The TJX Companies, Inc. Reports Q1 FY23 Results; Marmaxx Comp Store Sales Increased 3%
The TJX Companies, Inc. reported a first-quarter net sales increase of 13%, reaching $11.4 billion for FY23. U.S. comp store sales were flat, while adjusted diluted earnings per share rose to $0.68, despite a $0.19 impairment charge from its investment in Familia. The company raised its adjusted pretax margin outlook to 9.6% to 9.8% and returned $907 million to shareholders via buybacks and dividends. Although customer traffic drove a 3% increase in Marmaxx comp store sales, HomeGoods experienced a 7% decline. TJX continues to project full-year diluted earnings per share between $2.94 and $3.01.
- Net sales increased by 13% to $11.4 billion in Q1 FY23.
- Adjusted diluted EPS rose to $0.68, exceeding company plans.
- Adjusted pretax margin outlook increased to 9.6%-9.8% for FY23.
- Returned $907 million to shareholders through buybacks and dividends.
- U.S. comparable store sales growth rounded down to flat.
- HomeGoods saw a 7% decline in comp store sales.
-
Q1 FY23 GAAP pretax margin of
7.5% -
Q1 FY23 adjusted pretax margin of
9.4% , which excludes a 1.9 percentage point charge related to a write-down of the Company’s minority investment in Familia, was above the Company’s plans -
FY23 GAAP pretax margin outlook of
9.2% to9.4% ; increasing FY23 adjusted pretax margin outlook to9.6% to9.8% -
Q1 FY23 Marmaxx comp store sales increased
3% over a12% open-only comp store sales increase last year - Q1 Marmaxx comp increase driven by customer traffic
-
Q1 FY23
U.S. comp store sales growth rounded down to flat over a17% U.S. open-only comp store sales increase last year -
Q1 FY23 GAAP diluted earnings per share were
$.49 -
Q1 FY23 adjusted diluted earnings per share of
$.68 , which excludes a$.19 charge related to a write-down of the Company’s minority investment in Familia, was above the Company’s plans -
Returned
$907 million
CEO and President Comments
The Company’s
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First Quarter
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First Quarter
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Marmaxx3 |
+ |
+ |
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- |
+ |
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Total |
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+ |
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1Comparable store sales exclude e-commerce sites (tjmaxx.com, marshalls.com, homegoods.com, and sierra.com). 2This measure reports the sales increase or decrease of these stores for the days they were open in the first quarter of Fiscal 2022 against sales of those stores for the same days in Fiscal 2020, prior to the emergence of the COVID-19 global pandemic. 3Combination of
The Company’s net sales by division in the first quarter of Fiscal 2023 were as follows:
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First Quarter |
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FY2023 |
FY2022 |
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Marmaxx ( |
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|
Total |
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TJX Canada |
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TJX |
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1Net sales in
Margins
For the first quarter of Fiscal 2023, the Company’s consolidated pretax profit margin was
Gross profit margin for the first quarter of Fiscal 2023 was
Inventory
Total inventories as of
Cash and Shareholder Distributions
For the first quarter of Fiscal 2023, the Company used
During the first quarter, the Company returned a total of
Commitment to Divest from Familia
On
Second Quarter, Full Year, and Second Half Fiscal 2023 Outlook
For the start of the second quarter, the Company is pleased with its sales trends. For the second quarter of Fiscal 2023, the Company is planning
For the full year Fiscal 2023, the Company now expects
The Company’s full year Fiscal 2023 outlook implies a
Stores by Concept
During the first quarter ended
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Store Locations1 |
Gross Square Feet2 |
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|
First Quarter FY2023 |
First Quarter FY2023 |
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|
|
(in millions) |
|||
|
Beginning |
End |
Beginning |
End |
|
In the |
|
|
|
|
|
|
1,284 |
1,285 |
35.0 |
35.0 |
|
Marshalls |
1,148 |
1,155 |
32.7 |
32.8 |
|
|
850 |
859 |
19.8 |
20.0 |
|
Sierra |
59 |
60 |
1.2 |
1.3 |
|
Homesense |
39 |
39 |
1.0 |
1.0 |
|
In |
|
|
|
|
|
Winners |
293 |
293 |
8.0 |
8.0 |
|
HomeSense |
147 |
148 |
3.4 |
3.4 |
|
Marshalls |
106 |
106 |
2.8 |
2.8 |
|
In |
|
|
|
|
|
|
618 |
623 |
17.3 |
17.4 |
|
Homesense |
77 |
77 |
1.5 |
1.5 |
|
In |
|
|
|
|
|
|
68 |
70 |
1.5 |
1.5 |
|
|
|
|
|
|
|
TJX |
4,689 |
4,715 |
124.2 |
124.7 |
|
1Store counts above include both banners within a combo or a superstore.
