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    TJX Companies Inc (TJX)

    Business Description

    The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the United States and worldwide, operating over 4,900 stores across nine countries and three continents. The company offers a wide range of products, including family apparel, footwear, accessories, and home fashions, with a business model that emphasizes providing quality, fashionable, brand name, and designer merchandise at prices generally 20% to 60% below full-price retailers' regular prices, creating a "treasure hunt" shopping experience . Apparel, including clothing and footwear, accounted for 47% of consolidated revenues in fiscal 2024, while accessories, including jewelry and beauty, contributed 18%, and home fashions made up 35% of revenues .

    1. Marmaxx - Operates TJ Maxx and Marshalls stores in the U.S., offering a wide range of family apparel, footwear, and accessories.
    2. HomeGoods - Focuses on home fashions, providing a variety of home decor and furnishings.
    3. TJX Canada - Manages the company's retail operations in Canada, offering similar off-price merchandise as in the U.S.
    4. TJX International - Oversees the company's retail presence in countries outside the U.S. and Canada, delivering off-price apparel and home fashions.

    Q3 2025 Summary

    Initial Price$113.07August 2, 2024
    Final Price$112.39November 2, 2024
    Price Change$-0.68
    % Change-0.60%

    What went well

    • Strong performance and profitability improvements in the HomeGoods segment: TJX reported significant margin improvements in HomeGoods, driven by expense efficiencies and freight favorability. Management expressed confidence in their home business margins and the continued growth of the HomeGoods segment.
    • Expansion into new international markets provides growth opportunities: TJX announced plans to expand its T.K. Maxx banner into Spain, with expectations to open more than 100 stores long term. Additionally, the company is leveraging joint ventures and investments to gain exposure in Mexico, the UAE, Saudi Arabia, and beyond, without diverting focus from core businesses. ,
    • Ability to perform well in various economic environments: Management highlighted TJX's consistent performance regardless of economic conditions, emphasizing that the company trades well in both pressured and healthy backdrops due to its strong value proposition.

    What went wrong

    • The strong 7% comp sales increase in Europe during the third quarter may not be sustainable, as it was partly driven by favorable weather conditions that may not continue, potentially leading to normalization or decline in future comp sales growth.
    • The company is not providing guidance on margin expansion opportunities or challenges for the next fiscal year, indicating potential uncertainties or lack of visibility into future profitability.
    • The company anticipates freight headwinds in the fourth quarter, which could negatively impact gross margin or profitability. Additionally, potential tariffs and supply chain issues could pose risks to costs and inventory availability, despite the company's confidence in managing these risks.

    Q&A Summary

    1. Margin Outlook
      Q: What are your thoughts on margin expansion opportunities or challenges in 2025?
      A: Management is not providing specific guidance for next year but reaffirmed that on a 3% to 4% comp, they can achieve margins flat to up 10 basis points, assuming no outsized expense increases and some merchandise margin improvement. They emphasized that the biggest lever for margin expansion is top-line growth ,.

    2. Impact of Potential Tariffs
      Q: How could potential tariffs on imports from China affect your business?
      A: Management stated they're well-positioned to handle potential tariffs, emphasizing their priority to maintain the value gap between their goods and competitors. They have diversified away from China over the years, and direct imports from China represent a very small portion of their business. Potential tariffs could also present an opportunity to acquire additional inventory at advantageous prices.

    3. Consumer Behavior and Demographics
      Q: Have you observed any changes in consumer behavior or customer demographics recently?
      A: They noted no significant change in their view of the consumer by income or age demographic. They continue to attract more customers in the 18 to 34 age range, which is positive for the long-term health of the business. Their strategy remains to trade broadly across all income and age groups ,.

    4. Home Segment Performance
      Q: Can you discuss the performance and profitability improvement in your HomeGoods segment?
      A: Management is bullish on their Home business, reporting strong health across geographies. The HomeGoods segment saw a 200 basis point improvement in margin, attributed to the closure of homegoods.com, expense efficiencies, and freight favorability. They believe their unique, eclectic merchandise approach sets them apart from competitors.

    5. International Expansion and Comps
      Q: What are your plans for international expansion, and how did your international comps perform?
      A: They're expanding internationally, including entering new markets like Spain, leveraging experienced talent without risking core businesses. They reported strong comps in both Europe and Australia, driven by excellent execution and favorable weather, though they don't expect to maintain 7% comps consistently as weather benefits normalize , ,.

    6. Drivers of Merchandise Margin Expansion
      Q: What drove the merchandise margin expansion in the third quarter?
      A: Margin expansion was primarily due to improvements in the merchandise margin line and expense savings in distribution centers. Effective inventory management led to reduced processing costs, with inventories down in DCs and up in stores.

