- Reported Q3 FY21 net sales of $10.1 billion
- Q3 FY21 overall open-only comp store sales decreased 5%,
which was well above the Company’s plans
- Q3 FY21 diluted earnings per share were $.71, which was well
above the Company’s plans
- Generated $4.1 billion of operating cash flow and ended Q3
FY21 with $10.6 billion of cash
- Plans to reinstate payment of its quarterly dividend,
subject to approval by the Company’s Board of Directors, at an
increased rate of $.26 per share
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 third quarter ended
October 31, 2020. Net sales for the third quarter of Fiscal 2021
were $10.1 billion. Overall open-only comp store sales (defined
below) were down 5% versus last year. Net income for the third
quarter was $867 million and diluted earnings per share were $.71
versus $.68 in the prior year. The Company’s lower tax rate in the
third quarter of Fiscal 2021 resulted in an increase in earnings
per share of approximately $.09 compared to the prior year. The
lower tax rate was primarily due to a true-up of the Company’s
year-to-date tax rate as well as the shifting of income and loss
positions across the Company’s operating jurisdictions.
For the first nine months of Fiscal 2021, net sales were $21.2
billion. Net loss was ($235) million and loss per share was ($.20).
The Company’s results for the first nine months of Fiscal 2021 were
negatively impacted by the temporary closure of its stores for
approximately 27% of the first nine months of the year due to the
COVID-19 global pandemic.
CEO and President
Comments
Ernie Herrman, Chief Executive Officer and President of The TJX
Companies, Inc., stated, “Our third quarter results significantly
exceeded our plans on both the top and bottom lines as consumers
were drawn to our compelling brands and values. This is such a
great testament to our global Associates. I am particularly proud
of their dedication to our health and safety protocols for
Associates and customers, and grateful to our store, distribution
and fulfillment center Associates who are physically coming into
work to keep our business open. All of our divisions drove sales
above our plans, and our home, beauty, and activewear businesses
outperformed at Marmaxx, TJX Canada, and TJX International. At
HomeGoods, we delivered another quarter of double-digit open-only
comp store sales growth. To both leverage our strength in the home
category and capitalize on our market share growth opportunities,
we are pleased to share that we plan to rollout e-commerce on
HomeGoods.com later next year. As we begin the fourth quarter,
while significant uncertainty around COVID-19 remains, we are as
focused as ever on bringing consumers exciting gift selections at
excellent values. We plan to ship fresh assortments to our stores
and online throughout the holiday selling season. Longer term, when
we are past this health crisis, we are very confident that we will
continue to gain more customers and drive the successful growth of
TJX well into the future.”
Margins
For the third quarter of Fiscal 2021, the Company’s consolidated
pretax profit margin was 10.0%, a 0.7 percentage point decrease
versus the prior year’s 10.7%. The Company’s very strong
merchandise margin increase was more than offset by significant
operating costs related to COVID-19 and expense deleverage on the
year-over-year sales decline.
Cash and Dividend Update
During the third quarter, the Company generated $4.1 billion of
operating cash flow and ended the quarter with $10.6 billion of
cash. With the Company’s strong liquidity position, TJX announced
today that it expects to reinstate a quarterly dividend in the
fourth quarter of Fiscal 2021, subject to the approval of the
Company’s Board of Directors. The Company expects a quarterly
dividend on its common stock of $.26 per share to be declared in
December 2020 and payable in March 2021. This would represent a 13%
increase in the per share dividend compared to the Company’s
previous dividend paid in March of 2020.
Temporary Store Closings
The Company currently has approximately 470 stores that are
temporarily closed due to local government mandates in response to
the COVID-19 global pandemic. The vast majority of these stores are
located in Europe. The Company’s tkmaxx.com e-commerce business in
the U.K. remains open.
Open-Only Comp Store
Sales
Due to the temporary closing of stores as a result of the
COVID-19 global pandemic, the Company’s historical definition of
comp store sales is not applicable this quarter. In order to
provide a performance indicator for its stores as they reopen, the
Company is temporarily reporting a new sales measure: open-only
comp store sales. Open-only comp store sales includes stores
initially classified as comp stores at the beginning of Fiscal 2021
that have had to temporarily close due to the COVID-19 pandemic.
This measure reports the sales increase or decrease of these stores
for the days the stores were open in the current period against
sales for the same days in the prior year.
Sales by Business
Segment
The Company’s open-only comp store sales and net sales by
division, in the third quarter, were as follows:
Third Quarter Open-Only Comp
Store Sales1,2
Third Quarter Net Sales ($
in millions)3,4
FY2021
FY2020
Marmaxx (U.S.)5,6
-10%
$5,785
$6,354
HomeGoods (U.S.)7
+15%
$1,876
$1,582
TJX Canada
-7%
$1,028
$1,082
TJX International (Europe &
Australia)
-6%
$1,429
$1,433
TJX
-5%
$10,117
$10,451
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.