2Square feet figures may not foot due to rounding.
Fiscal 2023 U.S. Comparable Store Sales
For Fiscal 2023, the Company returned to its historical definition of comparable store sales. While stores in the
Fiscal 2022 Open-Only Comp Store Sales
Due to the temporary closing of stores as a result of the COVID-19 global pandemic, the Company’s historical definition of comp store sales was not applicable in Fiscal 2022. In order to provide a performance indicator for its stores, the Company temporarily reported open-only comp store sales. The Company’s open-only comp store sales calculation includes stores initially classified as comp stores at the beginning of Fiscal 2021. This measure reports the sales increase or decrease of these stores for the days the stores were open in Fiscal 2022 against sales for the same days in Fiscal 2020, prior to the emergence of the global pandemic.
Global Corporate Responsibility
In the first quarter of Fiscal 2023, the Company announced four new environmental sustainability goals that expanded and accelerated the Company’s previous environmental commitments. These new goals further demonstrate the Company’s continued commitment to pursuing initiatives that are environmentally responsible and smart for business.
As part of the Company’s global environmental sustainability efforts, the Company is aiming to:
- Achieve net zero greenhouse gas (GHG) emissions in its operations by 2040
-
Source
100% renewable energy in its operations by 2030 -
Divert
85% of its operational waste from landfill by 2027 -
Shift
100% of the packaging for products developed in-house by its product design team to be reusable, recyclable, or contain sustainable materials by 2030
More information about the Company’s environmental sustainability efforts, including progress toward its previously set global science-based GHG emissions reduction target, is available at www.tjx.com/responsibility/environment/.
About
First Quarter Fiscal 2023 Earnings Conference Call
At
Important Information at Website
Archived versions of the Company’s conference calls are available in the Investors section of TJX.com after they are no longer available by telephone, as are reconciliations of non-GAAP financial measures to GAAP financial measures and other financial information. The Company routinely posts information that may be important to investors in the Investors section at TJX.com. The Company encourages investors to consult that section of its website regularly.
Forward-looking Statement
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Various statements made in this release are forward-looking and involve a number of risks and uncertainties. All statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements, including, among others, statements regarding the Company’s anticipated operating and financial performance, business plans and prospects, dividends and share repurchases, and fiscal 2023 outlook. The following are some of the factors that could cause actual results to differ materially from the forward-looking statements: the ongoing COVID-19 pandemic and associated containment and remediation efforts; execution of buying strategy and inventory management; various marketing efforts; customer trends and preferences; competition; operational and business expansion; management of large size and scale; merchandise sourcing and transport; labor costs and workforce challenges; personnel recruitment, training and retention; data security and maintenance and development of information technology systems; corporate and retail banner reputation; cash flow; expanding international operations; fluctuations in quarterly operating results and market expectations; mergers, acquisitions, or business investments and divestitures, closings or business consolidations; real estate activities; inventory or asset loss; economic conditions and consumer spending; market instability; serious disruptions or catastrophic events; disproportionate impact of disruptions in the second half of the fiscal year; commodity availability and pricing; adverse or unseasonable weather; fluctuations in currency exchange rates; compliance with laws, regulations and orders and changes in laws, regulations and applicable accounting standards; outcomes of litigation, legal proceedings and other legal or regulatory matters; quality, safety and other issues with our merchandise; tax matters; and other factors that may be described in our filings with the
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||||||||||
Financial Summary |
||||||||||
(Unaudited) |
||||||||||
(In Thousands Except Per Share Amounts) |
||||||||||
|
Thirteen Weeks Ended |
|||||||||
|
|
|
||||||||
|
|
|
||||||||
Net sales |
$ |
11,406,474 |
$ |
10,086,661 |
||||||
|
|
|
||||||||
Cost of sales, including buying and occupancy costs |
|
8,223,213 |
|
7,255,635 |
||||||
Selling, general and administrative expenses |
|
2,094,582 |
|
2,064,992 |
||||||
Impairment on equity investment |
|
217,619 |
|
— |
||||||
Interest expense, net |
|
18,785 |
|
44,688 |
||||||
|
|
|
||||||||
Income before income taxes |
|
852,275 |
|
721,346 |
||||||
Provision for income taxes |
|
264,802 |
|
187,416 |
||||||
|
|
|
||||||||
Net income |
$ |
587,473 |
$ |
533,930 |
||||||
|
|
|
||||||||
Diluted earnings per share |
$ |
0.49 |
$ |
0.44 |
||||||
|
|
|
||||||||
Cash dividends declared per share |
$ |
0.295 |
$ |
0.26 |
||||||
|
|
|
||||||||
Weighted average common shares – diluted |
|
1,189,263 |
|
1,221,517 |
||||||
Condensed Balance Sheets |
||||||||||
(Unaudited) |
||||||||||
(In Millions) |
||||||||||
|
|
|
||||||||
|
|
|
||||||||
Assets: |
|
|
||||||||
Current assets: |
|
|
||||||||
Cash and cash equivalents |
$ |
4,295.1 |
$ |
8,775.5 |
||||||
Accounts receivable and other current assets |
|
1,141.7 |
|
1,061.7 |
||||||
Merchandise inventories |
|
6,989.8 |
|
5,114.6 |
||||||
Federal, state and foreign income taxes recoverable |
|
53.7 |
|
64.2 |
||||||
|
|
|
||||||||
Total current assets |
|
12,480.3 |
|
15,016.0 |
||||||
|
|
|
||||||||
Net property at cost |
|
5,289.2 |
|
5,067.8 |
||||||
|
|
|
||||||||
Operating lease right of use assets |
|
9,066.9 |
|
9,121.6 |
||||||
|
|
96.9 |
|
99.3 |
||||||
Other assets |
|
776.7 |
|
996.7 |
||||||
|
|
|
||||||||
Total Assets |
$ |
27,710.0 |
$ |
30,301.4 |
||||||
|
|
|
||||||||
Liabilities and Shareholders' Equity: |
|
|
||||||||
Current liabilities: |
|
|
||||||||
Accounts payable |
$ |
4,370.6 |
$ |
4,433.3 |
||||||
Accrued expenses and other current liabilities |
|
4,072.4 |
|
3,823.1 |
||||||
Current portion of operating lease liabilities |
|
1,575.6 |
|
1,650.6 |
||||||
|
|
|
||||||||
Total current liabilities |
|
10,018.6 |
|
9,907.0 |
||||||
|
|
|
||||||||
Other long-term liabilities |
|
908.9 |
|
1,033.2 |
||||||
Non-current deferred income taxes, net |
|
54.1 |
|
33.9 |
||||||
Long-term operating lease liabilities |
|
7,777.2 |
|
7,853.2 |
||||||
Long-term debt |
|
3,355.8 |
|
5,334.9 |
||||||
|
|
|
||||||||
Shareholders’ equity |
|
5,595.4 |
|
6,139.2 |
||||||
|
|
|
||||||||
Total Liabilities and Shareholders' Equity |
$ |
27,710.0 |
$ |
30,301.4 |
||||||
|
|
|
||||||||
Condensed Statements of Cash Flows |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In Millions) |
|||||||||||||||
|
Thirteen Weeks Ended |
||||||||||||||
|
|
|
|||||||||||||
Cash flows from operating activities: |
