The TJX Companies, Inc. Reports Q1 FY22 Results Well Above Plan With Overall Open-Only Comp Store Sales Up 16% Versus Q1 FY20 and Earnings Per Share Of $.44
- Q1 FY22 overall open-only comp store sales increased 16% compared to Q1 FY20
-
Q1 FY22 diluted earnings per share were
$.44 -
Q1 FY22 net sales were
$10.1 billion , an increase of 129% compared to Q1 FY21 and an increase of 9% compared to Q1 FY20 -
The Company estimates that temporary store closures for approximately 14% of the first quarter, primarily stores in
Europe andCanada , negatively impacted Q1 FY22 sales by approximately$1.1 billion to$1.2 billion and EPS by approximately$.21 to$.24 (see below) -
In April, redeemed
$750 million of debt at par that was due to mature inJune 2021 -
Announcing make-whole calls that will reduce outstanding debt by an additional
$2.0 billion (see below) - For the start of Q2 FY22, overall open-only comp store sales trends remain similar to Q1 FY22
The Company’s results for the first quarter of Fiscal 2022 were negatively impacted by the temporary closure of some of its stores due to the COVID-19 global pandemic. Although the Company’s stores in the
CEO and President Comments
Sales by Business Segment
The Company’s open-only comp store sales and net sales by division in the first quarter were as follows:
|
First Quarter
|
First Quarter |
||
|
|
FY2022 |
FY2021 |
FY2020 |
|
|
|
|
|
Marmaxx ( |
+12% |
|
|
|
|
+40% |
|
|
|
TJX Canada |
+9% |
|
|
|
|
+11% |
|
|
|
|
|
|
|
|
TJX |
+16% |
|
|
|
1This measure reports the sales increase or decrease of these stores for the days the stores were open in the first quarter of Fiscal 2022 against sales for the same days in Fiscal 2020, prior to the emergence of the pandemic, which the Company believes is a more useful comparison than against the first quarter of Fiscal 2021. 2Open-only comparable store sales outside the
Margins
For the first quarter of Fiscal 2022, the Company’s consolidated pretax profit margin was 7.2%. The Company’s merchandise margin was up slightly compared to the first quarter of Fiscal 2020. Merchandise margin improvement versus Fiscal 2020 was due to strong markon and lower markdowns, mostly offset by higher freight costs.
Cash and Dividend Update
The Company ended the first quarter of Fiscal 2022 with
Redemption of Senior Notes
In
Inventory
Total inventories as of
Q1 Fiscal 2022 and Q1 Fiscal 2021 Store Closures by Region (in percent of store days closed)
Region |
Q1 FY22 |
Q1 FY21 |
|
0% |
50% |
|
25% |
53% |
|
76% |
49% |
|
2% |
49% |
Total TJX |
14% |
50% |
Temporary Store Closings
The Company currently has approximately 300 stores that are temporarily closed due to government mandates in response to the COVID-19 global pandemic. All of these stores are located in
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 is not applicable for the first quarter of Fiscal 2022. In order to provide a performance indicator for its stores as they reopen, the Company has been temporarily reporting a new sales measure: 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 the first quarter of Fiscal 2022 against sales for the same days in Fiscal 2020, prior to the emergence of the global pandemic.
Outlook
For the start of the second quarter of Fiscal 2022, overall open-only comp store sales trends remain similar to the first quarter. In the second quarter of Fiscal 2022, the Company expects total sales, pretax margin, and earnings per share to be negatively impacted from the temporary store closings described above. Due to the continued uncertainty of the current environment, the Company is not providing financial guidance at this time.
