2017, the FASB issued updated guidance on hedge accounting. The updates allow hedge accounting for new types of interest rate hedges of financial instruments and simplify documentation requirements to qualify for hedge accounting. In addition, any gain or loss from hedge ineffectiveness will be reported in the same income statement line with the effective hedge results and the hedged transaction. The updated guidance is effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet determined the timing for adoption or estimated the effect on the Company’s financial statements.
Recently Adopted Accounting Standards
Share Based Compensation
In the first quarter of 2017, TJX adopted a pronouncement that aims to simplify several aspects of accounting and reporting for share-based payment transactions. One provision within this pronouncement requires that excess income tax benefits and tax deficiencies related to share-based payments be recognized within income tax expense in the statement of income, rather than within additionalpaid-in capital on the balance sheet. The adoption of this provision is to be applied prospectively. The impact to TJX’s results of operations related to this provision for the three and nine months ended October 28, 2017 was a decrease in the provision for income taxes of $12.6 million and $40.5 million, respectively. The impact of this benefit on TJX’s future results of operations will depend in part on the market prices for TJX’s shares on the dates there are taxable events related to share awards, and, therefore, the impactguidance is difficult to predict. The remaining provisions within the pronouncement did not have a material impact on our consolidated financial statements.
disclosed.
In thousands | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
Land and buildings | $ | 1,294,992 | $ | 1,247,585 | $ | 1,118,739 | ||||||
Leasehold costs and improvements | 3,145,922 | 2,884,054 | 2,811,515 | |||||||||
Furniture, fixtures and equipment | 5,172,488 | 4,871,764 | 4,725,863 | |||||||||
|
|
|
|
|
| |||||||
Total property at cost | $ | 9,613,402 | $ | 9,003,403 | $ | 8,656,117 | ||||||
Less accumulated depreciation and amortization | 4,755,118 | 4,470,509 | 4,337,288 | |||||||||
|
|
|
|
|
| |||||||
Net property at cost | $ | 4,858,284 | $ | 4,532,894 | $ | 4,318,829 | ||||||
|
|
|
|
|
|
In millions | July 29, 2023 | January 28, 2023 | July 30, 2022 | ||||||||
Land and buildings | $ | 2,086 | $ | 2,043 | $ | 1,960 | |||||
Leasehold costs and improvements | 4,147 | 3,874 | 3,667 | ||||||||
Furniture, fixtures and equipment | 7,797 | 7,400 | 7,080 | ||||||||
Total property at cost | $ | 14,030 | $ | 13,317 | $ | 12,707 | |||||
Less: accumulated depreciation and amortization | 7,864 | 7,534 | 7,317 | ||||||||
Net property at cost | $ | 6,166 | $ | 5,783 | $ | 5,390 |
As previously disclosed, during fiscal 2017,July 29, 2023 and $434 million for the Company identified fully depreciated assets that were no longersix months ended July 30, 2022.
10
2023 and July 30, 2022, respectively.
In thousands | Foreign Currency Translation | Deferred Benefit Costs | Cash Flow Hedge on Debt | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Balance, January 28, 2017 | $ | (491,803 | ) | $ | (199,481 | ) | $ | (2,942 | ) | $ | (694,226 | ) | ||||
Additions to other comprehensive income: | ||||||||||||||||
Foreign currency translation adjustments (net of taxes of $16,212) | 79,393 | — | — | 79,393 | ||||||||||||
Reclassifications from other comprehensive income to net income: | ||||||||||||||||
Amortization of prior service cost and deferred gains (net of taxes of $7,500) | — | 11,401 | — | 11,401 | ||||||||||||
Amortization of loss on cash flow hedge (net of taxes of $337) | — | — | 513 | 513 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance, October 28, 2017 | $ | (412,410 | ) | $ | (188,080 | ) | $ | (2,429 | ) | $ | (602,919 | ) | ||||
|
|
|
|
|
|
|
|
2023 and the six months ended July 29, 2023:
In millions and net of immaterial taxes | Foreign Currency Translation | Deferred Benefit Costs | Accumulated Other Comprehensive (Loss) Income | |||||||||||
Balance, January 29, 2022 | $ | (488) | $ | (199) | $ | (687) | ||||||||
Additions to other comprehensive loss: | ||||||||||||||
Foreign currency translation adjustments, net of taxes | (56) | — | (56) | |||||||||||
Recognition of net gains/losses on benefit obligations, net of taxes | — | 121 | 121 | |||||||||||
Reclassifications from other comprehensive loss to net income: | ||||||||||||||
Amortization of prior service cost and deferred gains/losses, net of taxes | — | 16 | 16 | |||||||||||
Balance, January 28, 2023 | $ | (544) | $ | (62) | $ | (606) | ||||||||
Additions to other comprehensive loss: | ||||||||||||||
Foreign currency translation adjustments, net of taxes | 54 | — | 54 | |||||||||||
Reclassifications from other comprehensive loss to net income: | ||||||||||||||
Amortization of prior service cost and deferred gains/losses, net of taxes | — | 1 | 1 | |||||||||||
Balance, July 29, 2023 | $ | (490) | $ | (61) | $ | (551) |
$1.3 billion for the six months ended July 30, 2022. These expenditures were funded by cash on hand and cash generated from current and prior period operations.
In February 2017, TJX announced that its Boardrepurchase as of Directors had approved an additional stock repurchase program that authorized the repurchase of up to $1.0 billion of TJX common stock from time to time, all of which remained available at October 28, 2017.
July 29, 2023.
11
Thirteen Weeks Ended | ||||||||
In thousands, except per share data | October 28, 2017 | October 29, 2016 | ||||||
Basic earnings per share | ||||||||
Net income | $ | 641,436 | $ | 549,786 | ||||
Weighted average common shares outstanding for basic EPS | 634,022 | 653,559 | ||||||
Basic earnings per share | $ | 1.01 | $ | 0.84 | ||||
Diluted earnings per share | ||||||||
Net income | $ | 641,436 | $ | 549,786 | ||||
Shares for basic and diluted earnings per share calculations: | ||||||||
Weighted average common shares outstanding for basic EPS | 634,022 | 653,559 | ||||||
Assumed exercise/vesting of: | ||||||||
Stock options and awards | 8,859 | 8,162 | ||||||
|
|
|
| |||||
Weighted average common shares outstanding for diluted EPS | 642,881 | 661,721 | ||||||
|
|
|
| |||||
Diluted earnings per share | $ | 1.00 | $ | 0.83 |
Thirty-Nine Weeks Ended | ||||||||
In thousands, except per share data | October 28, 2017 | October 29, 2016 | ||||||
Basic earnings per share | ||||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
Weighted average common shares outstanding for basic EPS | 639,191 | 657,746 | ||||||
Basic earnings per share | $ | 2.71 | $ | 2.46 | ||||
Diluted earnings per share | ||||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
Shares for basic and diluted earnings per share calculations: | ||||||||
Weighted average common shares outstanding for basic EPS | 639,191 | 657,746 | ||||||
Assumed exercise/vesting of: | ||||||||
Stock options and awards | 9,481 | 8,886 | ||||||
|
|
|
| |||||
Weighted average common shares outstanding for diluted EPS | 648,672 | 666,632 | ||||||
|
|
|
| |||||
Diluted earnings per share | $ | 2.67 | $ | 2.43 |
share:
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||
Amounts in millions, except per share amounts | July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 | ||||||||||
Basic earnings per share: | ||||||||||||||
Net income | $ | 989 | $ | 810 | $ | 1,880 | $ | 1,397 | ||||||
Weighted average common shares outstanding for basic earnings per share calculation | 1,148 | 1,168 | 1,151 | 1,173 | ||||||||||
Basic earnings per share | $ | 0.86 | $ | 0.69 | $ | 1.63 | $ | 1.19 | ||||||
Diluted earnings per share: | ||||||||||||||
Net income | $ | 989 | $ | 810 | $ | 1,880 | $ | 1,397 | ||||||
Weighted average common shares outstanding for basic earnings per share calculation | 1,148 | 1,168 | 1,151 | 1,173 | ||||||||||
Assumed exercise/vesting of stock options and awards | 13 | 10 | 12 | 11 | ||||||||||
Weighted average common shares outstanding for diluted earnings per share calculation | 1,161 | 1,178 | 1,163 | 1,184 | ||||||||||
Diluted earnings per share | $ | 0.85 | $ | 0.69 | $ | 1.62 | $ | 1.18 | ||||||
Cash dividends declared per share | $ | 0.3325 | $ | 0.295 | $ | 0.665 | $ | 0.59 |
12
July 30, 2022.