Q3 FY21 Inventory
Total inventories as of October 31, 2020, were $5.0 billion,
compared with $6.3 billion at the end of the third quarter last
year. The year-over-year decline in balance sheet inventory was due
to a combination of factors, including lower planned store
inventory levels, stronger than expected third quarter sales, and
merchandise delivery delays due to continued bottlenecks in the
supply chain. Overall product availability in the marketplace
remains excellent and the Company continues to shift its buying
towards the categories that have had the strongest demand since
reopening. The Company is well positioned to ship a fresh
assortment of gifts to its stores and online throughout the holiday
season.
Outlook
For the first two weeks of the fourth quarter, overall open-only
comp store sales were down 7%, similar to the trend the Company saw
during the last week of October. Due to the increasing uncertainty
of the current environment and the difficulty in forecasting the
impact of the global pandemic on temporary store closures and
consumer behavior, demand, and traffic, the Company is not
providing guidance at this time.
Stores by Concept
During the third quarter ended October 31, 2020, the Company
increased its store count by 17 stores to a total of 4,574 stores
and increased square footage by 1% over the same period last
year.
Store Locations1
Gross Square Feet2
Third Quarter
Third Quarter
(in millions)
Beginning
End
Beginning
End
In the U.S.:
T.J. Maxx
1,271
1,272
34.8
34.8
Marshalls
1,134
1,134
32.5
32.4
HomeGoods
818
821
19.0
19.1
Sierra
46
48
1.0
1.0
Homesense
34
34
0.9
0.9
In Canada:
Winners
279
280
7.6
7.7
HomeSense
141
143
3.2
3.3
Marshalls
102
102
2.7
2.7
In Europe:
T.K. Maxx
597
602
16.8
16.9
Homesense
78
78
1.5
1.5
In Australia:
T.K. Maxx
57
60
1.2
1.3
TJX
4,557
4,574
121.3
121.7
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 October
31, 2020, the end of the Company’s third quarter, the Company
operated a total of 4,574 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 1,272 T.J. Maxx, 1,134 Marshalls, 821 HomeGoods, 48
Sierra, and 34 Homesense stores, as well as tjmaxx.com,
marshalls.com, and sierra.com in the United States; 280 Winners,
143 HomeSense, and 102 Marshalls stores in Canada; 602 T.K. Maxx
and 78 Homesense stores, as well as tkmaxx.com, in Europe; and 60
T.K. Maxx stores in Australia. TJX’s press releases and financial
information are available at TJX.com.
Fiscal 2021 Third 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 third 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, November 25, 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
Thirty-Nine Weeks Ended
October 31, 2020
November 2, 2019
October 31, 2020
November 2, 2019
Net sales
$
10,117,289
$
10,451,334
$
21,193,752
$
29,510,515
Cost of sales, including buying
and occupancy costs
7,062,285
7,440,033
16,651,240
21,103,975
Selling, general and
administrative expenses
1,986,128
1,885,923
4,827,816
5,319,659
Interest expense, net
52,884
3,259
133,571
6,973
Income (loss) before income
taxes
1,015,992
1,122,119
(418,875
)
3,079,908
(Provision) benefit for income
taxes
(149,336
)
(293,856
)
183,822
(792,505
)
Net income (loss)
$
866,656
$
828,263
$
(235,053
)
$
2,287,403
Diluted earnings (loss) per
share
$
0.71
$
0.68
$
(0.20
)
$
1.86
Cash dividends declared per
share
$
—
$
0.23
$
—
$
0.69
Weighted average common shares –
diluted
1,214,195
1,224,288
1,198,798
1,228,903
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)
October 31, 2020
November 2, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
10,582.0
$
2,060.2
Accounts receivable and other current
assets
888.8
857.2
Merchandise inventories
4,997.5
6,274.8
Federal, state and foreign income taxes
recoverable
185.6
182.4
Total current assets
16,653.9
9,374.6
Net property at cost
5,004.8
5,251.0
Operating lease right of use assets
9,028.7
9,069.1
Goodwill
96.7
96.3
Other assets
781.4
497.7
TOTAL ASSETS
$
31,565.5
$
24,288.7
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
6,142.5
$
3,447.4
Accrued expenses and other current
liabilities
3,275.1
2,827.4
Current portion of operating lease
liabilities
1,650.2
1,412.3
Current portion of long-term debt
749.4
—
Total current liabilities
11,817.2
7,687.1
Other long-term liabilities
860.5
797.6
Non-current deferred income taxes, net
78.0
203.5
Long-term operating lease liabilities
7,795.8
7,822.1
Long-term debt
5,447.2
2,235.9
Shareholders’ equity
5,566.8
5,542.5
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
31,565.5
$
24,288.7
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Statements of Cash
Flows
(Unaudited)
(In Millions)
Thirty-Nine Weeks Ended
October 31, 2020
November 2, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income
$
(235.1
)
$
2,287.4
Depreciation and amortization
658.5
647.4