    7. Marmaxx Performance
      Q: How did Marmaxx comps perform, and what is your outlook?
      A: Marmaxx started the quarter strong but was impacted by unseasonably warm weather and hurricanes, which pulled down comps. However, they're feeling extremely positive as Q4 starts strong, with weather normalizing and holiday merchandise contributing positively ,.

    8. Performance of Other Categories
      Q: How are categories like Beauty, Consumables, Footwear, and Accessories performing?
      A: Management highlighted strong performance in consumable categories, viewing them as traffic builders that enhance visit frequency. They offer exceptional value in these areas, which are considered extreme value categories due to high retail markups elsewhere.

    Key Metrics

    View all financials →
    Revenue by Segment - in Millions of USDFY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024FY 2024Q1 2025Q2 2025Q3 2025
    Marmaxx7,3667,9038,10710,03733,4137,7508,4458,438
    HomeGoods1,9662,0112,2082,8058,9902,0792,1012,355
    TJX Canada1,0381,2231,3171,4685,0461,1131,2441,382
    TJX Europe--------
    TJX International1,4131,6211,6332,1016,7681,5371,6781,888
    - Clothing including footwear--------
    - Jewelry and accessories--------
    - Home fashions--------
    Total Revenue11,78312,75813,26516,41154,21712,47913,46814,063
    Revenue by Geography - in Millions of USDFY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024FY 2024Q1 2025Q2 2025Q3 2025
    United States9,332-10,315-42,2879,82910,54610,793
    - Marmaxx7,3667,903---7,750-8,438
    - HomeGoods1,9662,011---2,079-2,355
    Canada1,0381,2231,3171,3014,8791,1131,2441,382
    International1,4131,6211,633--1,5371,6781,888
    - Europe----6,506---
    - Australia----542---
    Total Revenue11,78312,75813,26516,41154,21712,47913,46814,063
    KPIs - Metric (Unit: Percentage [%])FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024FY 2024Q1 2025Q2 2025Q3 2025
    Overall Comparable Store Sales3%6%6%5%-3%4%3%

    Executive Team

    NamePositionStart DateShort Bio
    Kenneth CanestrariSenior Executive Vice President, Group PresidentSeptember 2014Kenneth Canestrari has been with TJX since 1988, holding various financial positions until 2008. He served as President of HomeGoods from 2012 to September 2014 and as Executive Vice President, Chief Operating Officer of HomeGoods from 2008 until 2012 .
    Louise GreenleesSenior Executive Vice President, Group PresidentJune 2022Louise Greenlees served as President of TJX Europe from January 2015 to June 2022. Her previous positions include Managing Director of TJX Europe from January 2014 to January 2015, Group Buying Director of TJX Europe from April 2013 to January 2014, and Homesense Managing Director from December 2010 to April 2013 .
    Ernie HerrmanChief Executive Officer and PresidentJanuary 2016Ernie Herrman has been the Chief Executive Officer of TJX since January 2016 and a director since October 2015. He has also served as President since January 2011. He was the Senior Executive Vice President, Group President from August 2008 to January 2011 .
    John KlingerSenior Executive Vice President and Chief Financial OfficerFebruary 2024 (expected)John Klinger has held the position of Chief Financial Officer since January 2023 and was promoted to Senior Executive Vice President in February 2024. He served as Executive Vice President, Corporate Controller from 2019 to January 2023 and has been with TJX in various financial roles since joining the company in 2000 .
    Carol MeyrowitzExecutive Chairman of the BoardJanuary 2016Carol Meyrowitz has been the Executive Chairman of the Board at TJX since January 2016. She has served as a director since September 2006. She was the Chairman of the Board from June 2015 to January 2016 and the Chief Executive Officer of TJX from January 2007 to January 2016 .
    Douglas MizziSenior Executive Vice President, Group PresidentFebruary 2018Douglas Mizzi was the President of TJX Canada from October 2011 to February 2018. He also held the position of Managing Director at T.K. Maxx, UK from April 2010 to October 2011. His career at TJX began in 1988, where he has held various store operations positions .

    Questions to Ask Management

    1. In your guidance, you mentioned that you are not flowing through the entire third quarter earnings per share beat of $0.06 to the full year because you expect $0.02 of timing expenses benefit in the third quarter to reverse out in the fourth quarter . Can you provide more detail on these timing expenses and explain what gives you confidence there won't be additional unexpected costs impacting fourth-quarter profitability?

    2. You've announced plans to expand your T.K. Maxx banner into Spain, expecting the first stores to open in early 2026 with the potential for over 100 stores long term . Considering the competitive retail market in Spain, what challenges do you foresee with this expansion, and how do you plan to leverage your existing European infrastructure to ensure success?

    3. With your recent joint venture with Grupo Axo and investment in Brands For Less, you're entering new markets such as Mexico, the UAE, and Saudi Arabia . What strategic risks do you anticipate in these diverse markets, and how will you adapt your off-price model to different consumer behaviors and regulatory environments?