13
In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at October 28, 2017 | |||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||
Intercompany balances, primarily debt and related interest |
| |||||||||||||||||||||||||||
zł | 67,000 | £ | 13,000 | 0.1940 | (Accrued Exp) | $ | — | $ | (1,211 | ) | $ | (1,211 | ) | |||||||||||||||
€ | 49,950 | £ | 43,317 | 0.8672 | Prepaid Exp / (Accrued Exp) | 277 | (1,600 | ) | (1,323 | ) | ||||||||||||||||||
U.S.$ | 68,445 | £ | 55,000 | 0.8036 | Prepaid Exp | 3,849 | — | 3,849 | ||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: |
| |||||||||||||||||||||||||||
Diesel contracts | | Fixed on 250k – 2.5M gal per month | | | Float on 250k – 2.5M gal per month | | N/A | Prepaid Exp | 5,226 | — | 5,226 | |||||||||||||||||
Intercompany billings in Europe, primarily merchandise related | € | 27,000 | £ | 24,062 | 0.8912 | Prepaid Exp | 202 | — | 202 | |||||||||||||||||||
Merchandise purchase commitments |
| |||||||||||||||||||||||||||
C$ | 511,004 | U.S.$ | 399,650 | 0.7821 | Prepaid Exp / (Accrued Exp) | 5,023 | (4,770 | ) | 253 | |||||||||||||||||||
C$ | 25,305 | € | 17,000 | 0.6718 | Prepaid Exp / (Accrued Exp) | 63 | (62 | ) | 1 | |||||||||||||||||||
£ | 163,682 | U.S.$ | 214,000 | 1.3074 | Prepaid Exp / (Accrued Exp) | 678 | (2,298 | ) | (1,620 | ) | ||||||||||||||||||
A$ | 27,187 | U.S.$ | 21,351 | 0.7853 | Prepaid Exp | 467 | — | 467 | ||||||||||||||||||||
zł | 313,150 | £ | 65,249 | 0.2084 | Prepaid Exp / (Accrued Exp) | 580 | (350 | ) | 230 | |||||||||||||||||||
U.S.$ | 2,928 | £ | 2,245 | 0.7667 | Prepaid Exp | 16 | — | 16 | ||||||||||||||||||||
U.S.$ | 68,723 | € | 58,859 | 0.8565 | Prepaid Exp / (Accrued Exp) | 729 | (989 | ) | (260 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Total fair value of derivative financial instruments |
| $ | 17,110 | $ | (11,280 | ) | $ | 5,830 | ||||||||||||||||||||
|
|
|
|
|
|
14
July 29, 2023:
In millions | Pay | Receive | Blended Contract Rate | Balance Sheet Location | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at July 29, 2023 | ||||||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||||||
Intercompany balances, primarily debt: | |||||||||||||||||||||||||||||
€ | 60 | £ | 52 | 0.8738 | Prepaid Exp | $ | 0.6 | $ | — | $ | 0.6 | ||||||||||||||||||
A$ | 162 | U.S.$ | 112 | 0.6926 | Prepaid Exp | 3.5 | — | 3.5 | |||||||||||||||||||||
U.S.$ | 69 | £ | 55 | 0.8010 | Prepaid Exp | 2.0 | — | 2.0 | |||||||||||||||||||||
£ | 200 | U.S.$ | 244 | 1.2191 | (Accrued Exp) | — | (13.4) | (13.4) | |||||||||||||||||||||
€ | 200 | U.S.$ | 219 | 1.0964 | Prepaid Exp / (Accrued Exp) | 0.3 | (3.3) | (3.0) | |||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: | |||||||||||||||||||||||||||||
Diesel fuel contracts | Fixed on 3.0M – 3.8M gal per month | Float on 3.0M – 3.8M gal per month | N/A | (Accrued Exp) | — | (2.0) | (2.0) | ||||||||||||||||||||||
Intercompany billings in TJX International, primarily merchandise: | |||||||||||||||||||||||||||||
€ | 107 | £ | 91 | 0.8526 | (Accrued Exp) | — | (0.8) | (0.8) | |||||||||||||||||||||
Merchandise purchase commitments: | |||||||||||||||||||||||||||||
C$ | 876 | U.S.$ | 655 | 0.7473 | Prepaid Exp / (Accrued Exp) | 0.2 | (9.0) | (8.8) | |||||||||||||||||||||
C$ | 28 | € | 19 | 0.6799 | Prepaid Exp / (Accrued Exp) | 0.1 | (0.3) | (0.2) | |||||||||||||||||||||
£ | 376 | U.S.$ | 468 | 1.2462 | Prepaid Exp / (Accrued Exp) | 0.5 | (15.5) | (15.0) | |||||||||||||||||||||
A$ | 96 | U.S.$ | 65 | 0.6810 | Prepaid Exp | 1.3 | — | 1.3 | |||||||||||||||||||||
zł | 605 | £ | 114 | 0.1878 | (Accrued Exp) | — | (4.4) | (4.4) | |||||||||||||||||||||
U.S.$ | 110 | € | 101 | 0.9139 | Prepaid Exp / (Accrued Exp) | 1.3 | (0.3) | 1.0 | |||||||||||||||||||||
Total fair value of derivative financial instruments | $ | 9.8 | $ | (49.0) | $ | (39.2) |
In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at January 28, 2017 | |||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||
Intercompany balances, primarily debt and related interest |
| |||||||||||||||||||||||||||
zł | 67,000 | £ | 13,000 | 0.1940 | (Accrued Exp) | $ | — | $ | (6 | ) | $ | (6 | ) | |||||||||||||||
€ | 63,000 | £ | 54,452 | 0.8643 | Prepaid Exp | 263 | — | 263 | ||||||||||||||||||||
U.S.$ | 68,445 | £ | 55,000 | 0.8036 | Prepaid Exp | 1,196 | — | 1,196 | ||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: |
| |||||||||||||||||||||||||||
Diesel contracts | | Fixed on 2.1M – 2.5M gal per month | | | Float on 2.1M– 2.5M gal per month | | N/A | Prepaid Exp | 2,183 | — | 2,183 | |||||||||||||||||
Intercompany billings in Europe, primarily merchandise related |
| |||||||||||||||||||||||||||
€ | 68,000 | £ | 58,306 | 0.8574 | Prepaid Exp | 262 | — | 262 | ||||||||||||||||||||
Merchandise purchase commitments | ||||||||||||||||||||||||||||
C$ | 462,025 | U.S.$ | 349,750 | 0.7570 | Prepaid Exp / (Accrued Exp) | 1,089 | (3,081 | ) | (1,992 | ) | ||||||||||||||||||
C$ | 19,571 | € | 13,650 | 0.6975 | Prepaid Exp / (Accrued Exp) | 22 | (290 | ) | (268 | ) | ||||||||||||||||||
£ | 180,963 | U.S.$ | 227,500 | 1.2572 | Prepaid Exp / (Accrued Exp) | 2,327 | (2,695 | ) | (368 | ) | ||||||||||||||||||
zł | 249,079 | £ | 48,593 | 0.1951 | Prepaid Exp / (Accrued Exp) | 681 | (927 | ) | (246 | ) | ||||||||||||||||||
U.S.$ | 22,226 | € | 20,686 | 0.9307 | Prepaid Exp / (Accrued Exp) | 178 | (257 | ) | (79 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Total fair value of financial instruments |
| $ | 8,201 | $ | (7,256 | ) | $ | 945 | ||||||||||||||||||||
|
|
|
|
|
|
15
2023:
In millions | Pay | Receive | Blended Contract Rate | Balance Sheet Location | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at January 28, 2023 | ||||||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||||||
Intercompany balances, primarily debt: | |||||||||||||||||||||||||||||
€ | 60 | £ | 53 | 0.8807 | (Accrued Exp) | $ | — | $ | (0.3) | $ | (0.3) | ||||||||||||||||||
A$ | 150 | U.S.$ | 105 | 0.7003 | (Accrued Exp) | — | (2.6) | (2.6) | |||||||||||||||||||||
U.S.$ | 69 | £ | 55 | 0.8010 | (Accrued Exp) | — | (0.3) | (0.3) | |||||||||||||||||||||
£ | 200 | U.S.$ | 244 | 1.2191 | (Accrued Exp) | — | (5.5) | (5.5) | |||||||||||||||||||||
€ | 200 | U.S.$ | 213 | 1.0652 | Prepaid Exp / (Accrued Exp) | 0.8 | (7.0) | (6.2) | |||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: | |||||||||||||||||||||||||||||
Diesel fuel contracts | Fixed on 3.2M – 3.6M gal per month | Float on 3.2M– 3.6M gal per month | N/A | Prepaid Exp | 3.9 | — | 3.9 | ||||||||||||||||||||||
Intercompany billings in TJX International, primarily merchandise: | |||||||||||||||||||||||||||||
€ | 146 | £ | 129 | 0.8834 | Prepaid Exp | 0.8 | — | 0.8 | |||||||||||||||||||||
Merchandise purchase commitments: | |||||||||||||||||||||||||||||
C$ | 705 | U.S.$ | 525 | 0.7449 | Prepaid Exp / (Accrued Exp) | 2.2 | (7.1) | (4.9) | |||||||||||||||||||||
C$ | 23 | € | 16 | 0.7064 | Prepaid Exp / (Accrued Exp) | 0.4 | (0.0) | 0.4 | |||||||||||||||||||||
£ | 299 | U.S.$ | 356 | 1.1916 | Prepaid Exp / (Accrued Exp) | 0.1 | (15.4) | (15.3) | |||||||||||||||||||||
zł | 507 | £ | 91 | 0.1788 | (Accrued Exp) | — | (3.6) | (3.6) | |||||||||||||||||||||
A$ | 104 | U.S.$ | 71 | 0.6819 | (Accrued Exp) | — | (3.3) | (3.3) | |||||||||||||||||||||
U.S.$ | 85 | € | 82 | 0.9634 | Prepaid Exp | 4.3 | — | 4.3 | |||||||||||||||||||||
Total fair value of derivative financial instruments | $ | 12.5 | $ | (45.1) | $ | (32.6) |
In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at October 29, 2016 | |||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||
Intercompany balances, primarily debt and related interest |
| |||||||||||||||||||||||||||
zł | 57,073 | C$ | 19,606 | 0.3435 | Prepaid Exp | $ | 199 | $ | — | $ | 199 | |||||||||||||||||
zł | 45,000 | £ | 7,403 | 0.1645 | (Accrued Exp) | — | (2,357 | ) | (2,357 | ) | ||||||||||||||||||