Deferred income tax (benefit)
provision
(113.0
)
42.1
Share-based compensation
58.9
86.6
(Increase) in accounts receivable and
other assets
(130.3
)
(161.8
)
(Increase) in merchandise inventories
(134.9
)
(1,701.7
)
(Increase) in income taxes recoverable
(138.7
)
(169.6
)
Increase in accounts payable
3,464.3
805.8
Increase in accrued expenses and other
liabilities
570.4
2.2
Increase in net operating lease
liabilities
226.9
32.1
Other
49.8
3.1
Net cash provided by operating
activities
4,276.8
1,873.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions
(433.6
)
(992.7
)
Purchase of investments
(24.5
)
(24.1
)
Sales and maturities of investments
13.9
11.6
Other
—
7.4
Net cash (used in) investing
activities
(444.2
)
(997.8
)
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
)
(1,190.4
)
Cash dividends paid
(278.3
)
(795.1
)
Proceeds from issuance of common stock
87.7
175.3
Cash payments of employee tax withholdings
for performance based stock awards
(21.8
)
(23.3
)
Net cash provided by (used in) financing
activities
3,540.7
(1,833.5
)
Effect of exchange rate changes on
cash
(8.1
)
(12.3
)
Net increase (decrease) in cash and cash
equivalents
7,365.2
(970.0
)
Cash and cash equivalents at beginning of
year
3,216.8
3,030.2
Cash and cash equivalents at end of
period
$
10,582.0
$
2,060.2
The TJX Companies, Inc. and Consolidated Subsidiaries
Selected Information by Major
Business Segment
(Unaudited)
(In Thousands)
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31, 2020
November 2, 2019
October 31, 2020
November 2, 2019
Net sales:
In the United States:
Marmaxx
$
5,784,753
$
6,353,987
$
12,441,872
$
18,262,444
HomeGoods
1,875,641
1,582,411
3,871,479
4,404,112
TJX Canada
1,027,828
1,081,522
1,999,382
2,896,717
TJX International
1,429,067
1,433,414
2,881,019
3,947,242
Total net sales
$
10,117,289
$
10,451,334
$
21,193,752
$
29,510,515
Segment profit (loss):
In the United States:
Marmaxx
$
665,070
$
820,430
$
55,872
$
2,471,622
HomeGoods
291,209
173,212
235,082
438,939
TJX Canada
176,520
170,264
101,304
385,513
TJX International
86,576
99,397
(303,303
)
178,343
Total segment profit
1,219,375
1,263,303
88,955
3,474,417
General corporate expense
150,499
137,925
374,259
387,536
Interest expense, net
52,884
3,259
133,571
6,973
Income (loss) before income taxes
$
1,015,992
$
1,122,119
$
(418,875
)
$
3,079,908
The TJX Companies, Inc. and Consolidated
Subsidiaries Notes to Consolidated Condensed Statements
- In December 2019, a novel coronavirus ("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 quarantine or isolation
protocols for those 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, with
Associates working remotely where possible. In May 2020, the
Company began reopening stores and by the end of the second
quarter, more than 4,500 of the Company’s worldwide stores, and
each of its online businesses had reopened. As of November 18,
2020, the Company has approximately 470 stores that are temporarily
closed due to local government mandates in response to the COVID-19
global pandemic, primarily located in Europe. The Company’s
tkmaxx.com e-commerce business in the U.K. remains open. 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.
- The Company has taken several steps to further strengthen our
financial position and balance sheet, and maintain financial
liquidity and flexibility, including suspending our share
repurchase program, reviewing operating expenses, evaluating, and
in some cases, extending merchandise payment terms, reducing
capital expenditures, negotiating rent deferrals for a significant
number of stores and not declaring a dividend in the first nine
months of fiscal 2021. In April 2020 the Company issued $4.0
billion in aggregate principal long-term debt. In August 2020, the
Company increased its borrowing capacity under revolving credit
facilities with a new $500.0 million facility, making a total of
$1.5 billion available to the Company.
- On November 18, 2020, TJX announced that it expects to
reinstate a quarterly dividend in the fourth quarter of Fiscal
2021, subject to the approval of the Company’s Board of Directors.
The Company expects a quarterly dividend on its common stock of
$0.26 per share to be declared in December 2020 and payable in
March 2021.
- Prior to the suspension of the share buyback 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 October 31, 2020, the Company had approximately $3.0 billion
available under this and previously announced stock repurchase
programs.
- For the thirty-nine weeks ended October 31, 2020, as a result
of net losses, 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 would have been anti-dilutive.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201118005610/en/
Debra McConnell Global Communications (508) 390-2323
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