The TJX Companies, Inc.
CEO : Mr. Ernie L. Herrman
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q4 | 4.8% YoY | 7.7% | 12.5% | 2023-02-22 |
John Klinger says,
U.S. Comp Sales and Net Sales
- U.S. comp store sales increased by 4% in Q4 2023, exceeding expectations.
- Marmaxx had a very strong 7% comp sales increase, driven by apparel and accessory categories.
- TJX net sales grew to $14.5 billion, a 5% increase versus Q4 of fiscal ’22.
Full Year Results
- U.S. comp sales were flat versus a 17% U.S. open-only comp sales increase last year.
- TJX net sales grew to $49.9 billion, up 3% compared to fiscal ’22.
- Full year adjusted pretax profit margin was 9.7%, up 10 basis points versus last year’s adjusted 9.6%.
- Full year adjusted earnings per share were $3.11 at the high end of the plan and up 9% versus last year’s adjusted $2.85.
Inventory and Liquidity
- Balance sheet inventory was down 2% versus the fourth quarter of fiscal ’22.
- TJX returned $3.6 billion to shareholders through our buyback and dividend programs in fiscal ’23 and ended the year with $5.5 billion in cash.
Segment Profit Margin
- Marmaxx’s fourth quarter segment profit margin was 11.6%.
- HomeGoods fourth quarter segment profit margin was 7.3%.
- TJX Canada’s segment profit margin on a constant currency basis was up 12.5%.
- TJX International’s segment profit margin on a constant currency basis was 7.2%.
Merchandise Margin
- Merchandise margin was down in both Q4 2023 and full year results.
- Strong mark-on was offset by higher markdowns, which were compared to exceptionally low markdowns last year.
- 120 basis points of incremental freight costs negatively impacted full year merchandise margin.
Ernie Herrman says,
Strong Fourth Quarter Performance
- U.S. comp store sales increase of 4% driven by Marmaxx division’s excellent performance
- Positive U.S. customer traffic, also fueled by Marmaxx
- Pretax profit margin increased over last year due to excellent mark on from merchant organization
Challenges in the Fourth Quarter
- Outsized shrink charge resulted in pretax profit margin coming in below plan
Strong Full Year Results
- Total sales were nearly $50 billion
- Profitability improved over last year
- Adjusted earnings per share grew 9%
Positive Outlook for 2023
- First quarter is off to a strong start
- Excited about plans to drive sales and customer traffic
- Availability of quality branded merchandise is phenomenal
- Commitment to value and treasure hunt shopping experience will continue to serve well
- Many opportunities to capture market share and improve profitability over both the short and long term
New CFO Promotion
- Announced promotion of John Klinger to CFO
- John will be covering financials on the call and taking financial questions going forward
- Deb, SVP of Finance, will continue in her role with more focus on corporate areas like business development and real estate
Q & A sessions,
Overview
- TJX had an outstanding performance in 2022 despite historic levels of inflation and an uncertain retail environment.
- All divisions delivered excellent assortment of apparel, accessories, and home merchandise, offering great value every day.
- Momentum heading into 2023 is strong, and the company is confident in its plans to grow.
Divisional Highlights
- Marmaxx’s full year comp store sales increased 3% with a mid-single-digit comp increase in apparel and accessories businesses. Total divisional sales reached $30 billion.
- At HomeGoods, full year comp store sales decreased 11%. HomeGoods full year segment profit margin was 6.3%, and the company surpassed 900 stores for this division.
- TJX Canada’s net sales increased 18% on a constant currency basis, reaching nearly $5 billion, and the segment profit margin increased to 14%. The Canadian division operates more than 550 total stores.
- TJX International’s net sales increased 22% on a constant currency basis, surpassing $6 billion, and the segment profit margin improved to 5.7% on a constant currency basis.
E-commerce
- E-commerce represents a small percentage of overall net sales, but the company added new categories and brands to each of its online banners in 2022.
Profitability Outlook
- The company is planning an increase in its fiscal 2024 adjusted pretax profit margin to a range of 10.0% to 10.2% and aims to return to its fiscal 2020 pretax profit margin level of 10.6% by fiscal 2025.
Corporate Responsibility
- TJX continues to focus its global corporate responsibility efforts under its 4 key pillars: workplace, communities, environmental sustainability, and responsible business.
- The company helped support more than 2,000 nonprofit organizations globally and set expanded and accelerated global environmental goals, including a goal to achieve net zero GHG emissions in its operations by 2040.
- TJX restarted its in-person community relations programs and saw a resurgence in volunteering across its organization.
No bad stock 