- Reopened more than 4,500 stores worldwide and each of its
online shopping websites
- Reported Q2 FY21 net sales of $6.7 billion, well above its
internal plans
- Generated $3.4 billion of operating cash flow and ended Q2
FY21 with $6.6 billion of cash
- Q2 FY21 loss per share of ($.18)
- Paid off the $1 billion it drew down from its revolving
credit facilities in March 2020
The TJX Companies, Inc. (NYSE: TJX), the leading off-price
apparel and home fashions retailer in the U.S. and worldwide, today
announced sales and operating results for the second quarter ended
August 1, 2020. Net sales for the second quarter of Fiscal 2021
were $6.7 billion. Overall open-only comp store sales (defined
below) were down 3% versus last year. Net loss for the second
quarter was ($214) million and loss per share was ($.18). The
Company’s second quarter results were negatively impacted by the
temporary closure of its stores for nearly one third of the quarter
due to the impact of the COVID-19 global pandemic. Further, the
Company’s net loss per share includes tax expense, which was
primarily driven by a tax-loss carryback benefit recorded in the
first quarter and reversed in the second quarter due to better than
expected results.
For the first half of Fiscal 2021, net sales were $11.1 billion.
Net loss was ($1.1) billion and loss per share was ($.92). The
Company’s first half Fiscal 2021 results were negatively impacted
by the temporary closure of its stores for approximately 40% of the
first half of the year due to the pandemic.
CEO and President
Comments
Ernie Herrman, Chief Executive Officer and President of The TJX
Companies, Inc., stated, “It was so great to welcome back our
Associates and loyal customers around the world this quarter. I am
incredibly proud of the monumental effort of our Associates
worldwide to reopen more than 4,500 stores in 9 countries, multiple
distribution and fulfillment centers, and our e-commerce sites.
Across our organization, our Associates worked tirelessly to help
us operate safely in the current environment and bring our
customers the excellent values we are known for. When we reopened,
customer response to our values was beyond what we could have
imagined.”
Mr. Hermann continued, “For the quarter, we were very pleased
that both our top and bottom lines well exceeded our internal
plans, despite our stores only being open for a little more than
two thirds of the second quarter, and that our merchandise margin
was excellent. Further, we saw especially strong sales at our
HomeGoods and Homesense chains, as well as the home departments
within our other chains, across geographies. Specifically,
HomeGoods delivered double-digit, open-only comp store sales
increases each month of the quarter. As to the future, we are
confident that when more customers are comfortable with in-store
shopping, we will be in a great position to continue gaining market
share as we have for many years. We have been a trusted, value
leader for more than 40 years, and we see a long runway of
successful growth ahead for TJX.”
Business Update
More than 4,500 of the Company’s worldwide stores, and each of
its online shopping websites, are now reopened. Globally, the
Company has put in place practices to help protect the health and
well-being of its Associates and customers, including social
distancing protocols, access to personal protective equipment,
enhanced cleaning efforts, and occupancy limits. Further, the
Company has mandated that shoppers wear face coverings in its
stores throughout the U.S. and Canada. In Europe and Australia, the
Company is following regional governmental face covering
requirements. The Company is very pleased with customer feedback it
has received related to the new health and safety protocols in its
stores.
The Company experienced very strong initial sales across all of
its retail banners and countries upon reopening, some of which was
due to pent-up consumer demand. Following the early wave of
stronger than anticipated demand, the Company’s traffic and sales
moderated as it moved through the second quarter and into the third
quarter. The Company believes that this was due to a number of
COVID-19-related factors, including the impact on consumer behavior
and demand, and lighter inventories in its stores than it planned.
The Company was not able to optimize the inventory flow back to its
stores, particularly in Canada, due to supply chain and logistics
challenges at both the Company and at some of its third-party
affiliates as businesses ramped back up. The Company has put
strategies in place to mitigate some of these inventory delays.