    4. You noted that balance sheet inventory was up 1%, but inventory on a per-store basis was down 2% due to lower holdings at distribution centers . Given the importance of fresh merchandise flow, how are you managing the risk of potential stockouts during the crucial holiday season?

    5. Regarding potential tariffs on imports from countries like China, you've mentioned your limited direct import exposure and prior diversification efforts . How might escalating trade tensions impact your supply chain costs and value proposition, and what further steps are you taking to mitigate these risks?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateFebruary 2024
    End Date/DurationN/A
    Total additional amount$2.5 billion
    Remaining authorization amount$1.9 billion
    DetailsN/A

    Past Guidance

    Q3 2025 Earnings Call

    • Issued Period: Q3 2025
    • Guided Period: Q4 2025 and FY 2025

    Fourth Quarter Guidance (Q4 2025):

    • Comp Store Sales Growth: 2% to 3%
    • Consolidated Sales: $15.9 billion to $16.1 billion
    • Pretax Profit Margin: 10.8% to 10.9%
    • Gross Margin: 29.4% to 29.5%
    • SG&A: 18.8%
    • Net Interest Income: $35 million
    • Tax Rate: 26.0%
    • Weighted Average Share Count: 1.14 billion shares
    • Diluted Earnings Per Share: $1.12 to $1.14

    Full Year Guidance (FY 2025):

    • Comp Store Sales Growth: 3%
    • Consolidated Sales: $55.9 billion to $56.1 billion
    • Pretax Profit Margin: 11.3%
    • Gross Margin: 30.3%
    • SG&A: 19.3%
    • Net Interest Income: $174 million
    • Tax Rate: 25%
    • Weighted Average Share Count: 1.14 billion shares
    • Diluted Earnings Per Share: $4.15 to $4.17 .

    Q2 2025 Earnings Call

    • Issued Period: Q2 2025
    • Guided Period: Q3 2025 and FY 2025

    Third Quarter Guidance (Q3 2025):

    • Comp Store Sales Growth: 2% to 3%
    • Consolidated Sales: $13.9 billion to $14 billion
    • Pretax Profit Margin: 11.8% to 11.9%
    • Gross Margin: 31.1% to 31.2%
    • SG&A: 19.5%
    • Net Interest Income: $34 million
    • Tax Rate: 26%
    • Weighted Average Share Count: 1.14 billion shares
    • Diluted Earnings Per Share: $1.06 to $1.08

    Full Year Guidance (FY 2025):

    • Comp Store Sales: 3%
    • Consolidated Sales: $55.8 billion to $56.1 billion
    • Pretax Profit Margin: 11.2%
    • Gross Margin: 30.2%
    • SG&A: 19.3%
    • Net Interest Income: $160 million
    • Tax Rate: 25.2%
    • Weighted Average Share Count: 1.14 billion shares
    • Diluted Earnings Per Share: $4.09 to $4.13 .

    Q1 2025 Earnings Call

    • Issued Period: Q1 2025
    • Guided Period: Q2 2025 and FY 2025

    Second Quarter Guidance (Q2 2025):

    • Comp Store Sales: 2% to 3%
    • Consolidated Sales: $13.2 billion to $13.3 billion
    • Pretax Profit Margin: 10.4% to 10.5%
    • Gross Margin: 29.8%
    • SG&A: 19.6%
    • Net Interest Income: $42 million
    • Tax Rate: 26.3%
    • Weighted Average Share Count: 1.14 billion shares
    • Diluted Earnings Per Share: $0.88 to $0.90

    Full Year Guidance (FY 2025):

    • Consolidated Sales: $55.5 billion to $55.9 billion
    • Comparable Store Sales: 2% to 3%
    • Pretax Profit Margin: 11% to 11.1%
    • Gross Margin: 30% to 30.1%
    • SG&A: 19.3%
    • Net Interest Income: $156 million
    • Tax Rate: 25.4%
    • Weighted Average Share Count: 1.14 billion shares
    • Diluted Earnings Per Share: $4.03 to $4.09 .