€ | 61,000 | £ | 47,211 | 0.7740 | (Accrued Exp) | — | (9,681 | ) | (9,681 | ) | ||||||||||||||||||
U.S.$ | 77,957 | £ | 55,000 | 0.7055 | (Accrued Exp) | — | (10,999 | ) | (10,999 | ) | ||||||||||||||||||
£ | 25,000 | C$ | 41,123 | 1.6449 | Prepaid Exp | 45 | — | 45 | ||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: |
| |||||||||||||||||||||||||||
Diesel contracts | | Fixed on 2.1M – 2.3M gal per month | | | Float on 2.1M – 2.3M gal per month | | N/A | Prepaid Exp | 1,485 | — | 1,485 | |||||||||||||||||
Intercompany billings in Europe, primarily merchandise related | € | 88,000 | £ | 79,577 | 0.9043 | Prepaid Exp | 186 | — | 186 | |||||||||||||||||||
Merchandise purchase commitments |
| |||||||||||||||||||||||||||
C$ | 461,631 | U.S.$ | 355,350 | 0.7698 | Prepaid Exp | 10,434 | — | 10,434 | ||||||||||||||||||||
C$ | 21,643 | € | 14,900 | 0.6885 | Prepaid Exp | 217 | — | 217 | ||||||||||||||||||||
£ | 191,518 | U.S.$ | 252,600 | 1.3189 | Prepaid Exp / (Accrued Exp) | 18,824 | (626 | ) | 18,198 | |||||||||||||||||||
zł | 258,005 | £ | 50,292 | 0.1949 | Prepaid Exp / (Accrued Exp) | 1 | (3,875 | ) | (3,874 | ) | ||||||||||||||||||
U.S.$ | 675 | £ | 468 | 0.6934 | (Accrued Exp) | — | (106 | ) | (106 | ) | ||||||||||||||||||
U.S.$ | 49,288 | € | 43,819 | 0.8891 | Prepaid Exp / (Accrued Exp) | 19 | (1,122 | ) | (1,103 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Total fair value of derivative financial instruments |
| $ | 31,410 | $ | (28,766 | ) | $ | 2,644 | ||||||||||||||||||||
|
|
|
|
|
|
16
July 30, 2022:
In millions | Pay | Receive | Blended Contract Rate | Balance Sheet Location | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at July 30, 2022 | ||||||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||||||
Intercompany balances, primarily debt: | |||||||||||||||||||||||||||||
€ | 60 | £ | 51 | 0.8428 | Prepaid Exp | $ | 0.3 | $ | — | $ | 0.3 | ||||||||||||||||||
A$ | 170 | U.S.$ | 120 | 0.7034 | Prepaid Exp / (Accrued Exp) | 0.8 | (1.0) | (0.2) | |||||||||||||||||||||
U.S.$ | 75 | £ | 55 | 0.7368 | (Accrued Exp) | — | (6.8) | (6.8) | |||||||||||||||||||||
£ | 150 | U.S.$ | 204 | 1.3578 | Prepaid Exp | 19.1 | — | 19.1 | |||||||||||||||||||||
€ | 200 | U.S.$ | 223 | 1.1156 | Prepaid Exp / (Accrued Exp) | 14.7 | (0.1) | 14.6 | |||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: | |||||||||||||||||||||||||||||
Diesel fuel contracts | Fixed on 2.6M – 3.9M gal per month | Float on 2.6M – 3.9M gal per month | N/A | Prepaid Exp | 38.2 | — | 38.2 | ||||||||||||||||||||||
Intercompany billings in TJX International, primarily merchandise: | |||||||||||||||||||||||||||||
€ | 206 | £ | 174 | 0.8462 | Prepaid Exp | 2.1 | — | 2.1 | |||||||||||||||||||||
Merchandise purchase commitments: | |||||||||||||||||||||||||||||
C$ | 807 | U.S.$ | 635 | 0.7867 | Prepaid Exp / (Accrued Exp) | 6.7 | (1.0) | 5.7 | |||||||||||||||||||||
C$ | 26 | € | 19 | 0.7314 | (Accrued Exp) | — | (0.7) | (0.7) | |||||||||||||||||||||
£ | 440 | U.S.$ | 569 | 1.2941 | Prepaid Exp / (Accrued Exp) | 30.0 | (2.2) | 27.8 | |||||||||||||||||||||
A$ | 71 | U.S.$ | 51 | 0.7141 | Prepaid Exp / (Accrued Exp) | 1.1 | (0.4) | 0.7 | |||||||||||||||||||||
zł | 701 | £ | 124 | 0.1770 | Prepaid Exp / (Accrued Exp) | 2.2 | (0.0) | 2.2 | |||||||||||||||||||||
U.S.$ | 114 | € | 105 | 0.9188 | Prepaid Exp / (Accrued Exp) | 0.1 | (6.0) | (5.9) | |||||||||||||||||||||
Total fair value of derivative financial instruments | $ | 115.3 | $ | (18.2) | $ | 97.1 |
Presented below is the
Amount of Gain (Loss) Recognized in Income by Derivative | ||||||||||
Thirteen Weeks Ended | ||||||||||
In thousands | Location of Gain (Loss) Recognized in Income by Derivative | October 28, 2017 | October 29, 2016 | |||||||
Fair value hedges: | ||||||||||
Intercompany balances, primarily debt and related interest | Selling, general and administrative expenses | $ | (1,454 | ) | $ | (10,549 | ) | |||
Economic hedges for which hedge accounting was not elected: | ||||||||||
Diesel fuel contracts | Cost of sales, including buying and occupancy costs | 4,947 | 4,241 | |||||||
Intercompany billings in Europe, primarily merchandise related | Cost of sales, including buying and occupancy costs | 328 | (5,911 | ) | ||||||
Merchandise purchase commitments | Cost of sales, including buying and occupancy costs | 13,336 | 23,105 | |||||||
|
|
|
| |||||||
Gain recognized in income | $ | 17,157 | $ | 10,886 | ||||||
|
|
|
|
Amount of Gain (Loss) Recognized in Income by Derivative | ||||||||||
Thirty-Nine Weeks Ended | ||||||||||
In thousands | Location of Gain (Loss) Recognized in Income by Derivative | October 28, 2017 | October 29, 2016 | |||||||
Fair value hedges: | ||||||||||
Intercompany balances, primarily debt and related interest | Selling, general and administrative expenses | $ | (3,820 | ) | $ | (23,835 | ) | |||
Economic hedges for which hedge accounting was not elected: | ||||||||||
Diesel fuel contracts | Cost of sales, including buying and occupancy costs | 3,630 | 3,012 | |||||||
Intercompany billings in Europe, primarily merchandise related | Cost of sales, including buying and occupancy costs | (3,116 | ) | (14,987 | ) | |||||
Merchandise purchase commitments | Cost of sales, including buying and occupancy costs | (20,829 | ) | 15,826 | ||||||
|
|
|
| |||||||
Loss recognized in income | $ | (24,135 | ) | $ | (19,984 | ) | ||||
|
|
|
|
17
Income is presented below:
Amount of (Loss) Gain Recognized in Income by Derivative | |||||||||||||||||
Location of (Loss) Gain Recognized in Income by Derivative | Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
In millions | July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 | |||||||||||||
Fair value hedges: | |||||||||||||||||
Intercompany balances, primarily debt | Selling, general and administrative expenses | $ | (3) | $ | 9 | $ | 3 | $ | 33 | ||||||||
Economic hedges for which hedge accounting was not elected: | |||||||||||||||||
Diesel fuel contracts | Cost of sales, including buying and occupancy costs | 10 | 10 | (8) | 54 | ||||||||||||
Intercompany billings in TJX International, primarily merchandise | Cost of sales, including buying and occupancy costs | 4 | 0 | 4 | 0 | ||||||||||||
Merchandise purchase commitments | Cost of sales, including buying and occupancy costs | (30) | 7 | (22) | 48 | ||||||||||||
(Loss) gain recognized in income | $ | (19) | $ | 26 | $ | (23) | $ | 135 |
Level 1: | Unadjusted quoted prices in active markets for identical assets or liabilities |
Level 2: | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability |
Level 3: | Unobservable inputs for the asset or liability |
In thousands | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
Level 1 | ||||||||||||
Assets: | ||||||||||||
Executive Savings Plan investments | $ | 231,618 | $ | 195,733 | $ | 185,042 | ||||||
Level 2 | ||||||||||||
Assets: | ||||||||||||
Short-term investments | $ | 511,618 | $ | 543,242 | $ | 450,804 | ||||||
Foreign currency exchange contracts | 11,884 | 6,018 | 29,925 | |||||||||
Diesel fuel contracts | 5,226 | 2,183 | 1,485 | |||||||||
Liabilities: | ||||||||||||
Foreign currency exchange contracts | $ | 11,280 | $ | 7,256 | $ | 28,766 |
In millions | July 29, 2023 | January 28, 2023 | July 30, 2022 | ||||||||
Level 1 | |||||||||||
Assets: | |||||||||||
Executive Savings Plan investments | $ | 394.8 | $ | 371.6 | $ | 364.3 | |||||
Level 2 | |||||||||||
Assets: | |||||||||||
Foreign currency exchange contracts | $ | 9.8 | $ | 8.6 | $ | 77.1 | |||||
Diesel fuel contracts | — | 3.9 | 38.2 | ||||||||
Liabilities: | |||||||||||
Foreign currency exchange contracts | $ | 47.0 | $ | 45.1 | $ | 18.2 | |||||
Diesel fuel contracts | 2.0 | — | — | ||||||||
Short-term investments, foreign
For additional information on long-term debt, see Note I—Long-Term Debt and Credit Lines.
18
Thirteen Weeks Ended | ||||||||
In thousands | October 28, 2017 | October 29, 2016 | ||||||
Net sales: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 5,298,479 | $ | 5,252,815 | ||||
HomeGoods | 1,228,768 | 1,078,373 | ||||||
TJX Canada | 983,236 | 855,473 | ||||||
TJX International | 1,251,737 | 1,105,027 | ||||||
|
|
|
| |||||
$ | 8,762,220 | $ | 8,291,688 | |||||
|
|
|
| |||||
Segment profit: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 666,092 | $ | 703,092 | ||||
HomeGoods | 163,835 | 149,739 | ||||||
TJX Canada | 206,472 | 142,491 | ||||||
TJX International | 87,066 | 87,821 | ||||||
|
|
|
| |||||
1,123,465 | 1,083,143 | |||||||
General corporate expense | 95,484 | 97,902 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 7,981 | 12,462 | ||||||
|
|
|
| |||||
Income before provision for income taxes | $ | 1,020,000 | $ | 889,833 | ||||
|
|
|
|
19
Thirty-Nine Weeks Ended | ||||||||
In thousands | October 28, 2017 | October 29, 2016 | ||||||
Net sales: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 15,550,253 | $ | 15,217,188 | ||||
HomeGoods | 3,506,435 | 3,075,472 | ||||||
TJX Canada | 2,554,033 | 2,297,831 | ||||||
TJX International | 3,293,223 | 3,125,606 | ||||||
|
|
|
| |||||
$ | 24,903,944 | $ | 23,716,097 | |||||
|
|
|
| |||||
Segment profit: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 2,100,138 | $ | 2,154,238 | ||||
HomeGoods | 457,272 | 415,996 | ||||||
TJX Canada | 392,581 | 321,942 | ||||||
TJX International | 132,893 | 145,047 | ||||||
|
|
|
| |||||
3,082,884 | 3,037,223 | |||||||
General corporate expense | 311,177 | 290,975 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 27,499 | 33,918 | ||||||
|
|
|
| |||||
Income before provision for income taxes | $ | 2,744,208 | $ | 2,629,384 | ||||
|
|
|
|
20
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||
In millions | July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 | ||||||||||
Net sales: | ||||||||||||||
In the United States: | ||||||||||||||
Marmaxx | $ | 7,903 | $ | 7,236 | $ | 15,269 | $ | 14,107 | ||||||
HomeGoods | 2,011 | 1,856 | 3,977 | 3,892 | ||||||||||
TJX Canada | 1,223 | 1,248 | 2,261 | 2,330 | ||||||||||
TJX International | 1,621 | 1,503 | 3,034 | 2,920 | ||||||||||
Total net sales | $ | 12,758 | $ | 11,843 | $ | 24,541 | $ | 23,249 | ||||||
Segment profit: | ||||||||||||||
In the United States: | ||||||||||||||
Marmaxx | $ | 1,084 | $ | 933 | $ | 2,112 | $ | 1,837 | ||||||
HomeGoods | 175 | 50 | 319 | 172 | ||||||||||
TJX Canada | 192 | 197 | 309 | 324 | ||||||||||
TJX International | 32 | 105 | 70 | 118 | ||||||||||
Total segment profit | 1,483 | 1,285 | 2,810 | 2,451 | ||||||||||
General corporate expense | 194 | 188 | 350 | 265 | ||||||||||
Impairment on equity investment | — | — | — | 218 | ||||||||||
Interest (income) expense, net | (38) | 11 | (75) | 30 | ||||||||||
Income before income taxes | $ | 1,327 | $ | 1,086 | $ | 2,535 | $ | 1,938 |
Funded Plan | Unfunded Plan | |||||||||||||||
Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
In thousands | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Service cost | $ | 11,655 | $ | 11,360 | $ | 403 | $ | 293 | ||||||||
Interest cost | 13,866 | 14,023 | 820 | 793 | ||||||||||||
Expected return on plan assets | (17,309 | ) | (17,633 | ) | — | — | ||||||||||
Recognized actuarial losses | 5,428 | 7,943 | 641 | 783 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Expense related to current period | 13,640 | 15,693 | 1,864 | 1,869 | ||||||||||||
Pension settlement charge | — | 31,173 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expense | $ | 13,640 | $ | 46,866 | $ | 1,864 | $ | 1,869 | ||||||||
|
|
|
|
|
|
|
|
Funded Plan | Unfunded Plan | |||||||||||||||
Thirty-Nine Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
In thousands | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Service cost | $ | 35,264 | $ | 33,778 | $ | 1,578 | $ | 1,376 | ||||||||
Interest cost | 41,384 | 42,747 | 2,506 | 2,543 | ||||||||||||
Expected return on plan assets | (52,073 | ) | (53,503 | ) | — | — | ||||||||||
Recognized actuarial losses | 16,582 | 22,362 | 2,305 | 2,512 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net periodic pension cost | 41,157 | 45,384 | 6,389 | 6,431 | ||||||||||||
Pension settlement charge | — | 31,173 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expense | $ | 41,157 | $ | 76,557 | $ | 6,389 | $ | 6,431 | ||||||||
|
|
|
|
|
|
|
|
Funded Plan | Unfunded Plan | |||||||||||||
Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||||||||
In millions | July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 | ||||||||||
Service cost | $ | 9 | $ | 11 | $ | 0 | $ | 0 | ||||||
Interest cost | 18 | 14 | 2 | 1 | ||||||||||
Expected return on plan assets | (20) | (22) | — | — | ||||||||||
Amortization of net actuarial loss and prior service cost | 0 | 5 | 1 | 1 | ||||||||||
Total expense | $ | 7 | $ | 8 | $ | 3 | $ | 2 | ||||||
Funded Plan | Unfunded Plan | |||||||||||||
Twenty-Six Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||
In millions | July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 | ||||||||||
Service cost | $ | 17 | $ | 23 | $ | 1 | $ | 1 | ||||||
Interest cost | 36 | 29 | 3 | 2 | ||||||||||
Expected return on plan assets | (40) | (44) | — | — | ||||||||||
Amortization of net actuarial loss and prior service cost | 0 | 9 | 1 | 2 | ||||||||||
Total expense | $ | 13 | $ | 17 | $ | 5 | $ | 5 |
2024.
During the third quarter of fiscal 2017, TJX
TJX also had maintained an unfunded postretirement medical plan, which was closed to new benefits in fiscal 2006. During the first quarter of fiscal 2017, TJX terminated2024 and would impact the unfunded postretirement medical planCompany’s pretax profit margin and made a discretionary lump sum payment to participants. The settlement of the liability and the recognition of the remaining negative plan amendment resulted in apre-tax benefit of $5.5 million in the first quarter of fiscal 2017.
21
earnings per share results.
In thousands | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
General corporate debt: | ||||||||||||
2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $245 at October 28, 2017, $278 at January 28, 2017 and $289 at October 29, 2016) | $ | 499,755 | $ | 499,722 | $ | 499,711 | ||||||
2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76% after reduction of unamortized debt discount of $269 at October 28, 2017, $325 at January 28, 2017 and $344 at October 29, 2016) | 749,732 | 749,675 | 749,656 | |||||||||
2.25% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $6,590 at October 28, 2017, $7,149 at January 28, 2017 and $7,336 at October 29, 2016) | 993,410 | 992,851 | 992,664 | |||||||||
Debt issuance cost | (13,042 | ) | (14,649 | ) | (15,118 | ) | ||||||
|
|
|
|
|
| |||||||
Long-term debt | $ | 2,229,855 | $ | 2,227,599 | $ | 2,226,913 | ||||||
|
|
|
|
|
|
On September 12, 2016, TJX issued $1.0 billion aggregate principal amount
In millions and net of immaterial unamortized debt discounts | July 29, 2023 | January 28, 2023 | July 30, 2022 | ||||||||
General corporate debt: | |||||||||||
2.500% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount) | $ | — | $ | 500 | $ | 500 | |||||
2.250% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount) | 998 | 997 | 997 | ||||||||
1.150% senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18% after reduction of unamortized debt discount) | 499 | 499 | 499 | ||||||||
3.875% senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89% after reduction of unamortized debt discount) | 496 | 496 | 495 | ||||||||
1.600% senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61% after reduction of unamortized debt discount) | 500 | 500 | 500 | ||||||||
4.500% senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52% after reduction of unamortized debt discount) | 383 | 383 | 383 | ||||||||
Total debt | 2,876 | 3,375 | 3,374 | ||||||||
Current maturities of long-term debt, net of debt issuance costs | — | (500) | (500) | ||||||||
Debt issuance costs | (15) | (16) | (17) | ||||||||
Long-term debt | $ | 2,861 | $ | 2,859 | $ | 2,857 |
At October 28, 2017, TJX also had outstanding $500 million aggregate principal amount of 2.50%ten-year notes Notes due May 2023 at maturity.
At October 28, 2017, TJX had two $500 million revolving credit facilities, one which maturesfacility that was set to mature in March 2020May 2024 (the “2024 Revolving Credit Facility”). On May 8, 2023, the Company amended the 2024 Revolving Credit Facility to (i) extend the maturity to May 8, 2028 and one which matures in March 2022. At October 28, 2017,(ii) replace the agreements require quarterly paymentsLondon Interbank Offered Rate (“LIBOR”) with a term secured overnight financing rate plus a 0.10% credit spread adjustment (“Adjusted Term SOFR”). Term SOFR borrowings under the “2028 Revolving Credit Facility”, as amended, bear interest at the Adjusted Term SOFR plus a margin of 6.045.0 - 87.5 basis points per annumand a quarterly facility fee payment of 5.0 - 12.5 basis points on the committed amounts for both agreements. This rate istotal commitments under the 2028 Revolving Credit Facility, in each case, based on the credit ratings of TJX’sCompany’s long-term debt ratings. All other material terms and would varyconditions of the 2028 Revolving Credit Facility were unchanged.