Financial Update
The Company ended the second quarter in a strong liquidity
position with $6.6 billion of cash. During the second quarter, the
Company generated $3.4 billion of operating cash flow and paid off
the $1.0 billion it drew down from its revolving credit facilities
in March 2020. At the beginning of the third quarter, the Company
also increased its borrowing capacity under revolving credit
facilities with a new $500 million facility, making a total of $1.5
billion available to the Company. The Company is in a strong
financial position and will continue to be prudent with its
expenses, capital spending, and shareholder distributions due to
the current environment. The Company does not expect to declare a
dividend in the third quarter of Fiscal 2021 and has suspended its
share buyback program.
Open-Only Comp Store
Sales
Due to the temporary closing of all its stores as a result of
the COVID-19 global pandemic, the Company’s definition of comp
store sales is not applicable this quarter. In order to provide a
performance indicator for its stores as they reopen, the Company is
temporarily reporting a new sales measure: open-only comp store
sales. Open-only comp store sales includes stores initially
classified as comp stores at the beginning of Fiscal 2021, and
reports the sales increase or decrease of these stores for the days
the stores were open in the current period against sales for the
same days in the prior year.
Sales by Business
Segment
The Company’s open-only comp store sales and net sales by
division, in the second quarter, were as follows:
Second Quarter Open-Only Comp
Store Sales1,2
Second Quarter Net Sales
($ in millions)3,4
FY2021
FY2020
Marmaxx (U.S.)5,6
-6%
$3,959
$6,107
HomeGoods (U.S.)7
+20%
$1,236
$1,425
TJX Canada
-18%
$592
$967
TJX International (Europe &
Australia)
-1%
$880
$1,283
TJX
-3%
$6,668
$9,782
1Open-only comparable store sales outside the U.S. calculated on
a constant currency basis, which removes the effect of changes in
currency exchange rates. 2Open-only comparable store sales exclude
e-commerce sites (tjmaxx.com, marshalls.com, sierra.com, and
tkmaxx.com) and include Sierra stores.3Net sales in TJX Canada and
TJX International include the impact of foreign currency exchange
rates. 4Figures may not foot due to rounding. 5Combination of T.J.
Maxx and Marshalls. 6Net sales include Sierra’s e-commerce and
store sales. 7Includes Homesense stores in the U.S.
Q2 FY21 Inventory
Total inventories as of August 1, 2020, were $3.7 billion,
compared with $5.1 billion at the end of the second quarter last
year. The year-over-year decline in balance sheet inventory was due
to a combination of factors. These included lower planned store
inventory levels in the second quarter primarily to promote social
distancing for Associates and customers, stronger than expected
sales as stores reopened, and supply chain and logistics challenges
at the Company and some of its third-party affiliates as operations
ramped up. Overall product availability in the marketplace remains
excellent. The Company is currently committed to inventory that is
in-line with its sales plans, and has significantly increased its
buying since the middle of July to support inventory flow. Further,
the Company is flexing its buying towards the categories that have
had the strongest demand upon reopening.
Outlook
For the third quarter, the Company is planning overall open-only
comp store sales to decrease in the range of 10% to 20%. This is
in-line with the sales trends it has seen since the middle of July
and through August month-to-date. The Company’s wide sales plan
range reflects the uncertainty of the current environment and the
difficulty in forecasting the impact of the global pandemic on
consumer behavior, demand and traffic, in addition to the
anticipated slower back-to-school selling season. Due to this
uncertainty, the Company does not believe it is currently able to
provide meaningful further guidance and is not providing a
financial outlook for Fiscal 2021 at this time.
Stores by Concept
During the second quarter ended August 1, 2020, the Company
increased its store count by 12 stores to a total of 4,557 stores
and increased square footage by 3% over the same period last
year.