|
|
|||||||||||||
Net income |
$ |
587.5 |
$ |
533.9 |
|||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
|
219.6 |
|
215.4 |
|||||||||||
Impairment on equity investment |
|
217.6 |
|
— |
|||||||||||
Deferred income tax provision (benefit) |
|
11.5 |
|
(16.2) |
|||||||||||
Share-based compensation |
|
27.3 |
|
50.5 |
|||||||||||
Changes in assets and liabilities: |
|
|
|||||||||||||
(Increase) in accounts receivable and other assets |
|
(98.6) |
|
(144.7) |
|||||||||||
(Increase) in merchandise inventories |
|
(1,085.3) |
|
(750.6) |
|||||||||||
Decrease (increase) in income taxes recoverable |
|
60.8 |
|
(27.9) |
|||||||||||
(Decrease) in accounts payable |
|
(52.8) |
|
(410.2) |
|||||||||||
(Decrease) increase in accrued expenses and other liabilities |
|
(487.8) |
|
216.0 |
|||||||||||
(Decrease) in net operating lease liabilities |
|
(3.9) |
|
(50.3) |
|||||||||||
Other, net |
|
(30.4) |
|
(48.6) |
|||||||||||
Net cash (used in) operating activities |
|
(634.5) |
|
(432.7) |
|||||||||||
|
|
|
|||||||||||||
Cash flows from investing activities: |
|
|
|||||||||||||
Property additions |
|
(314.4) |
|
(225.3) |
|||||||||||
Purchase of investments |
|
(15.6) |
|
(7.3) |
|||||||||||
Sales and maturities of investments |
|
5.5 |
|
7.7 |
|||||||||||
Net cash (used in) investing activities |
|
(324.5) |
|
(224.9) |
|||||||||||
|
|
|
|||||||||||||
Cash flows from financing activities: |
|
|
|||||||||||||
Payments on debt |
|
— |
|
(750.0) |
|||||||||||
Payments for repurchase of common stock |
|
(607.2) |
|
— |
|||||||||||
Cash dividends paid |
|
(309.5) |
|
(315.2) |
|||||||||||
Proceeds from issuance of common stock |
|
18.1 |
|
36.5 |
|||||||||||
Other |
|
(32.5) |
|
(24.4) |
|||||||||||
Net cash (used in) financing activities |
|
(931.1) |
|
(1,053.1) |
|||||||||||
|
|
|
|||||||||||||
Effect of exchange rate changes on cash |
|
(41.6) |
|
16.6 |
|||||||||||
|
|
|
|||||||||||||
Net (decrease) in cash and cash equivalents |
|
(1,931.7) |
|
(1,694.1) |
|||||||||||
Cash and cash equivalents at beginning of year |
|
6,226.8 |
|
10,469.6 |
|||||||||||
|
|
|
|||||||||||||
Cash and cash equivalents at end of period |
$ |
4,295.1 |
$ |
8,775.5 |
|||||||||||
Selected Information by Major Business Segment |
||||||||||
(Unaudited) |
||||||||||
(In Thousands) |
||||||||||
|
Thirteen Weeks Ended |
|||||||||
|
|
|
||||||||
Net sales: |
|
|
||||||||
In |
|
|
||||||||
Marmaxx |
$ |
6,872,270 |
$ |
6,640,486 |
||||||
|
|
2,035,785 |
|
2,141,756 |
||||||
TJX Canada |
|
1,081,528 |
|
765,536 |
||||||
|
|
1,416,891 |
|
538,883 |
||||||
Total net sales |
$ |
11,406,474 |
$ |
10,086,661 |
||||||
|
|
|
||||||||
Segment profit (loss): |
|
|
||||||||
In |
|
|
||||||||
Marmaxx |
$ |
904,222 |
$ |
824,855 |
||||||
|
|
121,985 |
|
251,602 |
||||||
TJX Canada |
|
126,618 |
|
71,577 |
||||||
|
|
13,232 |
|
(221,558) |
||||||
Total segment profit |
|
1,166,057 |
|
926,476 |
||||||
|
|
|
||||||||
General corporate expense |
|
77,378 |
|
160,442 |
||||||
Impairment on equity investment |
|
217,619 |
|
— |
||||||
Interest expense, net |
|
18,785 |
|
44,688 |
||||||
Income before income taxes |
$ |
852,275 |
$ |
721,346 |
||||||
Notes to Consolidated Condensed Statements
1. During the first quarter ended
2. During the quarter ended
View source version on businesswire.com: https://www.businesswire.com/news/home/20220517006250/en/
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Source:
FAQ
What were the FY23 Q1 net sales for TJX?
How much did TJX return to shareholders in Q1 FY23?
What is the adjusted diluted EPS for TJX in Q1 FY23?
What is the outlook for TJX's adjusted pretax margin in FY23?
Did TJX experience any challenges in Q1 FY23?