22
As of October 28, 2017, January 28, 2017 and October 29, 2016,July 30, 2022, TJX Canada had two uncommitted credit lines, a C$10 million facility for operating expenses and a C$10 million letter of credit facility. As of October 28, 2017,July 29, 2023, January 28, 20172023 and October 29, 2016,July 30, 2022, and during the quarters and year then ended, there were no amounts outstanding on the Canadian credit line for operating expenses. As of October 28, 2017,July 29, 2023, January 28, 2017,2023 and October 29, 2016, ourJuly 30, 2022, the Company’s European business at TJX International had an uncommitteda credit line of £5 million. As of October 28, 2017,July 29, 2023, January 28, 2017,2023 and October 29, 2016,July 30, 2022, and during the quarters and year then ended, there were no amounts outstanding on the European credit line.
matters in fiscal 2024.
July 30, 2022.
July 30, 2022.
earnings.
Commitments
TJX has contingent obligations on leases, for which it was a lessee or guarantor, which were assigned to third parties without TJX being released by the landlords. Over many years, TJX has assigned numerous leases that it had originally leased or guaranteed to a significant number of third parties. With the exception of leases of former businesses for which TJX has reserved, the Company has rarely had a claim with respect to assigned leases, and accordingly, the Company does not expect that such leases will have a material adverse impact on its financial condition, results of operations or cash flows. TJX does not generally have sufficient information about these leases to estimate our potential contingent obligations under them, which could be triggered in the event that one or more of the current tenants does not fulfill their obligations related to one or more of these leases.
TJX may also be contingently liable on up to nine leases of former TJX businesses, for which we believe the likelihood of future liability to TJX is remote, and has contingent obligations in connection with certain assigned or sublet properties that TJX is able to estimate. We estimate that the undiscounted obligations of (i) leases of former operations not included in our reserve for former operations and (ii) properties of our former operations if the subtenants do not fulfill their obligations, are approximately $46.8 million as of October 28, 2017. We believe that most or all of these contingent obligations will not revert to us and, to the extent they do, will be resolved for substantially less due to mitigating factors including our expectation to further sublet.
23
24
Operations
July 29, 2023
Overview
July 30, 2022
Results of Operations
Highlights
25
net sales:
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||||||
July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 | |||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
Cost of sales, including buying and occupancy costs | 69.8 | 72.4 | 70.4 | 72.2 | ||||||||||||||||
Selling, general and administrative expenses | 20.1 | 18.4 | 19.5 | 18.4 | ||||||||||||||||
Impairment on equity investment | — | — | — | 0.9 | ||||||||||||||||
Interest (income) expense, net | (0.3) | 0.1 | (0.3) | 0.1 | ||||||||||||||||
Income before income taxes* | 10.4 | % | 9.2 | % | 10.3 | % | 8.3 | % |
Consolidated net sales for the nine months ended October 28, 2017 totaled $24.9 billion, a 5% increase over $23.7 billiondecrease in last year’s comparable period. The increase reflected a 4% increase from new store sales, a 1% increase in same store sales, and a neutral impact from foreign currency exchange rates. This compares to sales growth of 8% in the nine-month period of fiscal 2017, which reflected a 5% increase in same store sales and a 4% increase from new store sales, offset by a 1% negative impact from foreign currency exchange rates.
average basket.
Consolidated same
In the U.S., same store sales in the Northeast and Florida, areas most affected by the hurricanes and we believe, warm weather, were below the consolidated average for the quarter and nine-month period. Sales in the Southeast (excluding Florida) and the Southwest were above the consolidated average. In Canada, same store sales growth was above the consolidated average for the third quarter and nine-month period ended October 28, 2017. Same store sales growth for our International segment was above the consolidated average for the third quarter and was in line with the consolidated average for the nine-month period ended October 28, 2017.
We define sameor comp store sales, to be sales of those stores that we have operatedbeen in operation for all or a portion of two consecutive fiscal years, or, in other words, stores that are starting their third fiscal year of operation. TheWe calculate comp store sales of Sierra Trading Post (including stores), tjmaxx.comon a 52-week basis by comparing the current and tkmaxx.com (oure-commerce businesses)prior year weekly periods that are not includedmost closely aligned. Relocated stores and stores that have changed in same store sales. We classify a store as a new store until it meetssize are generally classified in the same way as the original store, and we believe that the impact of these stores on the consolidated comp percentage is immaterial.
26
transactions.
The following table sets forth certain information about our consolidated operating results as a percentage of net sales for the following periods:
Percentage of Net Sales Thirteen Weeks Ended October 28, 2017 | Percentage of Net Sales Thirteen Weeks Ended October 29, 2016 | |||||||
Net sales | 100.0 | % | 100.0 | % | ||||
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| |||||
Cost of sales, including buying and occupancy costs | 70.2 | 70.5 | ||||||
Selling, general and administrative expenses | 18.1 | 17.6 | ||||||
Loss on early extinguishment of debt | — | 0.6 | ||||||
Pension settlement charge | — | 0.4 | ||||||
Interest expense, net | 0.1 | 0.2 | ||||||
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|
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| |||||
Income before provision for income taxes* | 11.6 | % | 10.7 | % | ||||
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|
|
|
Percentage of Net Sales Thirty-Nine Weeks Ended October 28, 2017 | Percentage of Net Sales Thirty-Nine Weeks Ended October 29, 2016 | |||||||
Net sales | 100.0 | % | 100.0 | % | ||||
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|
|
| |||||
Cost of sales, including buying and occupancy costs | 70.9 | 70.7 | ||||||
Selling, general and administrative expenses | 18.0 | 17.7 | ||||||
Loss on early extinguishment of debt | — | 0.2 | ||||||
Pension settlement charge | — | 0.1 | ||||||
Interest expense, net | 0.1 | 0.1 | ||||||
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|
|
| |||||
Income before provision for income taxes* | 11.0 | % | 11.1 | % | ||||
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exchange”. This primarily includes the impact that foreign currency exchange rates may have on the year-over-year comparison of merchandise margin as well as “foreign currency gains and losses” on transactions that are denominated in a currency other than the operating division's local currency. These two items can impact segment margin comparison of our foreign divisions, and we have highlighted them when they are meaningful to understanding operating trends. current year. Dollars in thousands Interest expense Capitalized interest Interest (income) Interest expense, net results. SEGMENTS Dollars in millions Net sales Segment profit Segment profit as a percentage of net sales (Decrease) increase in same store sales Stores in operation at end of period T.J. Maxx Marshalls Sierra Trading Post Total Selling square footage at end of period (in thousands) T.J. Maxx Marshalls Sierra Trading Post Total Dollars in millions Net sales Segment profit Segment profit as a percentage of net sales Increase in same store sales Stores in operation at end of period HomeGoods Homesense Total Selling square footage at end of period (in thousands) HomeGoods Homesense Total U.S. Dollars in millions Net sales Segment profit Segment profit as a percentage of net sales Increase in same store sales Stores in operation at end of period Winners HomeSense Marshalls Total Selling square footage at end of period (in thousands) Winners HomeSense Marshalls Total overall comp store sales increase. U.S. Dollars in millions Net sales Segment profit Segment profit as a percentage of net sales Increase in same store sales Stores in operation at end of period T.K. Maxx Homesense T.K. Maxx Australia Total Selling square footage at end of period (in thousands) T.K. Maxx Homesense T.K. Maxx Australia Total basket, partially offset by an increase in customer traffic. All geographies performed in line with the overall comp store sales decline. Dollars in millions General corporate expense favorable freight costs. a contribution to TJX’s U.S. charitable foundation and unfavorable mark-to-market adjustments on fuel hedges, partially offset by favorable mark-to-market adjustments on inventory hedges. 2024 we have used, and in the future we may continue to use, operating cash flow and cash on hand to repay portions of our indebtedness, depending on prevailing market conditions, liquidity requirements, existing economic conditions, contractual restrictions and other factors. As such, we may, from time to time, seek to retire, redeem, prepay or purchase our outstanding debt through redemptions, cash purchases, prepayments, refinancings and/or exchanges, in open market purchases, privately negotiated transactions, by tender offer or otherwise. If we use our operating cash flow and/or cash on hand to repay our debt, it will reduce the amount of cash available for additional capital expenditures.foreign currency exchange rates:Foreign Currency Exchange RatesTwo ways in whichWe specifically refer to “foreign currency” as the impact of translational foreign currency exchange rates affect our reported results areand mark-to-market of inventory derivatives, as follows:•Translation of foreign operating results into U.S. dollars:In our financial statements, we translate the operations of TJX Canada and TJX International from local currencies into U.S. dollars using currency rates in effect at different points in time. Significant changes in foreign exchange rates between comparable prior periods can result in meaningful variations in consolidated net sales, net income and earnings per share growth as well as the net sales and operating results of these segments. Currency translation generally does not affect operating margins, or affects them only slightly, as sales and expenses of the foreign operations are translated at approximately the same rates within a given period.