Store Locations1
Gross Square Feet2
Second Quarter
Second Quarter
(in millions)
Beginning
End
Beginning
End
In the U.S.:
T.J. Maxx
1,273
1,271
34.9
34.8
Marshalls
1,130
1,134
32.4
32.5
HomeGoods
814
818
18.9
19.0
Sierra
46
46
1.0
1.0
Homesense
34
34
0.9
0.9
In Canada:
Winners
279
279
7.6
7.6
HomeSense
139
141
3.2
3.2
Marshalls
100
102
2.7
2.7
In Europe:
T.K. Maxx
596
597
16.8
16.8
Homesense
78
78
1.5
1.5
In Australia:
T.K. Maxx
56
57
1.2
1.2
TJX
4,545
4,557
121.1
121.3
1Store counts above include both banners within a combo or a
superstore. Includes stores that were or are temporarily closed due
to COVID-19.
2Square feet figures may not foot due to rounding.
About The TJX Companies,
Inc.
The TJX Companies, Inc. is the leading off-price retailer of
apparel and home fashions in the U.S. and worldwide. As of August
1, 2020, the end of the Company’s second quarter, the Company
operated a total of 4,557 stores in nine countries, the United
States, Canada, the United Kingdom, Ireland, Germany, Poland,
Austria, the Netherlands, and Australia, and four e-commerce sites.
These include 1,271 T.J. Maxx, 1,134 Marshalls, 818 HomeGoods, 46
Sierra, and 34 Homesense stores, as well as tjmaxx.com,
marshalls.com, and sierra.com in the United States; 279 Winners,
141 HomeSense, and 102 Marshalls stores in Canada; 597 T.K. Maxx
and 78 Homesense stores, as well as tkmaxx.com, in Europe; and 57
T.K. Maxx stores in Australia. TJX’s press releases and financial
information are available at TJX.com.
Fiscal 2021 Second Quarter Earnings
Conference Call
At 11:00 a.m. ET today, Ernie Herrman, Chief Executive Officer
and President of TJX, will hold a conference call to discuss the
Company’s second quarter Fiscal 2021 results, operations, and
business trends. A real-time webcast of the call will be available
to the public at TJX.com. A replay of the call will also be
available by dialing (866) 367-5577 (U.S. only) or (203) 369-0233
through Wednesday, August 26, 2020, or at TJX.com.
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. The following are some of the factors
that could cause actual results to differ materially from the
forward-looking statements: execution of buying strategy and
inventory management; operational and business expansion and
management of large size and scale; customer trends and
preferences; various marketing efforts; competition; economic
conditions and consumer spending; the ongoing COVID-19 global
pandemic and associated containment and remediation efforts; 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; quality, safety and other issues with our merchandise;
compliance with laws, regulations and orders and changes in laws,
regulations and applicable accounting standards; serious
disruptions or catastrophic events and adverse or unseasonable
weather; expanding international operations; merchandise sourcing
and transport; commodity availability and pricing; fluctuations in
currency exchange rates; fluctuations in quarterly operating
results and market expectations; mergers, acquisitions, or business
investments and divestitures, closings or business consolidations;
outcomes of litigation, legal proceedings and other legal or
regulatory matters; disproportionate impact of disruptions in the
second half of the fiscal year; cash flow; inventory or asset loss;
tax matters; real estate activities; and other factors that may be
described in our filings with the Securities and Exchange
Commission. We do not undertake to publicly update or revise our
forward-looking statements even if experience or future changes
make it clear that any projected results expressed or implied in
such statements will not be realized.
The TJX Companies, Inc. and
Consolidated Subsidiaries
Financial Summary
(Unaudited)
(In Thousands Except Per Share
Amounts)
Thirteen Weeks Ended
Twenty-Six Weeks Ended
August 1, 2020
August 3, 2019
August 1, 2020
August 3, 2019
Net sales
$
6,667,575
$
9,781,596
$
11,076,463
$
19,059,181
Cost of sales, including buying and
occupancy costs
5,174,490
7,026,057
9,588,955
13,663,942
Selling, general and administrative
expenses
1,527,768
1,731,335
2,841,688
3,433,736
Interest expense, net
57,336
2,897
80,687
3,714
(Loss) income before income taxes
(92,019
)
1,021,307
(1,434,867
)
1,957,789
(Provision) benefit for income taxes
(122,201
)
(262,345
)
333,158
(498,649
)
Net (loss) income
$
(214,220
)
$
758,962
$
(1,101,709
)
$
1,459,140
Diluted (loss) earnings per share
$
(0.18
)
$
0.62
$
(0.92
)
$
1.19
Cash dividends declared per share
$
0.00
$
0.230
$
0.00
$
0.460
Weighted average common shares –
diluted
1,198,634
1,228,986
1,198,222
1,231,211
The TJX Companies, Inc. and
Consolidated Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)
August 1, 2020
August 3, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
6,620.4
$
2,186.4
Accounts receivable and other current
assets
847.9
816.1
Merchandise inventories
3,744.1
5,087.0
Federal, state and foreign income taxes
recoverable
305.6
179.1
Total current assets
11,518.0
8,268.6
Net property at cost
5,100.4
5,041.9
Operating lease right of use assets
9,063.9
8,944.3
Goodwill
97.1
95.9
Other assets
789.0
504.3
TOTAL ASSETS
$
26,568.4
$
22,855.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
2,422.1
$
2,607.7
Accrued expenses and other current
liabilities
2,884.8
2,639.3
Current portion of operating lease
liabilities
1,591.1
1,353.7
Current portion of long-term debt
749.2
—
Total current liabilities
7,647.2
6,600.7
Other long-term liabilities
848.3
776.7
Non-current deferred income taxes, net
91.8
197.0
Long-term operating lease liabilities
7,875.2
7,742.9
Long-term debt
5,445.3
2,235.1
Shareholders’ equity
4,660.6
5,302.6
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
26,568.4
$
22,855.0
The TJX Companies, Inc. and
Consolidated Subsidiaries
Condensed Statements of Cash
Flows
(Unaudited)
(In Millions)
Twenty-Six Weeks Ended
August 1, 2020
August 3, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income
$
(1,101.7
)
$
1,459.1
Depreciation and amortization
439.5
427.8
Deferred income tax (benefit)
provision
(88.6
)
37.9
Share-based compensation
27.6
55.4
(Increase) in accounts receivable and
other assets
(96.1
)
(109.6
)
Decrease (increase) in merchandise
inventories
1,111.6
(560.4
)
(Increase) in income taxes recoverable
(258.7
)
(166.4
)
(Decrease) in accounts payable
(240.4
)
(6.8
)
Increase (decrease) in accrued expenses
and other liabilities
128.2
(230.3
)
Increase in net operating lease
liabilities
209.1
25.3
Other
66.3
(32.8
)
Net cash provided by operating
activities
196.8
899.2
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions
(309.9
)
(578.0
)
Purchase of investments
(19.4
)
(19.0
)
Sales and maturities of investments
10.5
9.4
Other
—
7.4
Net cash (used in) investing
activities
(318.8
)
(580.2
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash payments on revolving credit
facilities
(1,000.0
)
—
Proceeds from long-term debt
4,988.5
—
Cash payments for debt issuance
expenses
(33.9
)
—
Cash payments for repurchase of common
stock
(201.5
)
(699.8
)
Cash dividends paid
(278.3
)
(517.4
)
Proceeds from issuance of common stock
59.5
102.5
Cash payments of employee tax withholdings
for performance based stock awards
(21.8
)
(23.3
)
Net cash provided by (used in) financing
activities
3,512.5
(1,138.0
)
Effect of exchange rate changes on
cash
13.1
(24.8
)
Net increase (decrease) in cash and cash
equivalents
3,403.6
(843.8
)
Cash and cash equivalents at beginning of
year
3,216.8
3,030.2
Cash and cash equivalents at end of
period
$
6,620.4
$
2,186.4
The TJX Companies, Inc. and
Consolidated Subsidiaries
Selected Information by Major