    Q4 2024 Earnings Call

    • Issued Period: Q4 2024
    • Guided Period: Q1 2025 and FY 2025

    First Quarter Guidance (Q1 2025):

    • Comp Store Sales Growth: 2% to 3%
    • Consolidated Sales: $12.4 billion to $12.5 billion
    • Pretax Profit Margin: 10.5% to 10.6%
    • Gross Margin: 29.8%
    • SG&A: 19.5%
    • Net Interest Income: $37 million
    • Tax Rate: 25.8%
    • Earnings Per Share (EPS): $0.84 to $0.86

    Full Year Guidance (FY 2025):

    • Comp Store Sales Growth: 2% to 3%
    • Consolidated Sales: $55.6 billion to $56.1 billion
    • Pretax Profit Margin: 10.9% to 11%
    • Gross Margin: 30% to 30.1%
    • SG&A: 19.3%
    • Net Interest Income: $118 million
    • Tax Rate: 26.0%
    • Weighted Average Share Count: 1.14 billion shares
    • Earnings Per Share (EPS): $3.94 to $4.02
    • Capital Expenditures: $2 billion to $2.1 billion
    • New Stores: About 141 net new stores
    • Dividend: Increase by 13% to $0.375 per share
    • Stock Buyback: $2 billion to $2.5 billion .

    Latest news

    Recent developments and announcements about TJX.

    Financial Reporting

      Earnings Call

      ·
      Nov 20, 2024, 9:58 PM

      The recent earnings call for TJX provided several key insights into the company's performance and future outlook. Here are the main points:

      1. Revenue and Profit Performance: TJX reported a consolidated comp sales increase of 3% for the third quarter, driven entirely by customer transactions. The pretax profit margin was 12.3%, up 30 basis points from the previous year, and diluted earnings per share were $1.14, an 11% increase from last year .

      2. Management’s Forward Guidance: For the fourth quarter, TJX expects comp store sales growth of 2% to 3%, with consolidated sales between $15.9 billion and $16.1 billion. The pretax profit margin is projected to be between 10.8% and 10.9%, and gross margin is expected to be between 29.4% and 29.5% . For the full year, they anticipate consolidated sales of $55.9 billion to $56.1 billion, with a pretax profit margin of 11.3% .

      3. Market Conditions and Strategic Initiatives: TJX is expanding its T.K. Maxx banner in Spain, with plans to open more than 100 stores in the long term. They are also focusing on being a year-round gifting destination and plan to continue flowing fresh merchandise to stores and online multiple times a week .

      4. Analyst Questions and Management Responses: Analysts inquired about the consumer outlook and margin expansion opportunities. Management noted no significant change in consumer behavior and emphasized their strategy of attracting younger customers while maintaining a broad demographic appeal. They also highlighted the importance of top-line growth as a key lever for margin expansion .

      5. Significant Comments on Market Conditions: The company is confident in its ability to gain additional market share in both the European and Australian retail markets. They also noted strong performance in their HomeGoods segment, attributing improvements to strategic changes and favorable market conditions .

      Overall, TJX appears to be in a strong position with a solid growth strategy and a focus on expanding its market presence internationally while maintaining robust financial performance.

      Earnings Report

      ·
      Nov 20, 2024, 2:23 PM

      TJX Companies, Inc. Q3 FY25 Earnings Results

      Date: November 20, 2024

      **Key Highlights: **

      • Net Sales: $14.1 billion, a 6% increase compared to Q3 FY24 .
      • Comparable Store Sales: Increased by 3%, driven entirely by an increase in customer transactions .
      • Net Income: $1.3 billion, with diluted earnings per share (EPS) of $1.14, up 11% from $1.03 in Q3 FY24 .
      • Pretax Profit Margin: 12.3%, up 0.3 percentage points from last year and above the company's plan .
      • Cash and Shareholder Distributions: Returned $997 million to shareholders through share repurchases and dividends in Q3 .
      • Full Year FY25 Outlook: Increased guidance for pretax profit margin to 11.3% and raised diluted EPS outlook to $4.15 to $4.17 .

      **Significant Trends: **

      • Customer Transactions: The increase in comparable store sales was driven by higher customer transactions, indicating strong customer engagement and satisfaction .
      • International Performance: The European team delivered strong results, contributing to a 7% comp increase in the TJX International division .
      • Investments: Completed investments in a joint venture with Grupo Axo and a minority equity stake in Brands For Less, expanding TJX's presence in Mexico and the Middle East .
      • Store Expansion: Increased store count by 56 stores to a total of 5,057 stores, with a 1.1% increase in square footage .

      **CEO Comments: ** Ernie Herrman, CEO and President, expressed satisfaction with the Q3 results, highlighting the strong execution of off-price business fundamentals and the appeal of TJX's value proposition to a wide range of customers. He also noted the company's excitement for the holiday selling season and confidence in future growth opportunities .

      **Financial Summary: **

      • Net Sales: $14,063 million (Q3 FY25) vs. $13,265 million (Q3 FY24) .
      • Net Income: $1,297 million (Q3 FY25) vs. $1,191 million (Q3 FY24) .
      • Diluted EPS: $1.14 (Q3 FY25) vs. $1.03 (Q3 FY24) .
      • Cash and Cash Equivalents: $4,718 million as of November 2, 2024 .
      • Total Assets: $32,436 million as of November 2, 2024 .

      For more detailed financial information, visit the Investors section at TJX.com .