TJX Companies Report Third Quarter Operating Results

November 21, 2024  by Karen Parrish in Business Strategy, Industry   

For the first nine months of Fiscal 2025, net sales were $40.0 billion, an increase of 6% versus the first nine months of Fiscal 2024. Consolidated comparable store sales for the first nine months of Fiscal 2025 increased 3%. Net income for the first nine months of Fiscal 2025 was $3.5 billion. For the first nine months of Fiscal 2025, diluted earnings per share were $3.03, up 14% versus $2.65 in the first nine months of Fiscal 2024.

CEO and President Comments

Ernie Herrman, CEO and president of The TJX Companies, Inc., stated, “I am very pleased with our third quarter results and the strong execution of our off-price business fundamentals by our teams. Our comp store sales increase of 3% was at the high-end of our plan, and both pretax profit margin and earnings per share came in well above our expectations."

"Across the Company, customer transactions drove our comp sales increases, which tells us that our values and treasure hunt shopping experience are appealing to a wide range of customers. I want to specifically highlight our European team for their strong results, which drove the 7% comp increase at our TJX International division."

Herman concluded, "With our above-plan profitability results in the third quarter, we are raising our full year guidance for pretax profit margin and earnings per share. The fourth quarter is off to a strong start, and we are excited about our opportunities for the holiday selling season. In stores and online, we are offering consumers an ever-changing and inspiring shopping destination for gifts at excellent values and feel confident that there will be something for everyone when they shop us. Going forward, we continue to see great potential to successfully grow TJX around the globe well into the future.”

Margins

For the third quarter of Fiscal 2025, the Company’s pretax profit margin was 12.3%, up 0.3 percentage points versus last year’s third quarter pretax profit margin of 12.0%.

The Company’s third quarter Fiscal 2025 pretax profit margin was above the high-end of its plan by 0.4 percentage points, primarily driven by the timing of certain expenses, expense savings, and higher net interest income.

Gross profit margin for the third quarter of Fiscal 2025 was 31.6%, up 0.5 percentage points versus last year, primarily due to an increase in merchandise margin.

Selling, general and administrative (SG&A) costs as a percent of sales for the third quarter of Fiscal 2025 were 19.5%, a 0.1 percentage point increase versus last year.

Cash and Shareholder Distributions

For the third quarter of Fiscal 2025, the Company generated $1.0 billion of operating cash flow and ended the quarter with $4.7 billion of cash.

During the third quarter of Fiscal 2025, the Company returned a total of $997 million to shareholders. The Company repurchased $574 million of TJX stock, retiring 5.0 million shares, and paid $423 million in shareholder dividends during the quarter.

During the first nine months of Fiscal 2025, the Company returned a total of $2.9 billion to shareholders. The Company repurchased a total of $1.7 billion of TJX stock, retiring 15.4 million shares, and paid $1.2 billion in shareholder dividends.

The Company now expects to repurchase approximately $2.25 to $2.5 billion of TJX stock during the fiscal year ending February 1, 2025. The Company may adjust the amount purchased under this plan up or down depending on various factors. The Company remains committed to returning cash to its shareholders while continuing to invest in the business to support the near- and long-term growth of TJX.

Fourth Quarter and Full Year Fiscal 2025 Outlook

For the fourth quarter of Fiscal 2025, the Company continues to expect consolidated comparable store sales to be up 2% to 3%. The Company now expects pretax profit margin to be in the range of 10.8% to 10.9% and diluted earnings per share to be in the range of $1.12 to $1.14. The change in the Company’s fourth quarter pretax profit margin and earnings per share guidance is due to the expected reversal of the third quarter benefit from the timing of certain expenses.

For the full year Fiscal 2025, the Company continues to expect consolidated comparable store sales to be up 3%. The Company is increasing its outlook for pretax profit margin to be 11.3% and raising its diluted earnings per share outlook to be in the range of $4.15 to $4.17.

As a reminder, last year’s fourth quarter and full year pretax profit margin and earnings per share benefited from an extra week in the Company’s fiscal calendar.