Business Segment
(Unaudited)
(In Thousands)
Thirteen Weeks Ended
Twenty-Six Weeks Ended
August 1, 2020
August 3, 2019
August 1, 2020
August 3, 2019
Net sales:
In the United States:
Marmaxx
$
3,959,340
$
6,106,697
$
6,657,119
$
11,908,457
HomeGoods
1,235,973
1,424,836
1,995,838
2,821,701
TJX Canada
591,918
967,460
971,554
1,815,195
TJX International
880,344
1,282,603
1,451,952
2,513,828
Total net sales
$
6,667,575
$
9,781,596
$
11,076,463
$
19,059,181
Segment profit:
In the United States:
Marmaxx
$
100,471
$
855,199
$
(609,198
)
$
1,651,192
HomeGoods
97,576
128,942
(56,127
)
265,727
TJX Canada
21,965
118,217
(75,216
)
215,249
TJX International
(131,262
)
50,459
(389,879
)
78,946
Total segment (loss) profit
88,750
1,152,817
(1,130,420
)
2,211,114
General corporate expense
123,433
128,613
223,760
249,611
Interest expense, net
57,336
2,897
80,687
3,714
(Loss) income before income taxes
$
(92,019
)
$
1,021,307
$
(1,434,867
)
$
1,957,789
The TJX Companies, Inc. and Consolidated
Subsidiaries Notes to Consolidated Condensed Statements
- In December 2019, COVID-19 emerged and spread worldwide. The
World Health Organization declared COVID-19 a pandemic in March
2020, resulting in federal, state and local governments and private
entities mandating various restrictions, including travel
restrictions, restrictions on public gatherings, stay at home
orders and advisories and quarantining of people who may have been
exposed to the virus. In March 2020, the Company temporarily closed
all of its stores, its online businesses, its distribution centers
and its offices. To date, nearly all of the Company’s worldwide
stores and each of its online shopping websites have reopened.
These and other factors have had and may continue to have a
material impact on our business, results of operations, financial
position and cash flows.
- In response to the COVID-19 pandemic and in an effort to
further strengthen our financial position and to maintain financial
liquidity and flexibility, in April 2020 the Company issued $4
billion in aggregate principal long-term debt, and in July 2020
paid off the $1.0 billion it had drawn down from its revolving
credit facilities in March 2020. In August 2020, the Company
increased its borrowing capacity under revolving credit facilities
with a new $500 million facility, making a total of $1.5 billion
available to the Company. The Company decided not to declare a
dividend for the first half of Fiscal 2021, and at this time, does
not expect to declare a dividend in the third quarter of Fiscal
2021.
- In March 2020, in connection with the actions taken related to
the COVID-19 pandemic, the Company suspended its share repurchase
program. Prior to the suspension of the program, TJX repurchased
and retired 3.2 million shares of its common stock at a cost of
$190 million on a "trade date" basis. TJX records the repurchase of
its stock on a cash basis, and the amounts reflected in the
financial statements may vary from the above amounts due to the
timing of settlement of repurchases. In February 2020, the Company
announced that its Board of Directors had approved a new stock
repurchase program that authorizes the repurchase of up to an
additional $1.5 billion of TJX common stock from time to time. As
of August 1, 2020, the Company had approximately $3.0 billion
available under this and previously announced stock repurchase
programs.
- For the period ended August 1, 2020, as a result of the net
loss for the quarter, all options have been excluded from the
calculation of diluted earnings per share and therefore there was
no difference in the weighted average number of common shares for
basic and diluted loss per share as the effect of all potentially
dilutive shares outstanding was anti-dilutive.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200819005362/en/
The TJX Companies, Inc. Debra McConnell Global Communications
(508) 390-2323
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