•Inventory-related derivatives: We routinely enter into inventory-related hedging instruments to mitigate the impact on earnings of changes in foreign currency exchange rates on merchandise purchases denominated in currencies other than the local currencies of our divisions, principally TJX Canada and TJX International. As we have not elected “hedge accounting” for these instruments, as defined by U.S. generally accepted accounting principles (“GAAP”), we record amark-to-market gain or loss on the derivative instruments in our results of operations at the end of each reporting period. In subsequent periods, the income statement impact of themark-to-market adjustment is effectively offset when the inventory being hedged is received and paid for. While these effects occur every reporting period, they are of much greater magnitude when there are sudden and significant changes in currency exchange rates during a short period of time. Themark-to-market adjustment on these derivatives does not affect net sales, but it does affect the cost of sales, operating margins and earnings we report.27We refer to the impact of the above two items throughout our discussion as “foreign currency”.described in detail below. This does not include the impact foreign currency exchange rates can have on various transactions that are denominated in a currency other than an operating division’sdivision's local currency. currency, which is referred to as “transactional foreign exchange,” and also described below.suchcertain transactions, we refer to it as “transactional foreign exchange.”sales, including buyingSales, Including Buying and occupancy costs:Occupancy Costsdecreased by 0.3 percentage points to 70.2%was 69.8% for the thirdsecond quarter of fiscal 2018 as compared to last year’s ratio.2024, a decrease of 2.6 percentage points over 72.4% for the second quarter of fiscal 2023. The decrease in the cost of sales ratio, including buying and occupancy costs, for the thirdsecond quarter of fiscal 2024 was driven byprimarily attributable to higher merchandise margin and the favorable impact ofon themark-to-market of our adjustments on fuel and inventory derivatives of 0.3 percentage points along with an improvement in consolidated merchandise margin. These improvements werehedges. Merchandise margin reflects favorable freight costs, partially offset by expense deleverage onhigher shrink accrual rates in the flat same storecurrent year.an increase in consolidated distribution center costs. The 0.2occupancy costs, as a percentage point increase to 70.9%of net sales was 70.4% for the first ninesix months of fiscal 2018 was driven by an increase2024, a decrease of 1.8 percentage points over 72.2% for the first six months of fiscal 2023. The decrease in consolidated distribution center costs. Our increase in distribution centerthe cost of sales ratio, including buying and occupancy costs, for the quarter and nine-month periodfirst six months of fiscal 2024 was primarily attributable to higher merchandise margin, which reflects the impact of processing more units as well as additional investmentsfavorable freight costs, partially offset by higher shrink accrual rates in the supply chain network.generalGeneral and administrative expenses: Selling, general and administrativeAdministrative Expenseswere 18.1%was 20.1% for the second quarter of fiscal 2024, an increase of 1.7 percentage points over 18.4% for the second quarter of fiscal 2023.2018, up 0.5 percentage point over last year’s ratio,2023. Thirteen Weeks Ended Twenty-Six Weeks Ended In millions July 29,
2023July 30,
2022July 29,
2023July 30,
2022Interest expense $ 20 $ 23 $ 43 $ 46 Capitalized interest (1) (2) (2) (3) Interest (income) (57) (10) (116) (13) Interest (income) expense, net $ (38) $ 11 $ (75) $ 30 increased by 0.3 percentage points to 18.0% for the ninefirst six months ended October 28, 2017 asJuly 29, 2023 compared to the same period last year.periods in fiscal 2023 due to an increase in interest income driven by an increase in prevailing rates and a higher average cash balance.increaseexcise tax on the net stock repurchase, Corporate AMT, or other provisions of the IRA did not have a material impact on our results of operations or financial position for both the thirdfirst six months of fiscal 2024.nine-month period25.4% for the second quarter of fiscal 2023. The effective income tax rate was 25.8% for the first six months of fiscal 2024 and 27.9% for the first six months of fiscal 2023. The decrease in the effective income tax rate for the first six months of fiscal 2024 was primarily due to hurricane related expenses, higher store payroll costs resulting from wage increases as well as the impactfirst six months of handlingfiscal 2023 reflecting the impairment of our minority investment in Familia with no estimated tax benefit and the increase in units.Lossexcess tax benefit from share-based compensation in fiscal 2024, partially offset by the resolution of various tax matters in fiscal 2024.early extinguishmentearnings per share and a $0.03 negative impact on earnings per share for the second quarters of debt:On September 12, 2016 we issued $1.0fiscal 2024 and fiscal 2023, respectively.2.25% ten-year notes. fiscal 2024 and fiscal 2023, respectively. The $218 million impairment on our equity investment in Familia had a $0.18 negative impact on earnings per share for the first six months of fiscal 2023. Foreign currency had a $0.01 negative impact on earnings per share and a $0.02 negative impact on earnings per share for the first six months of fiscal 2024 and fiscal 2023, respectively.used a portion of the proceeds to redeem our $375 million 6.95% notes on October 12, 2016, prior to their scheduled maturity of April 15, 2019 and we recorded apre-tax loss on the early extinguishment of debt of $51.8 million.Pension settlement charge: During the fiscal 2017 third quarter, wehave offered eligible former TJX Associates who hadhave not yet commenced receiving their qualified pension plan benefit an opportunity to receive a voluntary lump sum payout of their vested pension plan benefit. On October 21, 2016, TJX’s qualified pension plan paid $103.2 million from pension plan assets to those who accepted this offer.As a result, we anticipate an immaterial non-cash settlement charge. This transaction had no cash impact on TJX, but did result in anon-cashpre-taxpotential non-cash settlement charge of $31.2 millionis expected to be incurred in the third quarter of last year.Interest expense, net: Interest expense, net decreased $4.5 million for the third quarter ended October 28, 2017fiscal 2024 and decreased $6.4 million for the nine months ended October 28, 2017 as compared to the same periods last year. The components of interest expense, net are summarized below: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016 $ 17,349 $ 18,906 $ 51,881 $ 52,851 (1,066 ) (1,948 ) (3,528 ) (6,351 ) (8,302 ) (4,496 ) (20,854 ) (12,582 ) $ 7,981 $ 12,462 $ 27,499 $ 33,918 For the third quarterwould impact our pretax profit margin and first nine months of fiscal 2018, the reduction in net interest expense was driven by additional interest income, primarily due to an increase in invested balances and higher rates of return.Income taxes: The effective income tax rate was 37.1% for the fiscal 2018 third quarter and 36.9% for the nine months ended October 28, 2017 compared to 38.2% for the fiscal 2017 third quarter and 38.4% for the nine months ended October 29, 2016. The decrease in the effective income tax rate was primarily due to excess income tax benefits related to share-based payments, which reduced the effective income tax rate by 1.2 percentage points for the third quarter and 1.5 percentage points for the nine months ended October 28, 2017. The jurisdictional mix of income also contributed to the change of the effective income tax rate.28Net income and net income per share: Net income for the third quarter of fiscal 2018 was $641.4 million, or $1.00 per diluted share, versus $549.8 million, or $0.83 per diluted share, in last year’s third quarter. Foreign currency had a $0.04 positive impact on earnings per share for the third quarter of fiscal 2018 compared to a neutral impact on earnings per share for the third quarter of fiscal 2017. We believe the hurricanes had an estimated $0.03 negative impact on earnings per share for the third quarter of fiscal 2018.Net income for the nine months ended October 28, 2017 was $1.7 billion, or $2.67 per diluted share, compared to $1.6 billion, or $2.43 per diluted share, in last year’s comparable period. Foreign currency had a $0.01 positive impact on earnings per share in the first nine months of fiscal 2018 compared to a $0.01 negative impact on earnings per share in the prior year. The loss on early extinguishment of debt and the pension settlement charge collectively reduced net income by approximately $50.0 million, or $0.08 per share, for both the third quarter and nine months ended October 29, 2016. The benefit in the tax provision due to the change in accounting for share-based compensation increased earnings per share by $0.02 per share for the fiscal 2018 third quarter and $0.06 per share in the first nine months of fiscal 2018.Our stock repurchase programs, which reduce our weighted average diluted shares outstanding, benefited our earnings per share growth by approximately three percent in both the third quarter and first nine months of fiscal 2018.information:InformationTheIn the United States, our Marmaxx segment (T.J.operates T.J. Maxx, Marshalls, tjmaxx.com and tjmaxx.com)marshalls.com and theour HomeGoods segment (HomeGoodsoperates HomeGoods, Homesense and Homesense) both operate in the United States.homegoods.com. Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates T.K. Maxx, Homesense, tkmaxx.com, tkmaxx.de, and tkmaxx.comtkmaxx.at in Europe and T.K. Maxx in Australia. We also operate STP, anoff-price Internet retailer thatIn addition to our four main segments, Sierra operates sierratradingpost.comretail stores and retail storessierra.com in the U.S. The results of STP have beenSierra are included in ourthe Marmaxx segment.net.net, and certain separately disclosed unusual or infrequent items. “Segment profit or loss,” as we define the term, may not be comparable to similarly titled measures used by other entities.companies. The terms “segment margin” or “segment profit margin” are used to describe segment profit or loss as a percentage of net sales. These measures of performance should not be considered an alternative to net income or cash flows from operating activities as an indicator of our performance or as a measure of liquidity.Segments: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016 $ 5,298.5 $ 5,252.8 $ 15,550.3 $ 15,217.2 $ 666.1 $ 703.1 $ 2,100.1 $ 2,154.2 12.6 % 13.4 % 13.5 % 14.2 % (1 )% 5 % 0 % 5 % 1,219 1,179 1,057 1,027 26 11 2,302 2,217 27,034 26,501 24,827 24,614 451 209 52,312 51,324 29 Thirteen Weeks Ended Twenty-Six Weeks Ended U.S. dollars in millions July 29,
2023July 30,
2022July 29,
2023July 30,
2022Net sales $ 7,903 $ 7,236 $ 15,269 $ 14,107 Segment profit $ 1,084 $ 933 $ 2,112 $ 1,837 Segment profit margin 13.7 % 12.9 % 13.8 % 13.0 % Comp store sales 8 % (2) % 7 % 0 % Stores in operation at end of period: T.J. Maxx 1,305 1,290 Marshalls 1,190 1,157 Sierra 83 62 Total 2,578 2,509 Selling square footage at end of period (in millions): T.J. Maxx 28 28 Marshalls 27 26 Sierra 1 1 Total 56 55 increased 1%were $7.9 billion for the third quarter and 2% for the first nine months of fiscal 2018 as compared to the same periods last year. The quarterly increase reflects a 2% increase from new store sales partially offset by a 1% decrease from same store sales. The nine-month increase in net sales included 2% from new store sales, while same store sales were flat. Same store sales for Marmaxx were negatively impacted by the hurricanes and, we believe, unseasonably warm weather, which particularly impacted apparel. To a lesser degree, we believe execution issues in certain categories had an additional negative impact on apparel sales. Despite the third quarter decline in same store sales, customer traffic continued to increase (2% growth), which was more than offset by a decline in the average ticket. Home fashions outperformed apparel in both periods.Segment profit margin decreased to 12.6% for the thirdsecond quarter of fiscal 20182024, an increase of 9% compared to 13.4%$7.2 billion for the same period last year, and for the nine months ended October 28, 2017 segment profit margin decreased to 13.5% compared to 14.2%second quarter of fiscal 2023. This increase in the same period last year. Marmaxx’s decrease in segment profit margin for both thesecond quarter and nine-month period was primarily due to expense deleverage on the lower same store sales as well as wage increases, additional supply chain costs as a result of processing more units and costs related to the hurricanes. These factors more than offset an increase in merchandise margin for both periods. Our U.S.e-commerce businesses, which represent approximately 2% of Marmaxx’s net sales, did not have a significant impact on year-over-year segment margin comparisons for the third quarter.HomeGoods Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016 $ 1,228.8 $ 1,078.4 $ 3,506.4 $ 3,075.5 $ 163.8 $ 149.7 $ 457.3 $ 416.0 13.3 % 13.9 % 13.0 % 13.5 % 3 % 6 % 4 % 7 % 660 568 3 — 663 568 12,332 10,931 62 — 12,394 10,931 Net sales for HomeGoods increased 14% for both the third quarter and the first nine months of fiscal 2018 as compared to the same periods last year. The quarterly increase reflects an 11%8% increase from newcomp store sales and a 3%1% increase in samefrom non-comp store sales. The nine-month increase in net sales included an increase of 10% from newcomp store sales and same store sales of 4%. The increase in same store sales for both periods was largely driven by an increase in customer traffic.Segment profit margin decreased to 13.3%traffic, partially offset by a decrease in average basket.third quarter of fiscal 2018 compared to 13.9% for the same period last year. Segment profit margin decreased to 13.0% for the nine months ended October 28, 2017 compared to 13.5% for the same period last year. The decline in segment margin for the third quarter and nine-month period was primarily due to an increase in supply chain costs and freight costs. Segment margin for the third quarter and the first ninesix months of fiscal 2018 was also unfavorably impacted by higher store payroll costs due to wage increases, as well as higher preopening costs due to2024, an increase in new store openings, includingstart-up costs associated with our new Homesense chainof 8% compared to $14.1 billion for the first six months of fiscal 2023. This increase in the U.S. For the nine-month period, these costs were partially offset by expense leverage on the 4% same store sales increase.Three U.S. Homesense stores opened during the quarter, with one more scheduled to open before the end of fiscal 2018.30Foreign Segments:TJX Canada Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016 $ 983.2 $ 855.5 $ 2,554.0 $ 2,297.8 $ 206.5 $ 142.5 $ 392.6 $ 321.9 21.0 % 16.7 % 15.4 % 14.0 % 4 % 8 % 4 % 10 % 265 255 117 106 72 57 454 418 5,795 5,629 2,179 1,984 1,599 1,307 9,573 8,920 Net sales for TJX Canada increased 15% for the third quarter and 11% for the ninefirst six months ended October 28, 2017 as compared to the same periods last year. The quarterly increase reflects a 6%7% increase in newfrom comp store sales and a 4%1% increase from samenon-comp store sales, as well as currency translation, which positively impacted sales growth by 5%. The nine-month increase in net sales included new store sales growth of 6% and 4% from same store sales, as well as a positive 1% impact due to currency translation.sales. The increase in samecomp store sales for both periods was mainly driven by an increase in customer traffic. Netforgrowth. For the first six months of fiscal 2024, strong apparel comp store sales growth outperformed home fashions comp store sales growth. For both periods, also reflected an increaseall geographies generally performed in units sold that was mostly offset by a decrease inline with the average ticket.21.0%13.7% for the thirdsecond quarter of fiscal 20182024 compared to 16.7%12.9% for the same period last year. Segment profit margin increased to 15.4%13.8% for the ninefirst six months ended October 28, 2017of fiscal 2024 compared to 14.0%13.0% for the nine months ended October 29, 2016. The increase in the segment margin for the quarter and nine-monthsame period included a favorable impact of 1.9 percentage points and 0.3 percentage points, respectively, due to foreign currency, primarily themark-to-market impact of the inventory derivatives. The fiscal third quarter segment margin was favorably impacted by transactional foreign exchange, improved merchandise margin and reduced supply chain cost. The transactional foreign exchange benefit in the third quarter was due to the revaluing of U.S. dollar denominated monetary assets and liabilities resulting in gains this year as compared to losses in last year’s third quarter.year. The increase in segment profit margin for the nine-month periodboth periods was driven by improved merchandise margin, partially offset by higher incentive compensation costs and incremental store wage. Merchandise margin was primarily driven by favorable freight costs and markon, partially offset by higher shrink accrual rates in the current year. Thirteen Weeks Ended Twenty-Six Weeks Ended U.S. dollars in millions July 29,
2023July 30,
2022July 29,
2023July 30,
2022Net sales $ 2,011 $ 1,856 $ 3,977 $ 3,892 Segment profit $ 175 $ 50 $ 319 $ 172 Segment profit margin 8.7 % 2.7 % 8.0 % 4.4 % Comp store sales 4 % (13) % (2) % (10) % Stores in operation at end of period: HomeGoods 907 862 Homesense 49 40 Total 956 902 Selling square footage at end of period (in millions): HomeGoods 17 16 Homesense 1 1 Total 18 17 improved merchandise marginincrease of 0.9 percentage points, which benefitted from8%, compared to $1.9 billion for the year-over-yearsecond quarter of fiscal 2023. This increase in the Canadian dollar.31TJX International Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016 $ 1,251.7 $ 1,105.0 $ 3,293.2 $ 3,125.6 $ 87.1 $ 87.8 $ 132.9 $ 145.0 7.0 % 7.9 % 4.0 % 4.6 % 1 % 0 % 1 % 2 % 540 503 55 44 38 35 633 582 11,379 10,804 883 713 714 667 12,976 12,184 Net sales for TJX International increased 13% for the thirdsecond quarter and 5% for the nine months ended October 28, 2017 as compared to the same periods last year. The quarterly increase reflects an 8%a 4% increase from new store sales, a 1% increase in same store sales, as well as currency translation that positively impacted sales growth by 4%. The nine-month increase in net sales included an 8% increase from newcomp store sales and a 1%4% increase in samefrom non-comp store sales, which was offset by a negative 4% impact due to currency translation.sales. The increase in samecomp store sales for both periodsthe second quarter was driven by an increase in customer traffic, which was partially offset by a declinedecrease in average basket. All geographies performed in line with the overall comp store sales increase.value offirst six months reflects a 4% increase from non-comp store sales, partially offset by a 2% decrease from comp store sales. The decrease in comp store sales for the first six months was driven by a decrease in average transaction.decreasedincreased to 7.0%8.7% for the thirdsecond quarter of fiscal 20182024 compared to 7.9%2.7% for the same period last year. The increase in segment profit margin for the second quarter of fiscal 2024 was driven by higher merchandise margin, partially offset by higher incentive compensations costs and incremental store wage. Merchandise margin was driven by favorable freight costs, partially offset by lower markon. Thirteen Weeks Ended Twenty-Six Weeks Ended U.S. dollars in millions July 29,
2023July 30,
2022July 29,
2023July 30,
2022Net sales $ 1,223 $ 1,248 $ 2,261 $ 2,330 Segment profit $ 192 $ 197 $ 309 $ 324 Segment profit margin 15.7 % 15.8 % 13.7 % 13.9 % 1 % N/A 1 % N/A Stores in operation at end of period: Winners 299 295 HomeSense 154 150 Marshalls 106 106 Total 559 551 Selling square footage at end of period (in millions): Winners 6 6 HomeSense 3 3 Marshalls 2 2 Total 11 11 Thirteen Weeks Ended Twenty-Six Weeks Ended U.S. dollars in millions July 29,
2023July 30,
2022July 29,
2023July 30,
2022Net sales $ 1,621 $ 1,503 $ 3,034 $ 2,920 Segment profit $ 32 $ 105 $ 70 $ 118 Segment profit margin 2.0 % 7.0 % 2.3 % 4.0 % 3 % N/A 4 % N/A Stores in operation at end of period: T.K. Maxx 636 626 Homesense 79 77 T.K. Maxx Australia 76 71 Total 791 774 Selling square footage at end of period (in millions): T.K. Maxx 13 13 Homesense 1 1 T.K. Maxx Australia 1 1 Total 15 15 nine months ended October 28, 2017 compared to 4.6%same period last year. The decrease for the ninefirst six months ended October 29, 2016. Segment margin for the quarter and nine-month periodof fiscal 2024 was favorably impacted by 1.3 percentage points and 0.5 percentage points, respectively,primarily due to foreign currency, primarilya reserve related to a German government COVID program receivable, and higher administrative costs, incremental store wage and higher incentive compensation costs, partially offset by themark-to-market favorable impact of the inventory derivatives. This improvement in segmenttransactional foreign exchange and higher merchandise margin. Merchandise margin however, was more than offset by higher supply chain costs associated with the opening of a new distribution center, a decline in merchandise margin,reflects strong markon and expense deleverage on the same store sales for the fiscal 2018 third quarter.General corporate expense Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016 $ 95.5 $ 97.9 $ 311.2 $ 291.0 Thirteen Weeks Ended Twenty-Six Weeks Ended In millions July 29,
2023July 30,
2022July 29,
2023July 30,
2022General corporate expense $ 194 $ 188 $ 350 $ 265 Virtually all generalGeneral corporate expenses are primarily included in selling, general and administrativeSG&A expenses. Themark-to-market adjustment of our fuel and inventory hedges is included in cost of sales, including buying and occupancy costs.General corporate expense for the quarter decreased slightly from the same period last year, driven by a reduction in incentive compensation costs. nine-month periodsecond quarter of fiscal 2024 was primarily driven by incremental systemsa contribution to TJX’s U.S. charitable foundation and technologyhigher incentive and share-based compensation costs, as well as lower unrealized gains on our fuel hedges in fiscal 2018 as compared to the same period last year. These increases were partially offset by reducedfavorable mark-to-market adjustments on fuel and inventory hedges.in fiscal 2018.32Analysis of Financial ConditionNet cash provided by operating activities was $1.9 billion for the nine months ended October 28, 2017, a decrease of $0.2 billion from the $2.1 billion provided in the nine months ended October 29, 2016. Net income adjusted fornon-cash items and the early extinguishment of debt for the fiscal 2018 nine-month period, as compared to the first nine months of fiscal 2017, increased cash flows by $60 million. The change in merchandise inventory, net of the related change in accounts payable, resulted in a use of cash of $309 million in the first nine months of fiscal 2018 compared to a use of cash of $234 million in the first nine months of fiscal 2017, which unfavorably impacted year over year cash flows by $75 million. This unfavorable impact on cash flows for the first nine months of fiscal 2018 is attributable in part to additional cash outflows to bring in fresh merchandise for the upcoming holiday season as reflected in the increased inventoryin-transit. The change in accrued expenses and other current liabilities, including income taxes payable, had an unfavorable impact on year over year operating cash flows of $218 million, which was driven by increased payments for incentive compensation, and the timing of payments related to sales taxes and income taxes during the first nine months of fiscal 2018 as compared to the prior year. In addition, the year over year comparison of operating cash flows is favorably impacted by $60 million due to the change in accounting for excess tax benefits related to stock compensation. This year these benefits are included in net income, increasing operating cash flows, whereas last year these benefits were classified as a financing activity.Investing activities in the first nine months of fiscal 2018 reflect property additions for new stores, store improvements and renovations and investment in our home offices and our distribution network (including buying and merchandising systems and information systems). Cash outflows for property additions amounted to $828 million in the quarter ended October 28, 2017 compared to $767 million in the comparable period last year. We anticipate that capital spending for fiscal 2018 will be approximately $1.1 billion. We also purchased $630 million of investments in the first nine months of fiscal 2018 versus $534 million in the comparable prior year period and $658 million of investments were sold or matured in the first nine months of fiscal 2018 versus $432 million in the prior year. This activity primarily related to short-term investments, which had initial maturities in excess of 90 days and, per our policy, are not classified as cash on the consolidated balance sheets presented.Cash flows from financing activities resulted in a net cash outflow of $1.7 billion in the third quarter of fiscal 2018 compared to a net cash outflow of $.9 billion in the same period last year. During the fiscal 2017 third quarter we received net proceeds of $992.5 million from the issuance of $1 billion of 2.25%ten-year notes. A portion of the proceeds were used to redeem our $375 million 6.95% notes prior to their scheduled maturity. The redemption of the notes, including the prepayment penalty, resulted in cash outflows of $426 million. Financing activities include the cash flows relating to our repurchases of our common stock, the exercise of options under our stock incentive plan and the payment of dividends to holders of our common stock. We spent $1.2 billion to repurchase 16.9 million shares of our stock in the first nine months of fiscal 2018 compared to $1.2 billion to repurchase 15.4 million shares in the same period last year. See Note D of Notes to Consolidated Financial Statements for more information. In February 2017, we announced an additional repurchase program authorizing the repurchase of up to an additional $1.0 billion of TJX stock from time to time. We currently plan to repurchase approximately $1.5 billion to $1.8 billion of stock under our stock repurchase programs in fiscal 2018. We determine the timing and amount of repurchases based on our assessment of various factors including excess cash flow,economic and market conditions, our assessment of prospects for our business, legal requirements and other factors. The timing and amount of these purchases may change. Financing activities also included $72 million of proceeds, net of shares repurchased for withholding taxes, related to the exercise of stock options in the third quarter of fiscal 2018 versus $86 million in proceeds, net of shares repurchased for withholding taxes in the same period last year. Dividends paid on common stock in the first nine months of fiscal 2018 were $567 million versus $482 million in the same period last year.Wehave traditionally havebeen funded our working capital requirements, including for seasonal merchandise, primarily through cash generated from operations, supplemented, as needed, by short-term bank borrowings and the issuance of commercial paper. As of October 28, 2017, approximately 60% of our cash was held by our foreign subsidiaries with $249 million held in countries where we have the intention to reinvest any undistributed earnings indefinitely. We have provided for deferred U.S. taxes on all undistributed earnings of our subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong, and Australia. If we repatriate cash from these subsidiaries, we should not incur additional33tax expense, but our cash would be reduced by the amount of taxes paid. For all other foreign subsidiaries,July 29, 2023, there were no income taxes have been provided on the undistributed earnings because such earnings are considered to be indefinitely reinvested in the business. We have no current plans to repatriate cash balances held by such foreign subsidiaries.short-term bank borrowings or commercial paper outstanding. We believe our existing cash and cash equivalents, internally generated funds and our credit facilities, under which facilities we have $1.5 billion available as of the period ended July 29, 2023, as described in Note II—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements, are more than adequate to meet our operating needs overfor the nextforeseeable future.year.Recently Issued Accounting Pronouncementspronouncements,standards, see Note AA—Basis of Presentation and Summary of Significant Accounting Policies in our 2016 Form10-K Annual Report and Note A of Notes to Consolidated Financial Statements included in TJX’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 and Note A—Basis of Presentation and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements in this Quarterly Report on Form10-Q.Forward-looking Statementsinvolveare 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. The followingstatements, including, among others, statements regarding the Company's anticipated operating and financial performance, business plans and prospects, anticipated dividends and share repurchases, plans with respect to long-term indebtedness, and the Company's plans related to, and expected impact of, a pension payout offer. These statements are some oftypically accompanied by the factorswords “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 thethose expressed or implied by such forward-looking statements: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 andexpansion; management of large size and scale; consumer trendsCOVID-19 or other public health and preferences; various marketing efforts; competition; qualitypublic safety issues that affect our operations and availabilityconsumers; merchandise sourcing and transport; data security and maintenance and development of personnel, training and retention;information technology systems; labor costs and workforce challenges; data security; information systemspersonnel recruitment, training and new technology;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; adversemarket instability; severe weather, serious disruptions or unseasonable weather;catastrophic events; disproportionate impact of disruptions in the second half of the fiscal year; serious disruptions or catastrophic events; corporatecommodity availability and retail banner reputation; quality, safety and other issues with merchandise;pricing; fluctuations in currency exchange rates; compliance with laws, regulations and orders and changes in laws, regulations and applicable accounting standards; expanding international operations; sourcing and moving merchandise internationally; commodity availability and pricing or increases in utility, transportation or logistics costs; fluctuations in currency exchange rates; fluctuations in quarterly operating results and market expectations; mergers, acquisitions, or business investments, divestitures, closings or business consolidations; outcomes of litigation, legal proceedings and other legal or regulatory matters; quality, safety and other issues with our merchandise; tax matters; real estate activities; cash flow 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 Form10-K filed with the SecuritiesSEC. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and Exchange Commission.other risks and uncertainties. We caution investors, potential investors and others not to place considerable reliance on the forward-looking statements contained in this Form 10-Q. The forward-looking statements in this report speak only as of the date of this Form 10-Q, 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.
Risk
Procedures
34
Not applicable
Factors
Information on Share Repurchases
Proceeds
Total Number of Shares Repurchased(1) | Average Price Paid Per Share(2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(3) | |||||||||||||
July 30, 2017 through August 26, 2017 | 1,271,053 | $ | 70.82 | 1,271,053 | $ | 1,800,767,834 | ||||||||||
August 27, 2017 through September 30, 2017 | 1,990,306 | $ | 72.85 | 1,990,306 | $ | 1,655,779,813 | ||||||||||
October 1, 2017 through October 28, 2017 | 1,598,429 | $ | 71.95 | 1,598,429 | $ | 1,540,779,792 | ||||||||||
|
|
|
| |||||||||||||
Total: | 4,859,788 | 4,859,788 |
35
Total Number of Shares Repurchased(a) | Average Price Paid Per Share(b) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(c) | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(c) | |||||||||||
April 30, 2023 through May 27, 2023 | 1,215,308 | $ | 78.17 | 1,215,308 | $ | 2,948,794,011 | ||||||||
May 28, 2023 through July 1, 2023 | 3,045,032 | $ | 80.46 | 3,045,032 | $ | 2,703,795,615 | ||||||||
July 2, 2023 through July 29, 2023 | 2,463,325 | $ | 85.25 | 2,463,325 | $ | 2,493,795,699 | ||||||||
Total | 6,723,665 | 6,723,665 |
Incorporate by Reference | ||||||||||||||||||||||||
Exhibit No. | Description | Form | Exhibit No. | Filing Date | ||||||||||||||||||||
10.1 | ||||||||||||||||||||||||
31.1 | ||||||||||||||||||||||||
31.2 | ||||||||||||||||||||||||
32.1 | ||||||||||||||||||||||||
32.2 | ||||||||||||||||||||||||
101 | The following materials from The TJX Companies, Inc.’s Quarterly Report on Form10-Q for the quarter ended | |||||||||||||||||||||||
104 | The cover page from The TJX Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 29, 2023, formatted in Inline XBRL (included in Exhibit 101) |
36
|
Date: November 28, 2017
| THE TJX COMPANIES, INC. | |||||||||||||
(Registrant) | ||||||||||||||
Date: August 25, 2023 | ||||||||||||||
/s/ John Klinger | ||||||||||||||
John Klinger, Chief Financial Officer | ||||||||||||||
(Principal Financial and Accounting Officer) |
37
Exhibit Index
38