Stores by Concept
During the first quarter ended
|
Store Locations1 |
Gross Square Feet2 |
||
|
First Quarter |
First Quarter |
||
|
|
(in millions) |
||
|
Beginning |
End |
Beginning |
End |
In the |
|
|
|
|
|
1,271 |
1,282 |
34.8 |
35.0 |
Marshalls |
1,131 |
1,147 |
32.4 |
32.7 |
|
821 |
843 |
19.1 |
19.6 |
Sierra |
48 |
52 |
1.0 |
1.1 |
Homesense |
34 |
39 |
0.9 |
1.0 |
In |
|
|
|
|
Winners |
280 |
284 |
7.7 |
7.8 |
HomeSense |
143 |
143 |
3.3 |
3.3 |
Marshalls |
102 |
103 |
2.7 |
2.7 |
In |
|
|
|
|
|
602 |
604 |
16.9 |
17.0 |
Homesense |
78 |
78 |
1.5 |
1.5 |
In |
|
|
|
|
|
62 |
64 |
1.3 |
1.4 |
|
|
|
|
|
TJX |
4,572 |
4,639 |
121.6 |
123.1 |
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
First Quarter Fiscal 2022 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. 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
Financial Summary (Unaudited) (In Thousands Except Per Share Amounts) |
||||||||
|
Thirteen Weeks Ended |
|||||||
|
|
|
||||||
|
|
|
||||||
Net sales |
$ |
10,086,661 |
|
$ |
4,408,888 |
|
||
|
|
|
||||||
Cost of sales, including buying and occupancy costs |
7,255,635 |
|
4,414,465 |
|
||||
Selling, general and administrative expenses |
2,064,992 |
|
1,313,920 |
|
||||
Interest expense, net |
44,688 |
|
23,351 |
|
||||
|
|
|
||||||
Income (loss) before income taxes |
721,346 |
|
(1,342,848 |
) |
||||
(Provision) benefit for income taxes |
(187,416 |
) |
455,359 |
|
||||
|
|
|
||||||
Net income (loss) |
$ |
533,930 |
|
$ |
(887,489 |
) |
||
|
|
|
||||||
Diluted earnings (loss) per share |
$ |
0.44 |
|
$ |
(0.74 |
) |
||
|
|
|
||||||
Cash dividends declared per share |
$ |
0.26 |
|
$ |
— |
|
||
|
|
|
||||||
Weighted average common shares – diluted |
1,221,517 |
|
1,197,809 |
|
Condensed Balance Sheets (Unaudited) (In Millions) |
||||||||
|
|
|
||||||
|
|
|
||||||
ASSETS |
|
|
||||||
Current assets: |
|
|
||||||
Cash and cash equivalents |
$ |
8,775.5 |
|
$ |
4,287.8 |
|
||
Accounts receivable and other current assets |
1,061.7 |
|
581.2 |
|
||||
Merchandise inventories |
5,114.6 |
|
4,945.7 |
|
||||
Federal, state and foreign income taxes recoverable |
64.2 |
|
481.6 |
|
||||
|
|
|
||||||
Total current assets |
15,016.0 |
|
10,296.3 |
|
||||
|
|
|
||||||
Net property at cost |
5,067.8 |
|
5,201.7 |
|
||||
|
|
|
||||||
Operating lease right of use assets |
9,121.6 |
|
9,073.9 |
|
||||
|
99.3 |
|
94.5 |
|
||||
Other assets |
996.7 |
|
748.8 |
|
||||
|
|
|
||||||
TOTAL ASSETS |
$ |
30,301.4 |
|
$ |
25,415.2 |
|
||
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
||||||
Current liabilities: |
|
|
||||||
Accounts payable |
$ |
4,433.3 |
|
$ |
1,071.2 |
|
||
Accrued expenses and other current liabilities |
3,823.1 |
|
2,199.1 |
|
||||
Current portion of operating lease liabilities |
1,650.6 |
|
1,399.3 |
|
||||
|
|
|
||||||
Total current liabilities |
9,907.0 |
|
4,669.6 |
|
||||
|
|
|
||||||
Other long-term liabilities |
1,033.2 |
|
786.0 |
|
||||
Non-current deferred income taxes, net |
33.9 |
|
113.2 |
|
||||
Long-term operating lease liabilities |
7,853.2 |
|
7,914.8 |
|
||||
Long-term debt |
5,334.9 |
|
7,192.4 |
|
||||
|
|
|
||||||
Shareholders’ equity |
6,139.2 |
|
4,739.2 |
|
||||
|
|
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
30,301.4 |
|
$ |
25,415.2 |
|
||
|
|
|
Condensed Statements of Cash Flows (Unaudited) (In Millions) |
||||||||
|
Thirteen Weeks Ended |
|||||||
|
|
|
||||||
|
|
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
||||||
Net income (loss) |
$ |
533.9 |
|
$ |
(887.5 |
) |
||
Depreciation and amortization |
215.4 |
|
219.5 |
|
||||
Deferred income tax (benefit) |
(16.2 |
) |
(48.5 |
) |
||||
Share-based compensation |
50.5 |
|
(11.5 |
) |
||||
(Increase) decrease in accounts receivable and other assets |
(144.7 |
) |
170.8 |
|
||||
(Increase) in merchandise inventories |
(750.6 |
) |
(136.0 |
) |
||||
(Increase) in income taxes recoverable |
(27.9 |
) |
(434.7 |
) |
||||
(Decrease) in accounts payable |
(410.2 |
) |
(1,567.6 |
) |
||||
Increase (decrease) in accrued expenses and other liabilities |
216.0 |
|
(591.5 |
) |
||||
(Decrease) increase in net operating lease liabilities |
(50.3 |
) |
65.6 |
|
||||
Other |
(48.6 |
) |
60.9 |
|
||||
Net cash (used in) operating activities |
(432.7 |
) |
(3,160.5 |
) |
||||
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
||||||
Property additions |
(225.3 |
) |
(210.5 |
) |
||||
Purchase of investments |
(7.3 |
) |
(14.8 |
) |
||||
Sales and maturities of investments |
7.7 |
|
4.2 |
|
||||
Net cash (used in) investing activities |
(224.9 |
) |
(221.1 |
) |
||||
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
||||||
Payments on debt |
(750.0 |
) |
— |
|
||||
Proceeds from long-term debt |
— |
|
4,988.5 |
|
||||
Payments for debt issuance expenses |
— |
|
(33.9 |
) |
||||
Payments for repurchase of common stock |
— |
|
(201.5 |
) |
||||
Cash dividends paid |
(315.2 |
) |
(278.3 |
) |
||||
Proceeds from issuance of common stock |
36.5 |
|
37.4 |
|
||||
Other |
(24.4 |
) |
(21.8 |
) |
||||
Net cash (used in) provided by financing activities |
(1,053.1 |
) |
4,490.4 |
|
||||
|
|
|
||||||
Effect of exchange rate changes on cash |
16.6 |
|
(37.8 |
) |
||||
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents |
(1,694.1 |
) |
1,071.0 |
|
||||
Cash and cash equivalents at beginning of year |
10,469.6 |
|
3,216.8 |
|
||||
|
|
|
||||||
Cash and cash equivalents at end of period |
$ |
8,775.5 |
|
$ |
4,287.8 |
|
Selected Information by Major Business Segment (Unaudited) (In Thousands) |
||||||||
|
Thirteen Weeks Ended |
|||||||
|
|
|
||||||
Net sales: |
|
|
||||||
In |
|
|
||||||
Marmaxx |
$ |
6,640,486 |
|
$ |
2,697,779 |
|
||
|
2,141,756 |
|
759,865 |
|
||||
TJX Canada |
765,536 |
|
379,636 |
|
||||
|
538,883 |
|
571,608 |
|
||||
Total net sales |
$ |
10,086,661 |
|
$ |
4,408,888 |
|
||
|
|
|
||||||
Segment profit (loss): |
|
|
||||||
In |
|
|
||||||
Marmaxx |
$ |
824,855 |
|
$ |
(709,669 |
) |
||
|
251,602 |
|
(153,703 |
) |
||||
TJX Canada |
71,577 |
|
(97,181 |
) |
||||
|
(221,558 |
) |
(258,617 |
) |
||||
Total segment profit (loss) |
926,476 |
|
(1,219,170 |
) |
||||
|
|
|
||||||
General corporate expense |
160,442 |
|
100,327 |
|
||||
Interest expense, net |
44,688 |
|
23,351 |
|
||||
Income (loss) before income taxes |
$ |
721,346 |
|
$ |
(1,342,848 |
) |
Notes to Consolidated Condensed Statements
-
The novel coronavirus ("COVID-19") was first identified in
December 2019 before spreading worldwide. In response to the COVID-19 pandemic, the Company temporarily closed all of its stores, online businesses, distribution centers and offices inMarch 2020 . As ofMay 18, 2021 , the Company had approximately 300 stores, primarily inEurope andCanada , that were temporarily closed due to government mandates in response to the COVID-19 pandemic. All of the Company’s e-commerce business throughout the first quarter of fiscal 2022 remained open, including tkmaxx.com in theU.K. Our results for the first quarter of fiscal 2022 and fiscal 2021 were negatively impacted by the temporary closures of our stores. These and other factors have had and may continue to have a material impact on our business, results of operations, financial position and liquidity. -
In
April 2021 , the Company redeemed$750 million of its 2.75% Notes dueJune 15, 2021 at par. The Company is also announcing today make-whole calls for its$1.25 billion principal outstanding 3.50% Notes dueApril 15, 2025 , and its$750 million principal outstanding 3.75% Notes dueApril 15, 2027 , both of which were issued in the first quarter of fiscal 2021. These make-whole calls are expected to settle onJune 4, 2021 and once completed are expected to result in a pre-tax debt extinguishment charge of approximately$250 million in the second quarter of fiscal 2022. -
The Company declared a quarterly dividend on our common stock of
$0.26 per share in the first quarter of fiscal 2022. No dividends were declared in the first quarter of fiscal 2021. - The Company suspended its share buyback program in the first quarter of fiscal 2021 in light of the COVID-19 pandemic.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210519005499/en/
(508) 390-2323
Source: