TJX Companies 10-Q 2024-11-02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(mark one)

For the quarterly period ended November 2, 2024

OR

For the transition period from to

Commission file number 1-4908

The TJX Companies, Inc.

(Exact name of registrant as specified in its charter)

(508) 390-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The number of shares of registrant’s common stock outstanding as of November 22, 2024: 1,124,158,029

The TJX Companies, Inc.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

IN MILLIONS EXCEPT PER SHARE AMOUNTS

The accompanying notes are an integral part of the unaudited Consolidated Financial Statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

IN MILLIONS

The accompanying notes are an integral part of the unaudited Consolidated Financial Statements.

THE TJX COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

IN MILLIONS, EXCEPT SHARE AMOUNTS

Showing the first 8K of 73K characters. Open the full section

The Thirteen Weeks (third quarter) and Thirty-Nine Weeks (nine months) Ended November 2, 2024

Compared to

The Thirteen Weeks (third quarter) and Thirty-Nine Weeks (nine months) Ended October 28, 2023

OVERVIEW

We are the leading off-price apparel and home fashions retailer in the U.S. and worldwide. Our mission is to deliver great value to our customers every day. We do this by selling a rapidly changing assortment of apparel, home fashions and other merchandise at prices generally 20% to 60% below full-price retailers’ (including department, specialty and major online retailers) regular prices on comparable merchandise, every day through our stores and six e-commerce sites. We operate over 5,000 stores through our four main segments: in the U.S., Marmaxx (which operates TJ Maxx, Marshalls, tjmaxx.com and marshalls.com) and HomeGoods (which operates HomeGoods and Homesense); TJX Canada (which operates Winners, HomeSense and Marshalls in Canada); and TJX International (which operates TK Maxx, Homesense, tkmaxx.com, tkmaxx.de, and tkmaxx.at in Europe, and TK Maxx in Australia). In addition to our four main segments, Sierra operates retail stores and sierra.com in the U.S. The results of Sierra are included in the Marmaxx segment.

RESULTS OF OPERATIONS

As an overview of our financial performance, results for the quarter ended November 2, 2024 include the following:

–Net sales increased 6% to $14.1 billion for the third quarter of fiscal 2025 versus last year’s third quarter sales of $13.3 billion. As of November 2, 2024, both the number of stores in operation and the selling square footage increased 2% compared to the end of the third quarter of fiscal 2024.

*–*Consolidated comp store sales increased 3% for the third quarter of fiscal 2025. See Net Sales below for our definition of comp store sales.

*–*Diluted earnings per share for the third quarter of fiscal 2025 were $1.14 versus $1.03 in the third quarter of fiscal 2024.

*–*Pre-tax profit margin (the ratio of pre-tax income to net sales) for the third quarter of fiscal 2025 was 12.3%, a 0.3 percentage point increase compared with 12.0% in the third quarter of fiscal 2024.

–Our cost of sales, including buying and occupancy costs, ratio for the third quarter of fiscal 2025 was 68.4%, a 0.5 percentage point decrease compared with 68.9% in the third quarter of fiscal 2024.

–Our selling, general and administrative (“SG&A”) expense ratio for the third quarter of fiscal 2025 was 19.5%, a 0.1 percentage point increase compared with 19.4% in the third quarter of fiscal 2024.

–Our consolidated average per store inventories, including inventory on hand at our distribution centers (which excludes inventory in transit) and excluding our e-commerce sites and Sierra stores, were down 2% at the end of the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024.

–During the third quarter of fiscal 2025, we returned $997 million to our shareholders through share repurchases and dividends.

–We announced that we plan to enter Spain with our TK Maxx banner in fiscal 2027.

Equity Investments

On June 7, 2024, we announced that we entered into a definitive agreement for a joint venture with Grupo Axo, S.A.P.I de C.V. (“Axo”) to hold a 49% ownership stake in Multibrand Outlet Stores S.A.P.I. de C.V. (“MOS”), Axo’s off-price, physical store business in Mexico. We have the option to increase our ownership interest in the joint venture over the long term. On September 3, 2024, we completed this investment for $192 million, which includes a purchase price of $179 million and acquisition costs of $13 million. This investment is accounted for under the equity method of accounting.

On August 21, 2024, we announced that we entered into a definitive agreement to acquire a 35% ownership stake in privately held Brands for Less (“BFL”), representing a non-controlling, minority position. BFL currently operates over 100 stores, primarily in the UAE and Saudi Arabia, as well as an e-commerce business, and is the region’s only major off-price branded apparel, toys and home fashions retailer. During the fourth quarter of fiscal 2025, we completed this investment for a purchase price of $344 million. This investment will be accounted for under the equity method of accounting from the date of investment forward.

We will report the results of our share of the investments with Axo and BFL on a one-quarter lag as their results are not expected to be available in time to be recorded in the concurrent period. We do not expect these investments to have a material impact on our fiscal 2025 results.

Recent Events and Trends

Global Economic Conditions and Industry Trends

We continue to closely monitor changes in international trade relations, economic and monetary policies, or legislation and regulations including those related to tariffs on imports from China and other countries, which could adversely impact the global economy and our operating results. In particular, the potential impact on our direct imports, vendor and competitor pricing, consumer demand and tariff pass-throughs remains uncertain.

Operating Results as a Percentage of Net Sales

The following table sets forth our consolidated operating results as a percentage of net sales:

*Figures may not foot due to rounding.

Net Sales

Net sales for the quarter ended November 2, 2024 totaled $14.1 billion, a 6% increase versus third quarter fiscal 2024 net sales of $13.3 billion. This increase reflects a 3% increase in comp store sales, a 2% increase from non-comp store sales and a 1% positive foreign currency exchange rate impact. Net sales from our e-commerce sites combined amounted to less than 2% of total sales for each of the third quarters of fiscal 2025 and fiscal 2024.

Net sales for the nine months ended November 2, 2024 totaled $40.0 billion, a 6% increase versus net sales of $37.8 billion for the first nine months fiscal 2024. This increase reflects a 3% increase in comp store sales, a 3% increase from non-comp store sales and a neutral foreign currency exchange rate impact. Net sales from our e-commerce sites combined amounted to less than 2% of total sales for each of the first nine months of fiscal 2025 and fiscal 2024.

Comp store sales increased 3% for the third quarter of fiscal 2025 and increased 6% for the third quarter of fiscal 2024. Comp store sales increased 3% for the first nine months of fiscal 2025 and increased 5% for the first nine months of fiscal 2024. While both home comp store sales growth (as defined below) and apparel comp store sales growth (as defined below) were positive, home comp store sales growth outperformed apparel comp store sales growth for both the third quarter and the first nine months of fiscal 2025. Comp store sales for the third quarter of fiscal 2025 were driven by an increase in customer transactions, partially offset by a decrease in average basket. Comp store sales for the first nine months of fiscal 2025 were driven by an increase in customer transactions.

As of November 2, 2024, both our store count and selling square footage increased 2% compared to the end of the third quarter last year.

Definition of Comparable Store Sales

We define comparable store sales, or comp store sales, to be sales of stores that have been in operation for all or a portion of two consecutive fiscal years, or, in other words, stores that are starting their third fiscal year of operation. We calculate comp store sales on a 52-week basis by comparing the current and prior year weekly periods that are most closely aligned. Relocated stores and stores that have changed in size are generally classified in the same way as the original store, and we believe that the impact of these stores on the consolidated comp store sales percentage is immaterial.

Sales excluded from comp store sales (“non-comp store sales”) consist of sales from:

–New stores - stores that have not yet met the comp store sales criteria, which represents a substantial majority of non-comp store sales

–Stores that are closed permanently or for an extended period of time

–Sales from our e-commerce sites

We determine which stores are included in the comp store sales calculation at the beginning of a fiscal year, and the classification remains constant throughout that year unless a store is closed permanently or for an extended period during that fiscal year.

Comp store sales of our foreign segments are calculated on a constant currency basis. We define constant currency basis as translating the current year’s results using the prior year’s exchange rates. This removes the effect of changes in currency exchange rates, which we believe is a more appropriate measure of performance.

Comp store sales may be referred to as “same store” sales by other retail companies. The method for calculating comp store sales varies across the retail industry; therefore, our measure of comp store sales may not be comparable to that of other retail companies. Comparable store sales for a category such as home or apparel include sales from merchandise within such category combined across all divisions at the stores that fall within the Company’s definition of comparable stores for such period.

Historically, we defined customer traffic to be the number of transactions in stores included in the comp store sales calculation; since the end of fiscal 2024, we refer to this as customer transactions. We define average ticket to be the average retail price of the units sold. We define average basket to be the average dollar value of transactions.

Impact of Foreign Currency Exchange Rates

Our operating results are affected by foreign currency exchange rates as a result of changes in the value of the U.S. dollar or a division’s local currency in relation to other currencies. We specifically refer to “foreign currency” as the impact of translational foreign currency exchange and mark-to-market of inventory derivatives, as described in detail below. This does not include the impact foreign currency exchange rates can have on various transactions that are denominated in a currency other than an operating division's local currency, which is referred to as “transactional foreign exchange,” and also described below.

Translation Foreign Exchange

In our Consolidated Financial Statements, we translate the operations of TJX Canada and TJX International from local currencies into U.S. dollars using currency rates in effect at different points in time. Significant changes in foreign exchange rates between comparable prior periods can result in meaningful variations in assets, liabilities, net sales, net income and earnings per share as well as the net sales and operating results of these segments. Currency translation generally does not affect operating margins, or affects them only slightly, as sales and expenses of the foreign operations are translated at approximately the same rates within a given period.

Mark-to-Market Inventory Derivatives

We routinely enter into inventory-related hedging instruments to mitigate the impact on earnings of changes in foreign currency exchange rates on merchandise purchases denominated in currencies other than the local currencies of our divisions, principally TJX Canada and TJX International. As we have not elected hedge accounting for these instruments, as defined by U.S. generally accepted accounting principles (“GAAP”), we record a mark-to-market gain or loss on the derivative instruments in our results of operations at the end of each reporting period. In subsequent periods, the income statement impact of the mark-to-market adjustment is effectively offset when the inventory being hedged is paid for. While these effects occur every reporting period, they are of much greater magnitude when there are sudden and significant changes in currency exchange rates during a short period of time. The mark-to-market adjustment on these derivatives does not affect net sales, but it does affect the cost of sales, operating margins and earnings we report.

Transactional Foreign Exchange

When discussing the impact on our results of the effect of foreign currency exchange rates on certain transactions, we refer to it as “transactional foreign exchange”. This primarily includes the impact that foreign currency exchange rates may have on the year-over-year comparison of merchandise margin as well as “foreign currency gains and losses” on transactions that are denominated in a currency other than the operating division's local currency. These two items can impact segment margin comparison of our foreign divisions and we have highlighted them when they are meaningful to understanding operating trends.

Cost of Sales, Including Buying and Occupancy Costs

Cost of sales, including buying and occupancy costs, as a percentage of net sales was 68.4% for the third quarter of fiscal 2025, a decrease of 0.5 percentage points compared to 68.9% for the third quarter of fiscal 2024. The decrease in the cost of sales ratio, including buying and occupancy costs, for the third quarter of fiscal 2025 was attributable to higher merchandise margin due to higher markon, partially offset by the unfavorable year-over-year impacts related to the mark-to-market adjustment on inventory hedges.

Cost of sales, including buying and occupancy costs, as a percentage of net sales was 69.3% for the first nine months of fiscal 2025, a decrease of 0.6 percentage points compared to 69.9% for the first nine months of fiscal 2024. The decrease in the cost of sales ratio, including buying and occupancy costs, for the first nine months of fiscal 2025 was attributable to higher merchandise margin due to higher markon and lower freight costs, partially offset by higher supply chain costs.

Selling, General and Administrative Expenses

SG&A expenses, as a percentage of net sales, was 19.5% for the third quarter of fiscal 2025, an increase of 0.1 percentage points compared to 19.4% for the third quarter of fiscal 2024. The increase in the SG&A ratio for the third quarter of fiscal 2025 was due to incremental store wage and payroll costs, partially offset by the year-over-year benefit from closing HomeGoods’ e-commerce business last year.

SG&A expenses, as a percentage of net sales, was 19.5% for the first nine months of fiscal 2025, flat compared to the first nine months of fiscal 2024. The SG&A ratio was flat for the first nine months of fiscal 2025 due to a favorable year-over-year impact from a prior year reserve related to a German COVID program receivable and the year-over-year benefit from closing HomeGoods’ e-commerce business last year, offset by incremental store wage and payroll costs.

Interest (Income) Expense, net

The components of interest (income) expense, net are summarized below:

Interest (income) expense, net increased for both the third quarter of fiscal 2025 and first nine months ended November 2, 2024 compared to the same periods in fiscal 2024 due to an increase in interest income driven by higher average cash balances.

Provision for Income Taxes

In 2021, the Organization for Economic Co-operation and Development announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Subsequently, multiple sets of administrative guidance have been issued. Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or announced their plans to enact legislation in future years. These rules did not have a material impact on our financial statements for the third quarter or the first nine months of fiscal 2025 and are not expected to materially increase our global tax costs on our fiscal 2025 financial statements. There remains uncertainty as to the final Pillar Two model rules. We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in.

The effective income tax rate was 25.3% for the third quarter of fiscal 2025 and 25.0% for the third quarter of fiscal 2024. The effective income tax rate was 24.6% for the first nine months of fiscal 2025 and 25.5% for the first nine months of fiscal 2024. This increase in the effective income tax rate for the third quarter and the decrease in the effective income tax rate for the first nine months of fiscal 2025 were primarily due to the impact of excess tax benefit from share-based compensation and the resolution of various tax matters.

Net Income and Diluted Earnings Per Share

Net income was $1.3 billion, or $1.14 per diluted share, and $1.2 billion, or $1.03 per diluted share, for the third quarter of fiscal 2025 and fiscal 2024, respectively. Foreign currency had a $0.01 positive impact on diluted earnings per share for the third quarter of fiscal 2025 and a $0.02 positive impact on diluted earnings per share for the third quarter of fiscal 2024.

Net income was $3.5 billion, or $3.03 per diluted share, and $3.1 billion, or $2.65 per diluted share, for the first nine months of fiscal 2025 and fiscal 2024, respectively. Foreign currency had a $0.01 positive impact on diluted earnings per share for the first nine months of fiscal 2025 and the first nine month of fiscal 2024.

Segment Information

We operate four main business segments. In the United States, our Marmaxx segment operates TJ Maxx, Marshalls, tjmaxx.com and marshalls.com and our HomeGoods segment operates HomeGoods and Homesense. Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates TK Maxx, Homesense, tkmaxx.com, tkmaxx.de, and tkmaxx.at in Europe and TK Maxx in Australia. In addition to our four main segments, Sierra operates retail stores and sierra.com in the U.S. The results of Sierra are included in the Marmaxx segment.

We evaluate the performance of our segments based on “segment profit or loss,” which we define as pre-tax income or loss before general corporate expense and interest (income) expense, net, and certain separately disclosed unusual or infrequent items. “Segment profit or loss,” as we define the term, may not be comparable to similarly titled measures used by other companies. The terms “segment margin” or “segment profit margin” are used to describe segment profit or loss as a percentage of net sales. These measures of performance should not be considered an alternative to net income or cash flows from operating activities, as an indicator of our performance or as a measure of liquidity.

Presented below is selected financial information related to our business segments.

U.S. SEGMENTS

Marmaxx

Net Sales

Net sales for Marmaxx were $8.4 billion for the third quarter of fiscal 2025, an increase of 4% compared to $8.1 billion for the third quarter of fiscal 2024. This increase in the third quarter reflects a 2% increase from comp store sales and a 2% increase from non-comp store sales.

Net sales for Marmaxx were $24.6 billion for the first nine months of fiscal 2025, an increase of 5% compared to $23.4 billion for the first nine months of fiscal 2024. This increase in the first nine months reflects a 3% increase from comp store sales and a 2% increase from non-comp store sales.

For the third quarter, the increase in comp store sales was driven by an increase in customer transactions, partially offset by average basket. For the first nine months of fiscal 2025, the increase in comp store sales was driven by an increase in customer transactions. While both Marmaxx home and apparel comp store sales growth were positive, home comp store sales growth outperformed apparel comp store sales growth for both the third quarter and the first nine months of fiscal 2025. Geographically, comp store sales growth was strongest in the West region for both the third quarter and the first nine months of fiscal 2025.

Segment Profit Margin

Segment profit margin increased to 14.3% for the third quarter of fiscal 2025 compared to 14.0% for the same period last year. The increase in segment profit margin for the third quarter of fiscal 2025 was primarily driven by higher merchandise margin, partially offset by incremental store wage and payroll costs and expense deleverage on occupancy and administrative costs. Merchandise margin reflects higher markon and lower freight costs.

Segment profit margin increased to 14.2% for the first nine months of fiscal 2025 compared to 13.9% for the same period last year. The increase in segment profit margin for the first nine months of fiscal 2025 was primarily driven by higher merchandise margin, partially offset by incremental store wage and payroll costs and higher supply chain costs. Merchandise margin reflects higher markon and lower freight costs.

Our Marmaxx e-commerce sites, tjmaxx.com and marshalls.com, together with sierra.com, represented less than 3% of Marmaxx’s net sales for both the third quarter and first nine months of fiscal 2025 and fiscal 2024, and did not have a significant impact on year-over-year segment margin comparisons.

HomeGoods

Net Sales

Net sales for HomeGoods were $2.4 billion for the third quarter of fiscal 2025, an increase of 7%, compared to $2.2 billion for the third quarter of fiscal 2024. This increase in the third quarter reflects a 4% increase from non-comp store sales and a 3% increase from comp store sales.

Net sales for HomeGoods were $6.5 billion for the first nine months of fiscal 2025, an increase of 6%, compared to $6.2 billion for the first nine months of fiscal 2024. This increase in the first nine months reflects a 3% increase from comp store sales and a 3% increase from non-comp store sales.

For both the third quarter and first nine months of fiscal 2025, the increase in comp store sales was driven by an increase in customer transactions, partially offset by a decrease in average basket. Geographically, comp store sales growth was strongest in the West for the third quarter of fiscal 2025 and in the West and Midwest regions for the first nine months of fiscal 2025.

Segment Profit Margin

Segment profit margin increased to 12.3% for the third quarter of fiscal 2025 compared to 10.3% for the same period last year. This increase in segment profit margin for the third quarter of fiscal 2025 was primarily driven by the year-over-year benefit from closing HomeGoods’ e-commerce business last year.

Segment profit margin increased to 10.4% for the first nine months of fiscal 2025 compared to 8.8% for the same period last year. This increase in segment profit margin for the first nine months of fiscal 2025 was primarily driven by higher merchandise margin and the year-over-year benefit from closing HomeGoods’ e-commerce business last year, partially offset by incremental store wage and payroll costs. Merchandise margin reflects lower freight costs and higher markon.

FOREIGN SEGMENTS

TJX Canada

Net Sales

Net sales for TJX Canada were $1.4 billion for the third quarter of fiscal 2025, an increase of 5%, compared to $1.3 billion for the third quarter of fiscal 2024. This increase in the third quarter reflects a 4% increase in non-comp store sales, a 2% increase in comp store sales, partially offset by a negative foreign currency exchange rate impact of 1%.

Net sales for TJX Canada were $3.7 billion for the first nine months of fiscal 2025, an increase of 4%, compared to $3.6 billion for the first nine months of fiscal 2024. This increase in the first nine months reflects a 3% increase in comp store sales, a 3% increase in non-comp store sales, partially offset by a negative foreign currency exchange rate impact of 2%.

The increase in comp store sales for the third quarter of fiscal 2025 was driven by an increase in customer transactions, partially offset by a decrease in average basket. The increase in comp store sales for the first nine months of fiscal 2025 was driven by an increase in customer transactions.

Segment Profit Margin

Segment profit margin decreased to 15.1% for the third quarter of fiscal 2025 compared to 16.9% for the same period last year. This decrease for the third quarter of fiscal 2025 was primarily driven by lower merchandise margin, the unfavorable year-over-year impact related to an insurance claim recovery last year and third-party storage facility exit costs this year. Merchandise margin reflects lower markon and higher freight costs as a result of the Canada rail shutdown.

Segment profit margin decreased to 14.3% for the first nine months of fiscal 2025, compared to 14.9% for the same period last year. This decrease for the first nine months of fiscal 2025 primarily driven by incremental store wage and payroll costs, the unfavorable year-over-year impact related to an insurance claim recovery last year and third-party storage facility exit costs this year. These were partially offset by favorable supply chain costs.

TJX International

Net Sales

Net sales for TJX International were $1.9 billion for the third quarter of fiscal 2025, an increase of 16%, compared to $1.6 billion for the third quarter of fiscal 2024. This increase in the third quarter reflects a 7% increase in comp store sales, a positive foreign currency exchange rate impact of 5% and a 4% increase in non-comp store sales.

Net sales for TJX International were $5.1 billion for the first nine months of fiscal 2025, an increase of 9%, compared to $4.7 billion for the first nine months of fiscal 2024. This increase in the first nine months reflects a 4% increase in comp store sales, a 3% increase in non-comp store sales and a positive foreign currency exchange rate impact of 2%.

The increase in comp store sales for both the third quarter and first nine months was driven by an increase in customer transactions.

E-commerce sales represented less than 4% of TJX International’s net sales for both the third quarter and first nine months of fiscal 2025 and fiscal 2024.

Segment Profit Margin

Segment profit margin increased to 7.3% for the third quarter of fiscal 2025 compared to 5.4% for the same period last year. This increase for the third quarter of fiscal 2025 was primarily due to favorable occupancy costs, the favorable impact of transactional foreign exchange, and expense leverage on the higher comp store sales.

Segment profit margin increased to 5.3% for the first nine months of fiscal 2025 compared to 3.4% for the same period last year. This increase for the first nine months of fiscal 2025 was due to a favorable year-over-year impact from a prior year reserve related to a German COVID program receivable, higher merchandise margin and favorable occupancy costs, partially offset by incremental store wage. Merchandise margin reflects higher markon and lower markdowns.

GENERAL CORPORATE EXPENSE

General corporate expense for segment reporting purposes represents those costs not specifically related to the operations of our business segments. General corporate expenses are primarily included in SG&A expenses. The mark-to-market adjustment of our fuel and inventory hedges is included in cost of sales, including buying and occupancy costs.

The increase in general corporate expense for the third quarter of fiscal 2025 was primarily driven by unfavorable year-over-year impacts related to the mark-to-market adjustments on inventory hedges.

The increase in general corporate expense for the first nine months of fiscal 2025 was primarily driven by higher other administrative costs and the unfavorable year-over-year impacts related to the mark-to-market adjustments on inventory hedges and fuel hedges.

ANALYSIS OF FINANCIAL CONDITION

Liquidity and Capital Resources

Our liquidity requirements have traditionally been funded through cash generated from operations, supplemented, as needed, by short-term bank borrowings and the issuance of commercial paper. As of November 2, 2024, there were no short-term bank borrowings or commercial paper outstanding. We believe our existing cash and cash equivalents, internally generated funds and our credit facilities, under which facilities we have $1.5 billion available as of the period ended November 2, 2024, as described in Note I—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements, are adequate to meet our operating needs for the foreseeable future.

As of November 2, 2024, we held $4.7 billion in cash. Approximately $1.7 billion of our cash was held by our foreign subsidiaries with $956 million held in countries where we intend to indefinitely reinvest any undistributed earnings. We have provided for all applicable state and foreign withholding taxes on all undistributed earnings of our foreign subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong and Vietnam through November 2, 2024. If we repatriate cash from such subsidiaries, we should not incur additional tax expense and our cash would be reduced by the amount of withholding taxes paid.

We monitor debt financing markets on an ongoing basis and from time to time may incur additional long-term indebtedness depending on prevailing market conditions, liquidity requirements, existing economic conditions and other factors. Periodically, we have used, and in the future we may again use, operating cash flow and cash on hand to repay portions of our indebtedness, depending on prevailing market conditions, liquidity requirements, existing economic conditions, contractual restrictions and other factors. As such, we may, from time to time, seek to retire, redeem, prepay or purchase our outstanding debt through redemptions, cash purchases, prepayments, refinancings and/or exchanges, in open market purchases, privately negotiated transactions, by tender offer or otherwise. If we use our operating cash flow and/or cash on hand to repay our debt, it will reduce the amount of cash available for additional capital expenditures.

Operating Activities

Operating activities resulted in net cash inflows of $3.4 billion for the nine months ended November 2, 2024 and net cash inflows of $3.3 billion for the nine months ended October 28, 2023.

Operating cash flows increased $155 million compared to fiscal 2024 primarily due to a $395 million increase in net income, partially offset by a $246 million decrease in accrued expenses primarily due to incentive compensation costs.

Investing Activities

Investing activities resulted in net cash outflows of $1.6 billion for the nine months ended November 2, 2024 and $1.3 billion for the nine months ended October 28, 2023. The cash outflows for both periods were driven by capital expenditures. In addition, the first nine months of fiscal 2025 includes the purchase of an equity method investment.

Capital expenditures in the first nine months of fiscal 2025 primarily reflected store improvements and renovations, investments in our new stores, as well as investments in our distribution centers and offices, including information technology. We anticipate that capital spending for the full fiscal year 2025 will be approximately $2.0 billion to $2.1 billion.

On June 7, 2024, we announced that we entered into a definitive agreement for a joint venture with Axo to hold a 49% ownership stake in MOS, Axo’s off-price, physical store business in Mexico. We and Axo both expect to make additional future investments in the joint venture to support the expected growth of the business. We have the option to increase our ownership interest in the joint venture over the long term. On September 3, 2024, we completed this investment for $192 million, which includes a purchase price of $179 million and acquisition costs of $13 million.

On August 21, 2024, we announced that we entered into a definitive agreement to make an investment for a 35% ownership stake in privately held BFL, representing a non-controlling, minority position. During the fourth quarter of fiscal 2025, we completed this investment for a purchase price of $344 million.

We funded these expenditures and investments with our existing cash balances and through internally generated funds.

Financing Activities

Financing activities resulted in net cash outflows of $2.7 billion for the first nine months of fiscal 2025 and net cash outflows of $3.1 billion for the first nine months of fiscal 2024. The cash outflows for both periods were primarily driven by equity repurchases and dividend payments.

Debt

The cash outflows in the first nine months of fiscal 2024 were due to the repayment of our $500 million 2.500% ten-year Notes due May 2023 during the second quarter of fiscal 2024. For further information regarding long-term debt, see Note I – Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements.

Equity

Under our stock repurchase programs, we paid $1.7 billion to repurchase and retire 15.4 million shares of our stock in the first nine months of fiscal 2025. During the second quarter of fiscal 2025, we completed stock repurchases representing all of the $1 billion that remained as of February 3, 2024 from the previously announced stock repurchase program. As of November 2, 2024, approximately $1.9 billion remained available under our existing stock repurchase program. We paid $1.7 billion to repurchase and retire 20.3 million shares of our stock in the first nine months of fiscal 2024. We currently plan to repurchase approximately $2.25 billion to $2.5 billion of stock under our stock repurchase programs in fiscal 2025. For further information regarding equity repurchases, see Note D – Capital Stock and Earnings Per Share of Notes to Consolidated Financial Statements.

Dividends

We declared quarterly dividends on our common stock of $0.375 per share for each of the quarters in the first nine months of fiscal 2025 and $0.3325 per share for each of the quarters in the first nine months of fiscal 2024. Cash payments for dividends on our common stock totaled $1.2 billion for the first nine months of fiscal 2025 and $1.1 billion for the first nine months of fiscal 2024.

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to the critical accounting estimates as discussed in TJX's Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For a discussion of accounting standards, see Note A—Basis of Presentation and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements included in TJX’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024 and Note A—Basis of Presentation and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements”. These forward-looking statements generally can be identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "seek," "should," "will," "would," or any variations of these words or other words with similar meanings. These forward-looking statements address various matters that we intend, expect, or believe may occur in the future, including, among others, statements regarding the Company's anticipated operating and financial performance, business plans and prospects, investments, anticipated dividends and share repurchases, and plans with respect to long-term indebtedness. Each forward-looking statement is inherently subject to risks, uncertainties and potentially inaccurate assumptions that could cause actual results to differ materially from those expressed or implied by such statement. We cannot guarantee that the results and other expectations expressed, anticipated or implied in any forward-looking statement will be realized. Applicable risks and uncertainties include, among others: execution of buying strategy and inventory management; customer trends and preferences; competition; various marketing efforts; operational and business expansion; management of large size and scale; merchandise sourcing and transport; data security and maintenance and development of information technology systems; labor costs and workforce challenges; personnel recruitment, training and retention; corporate and retail banner reputation; evolving corporate governance and public disclosure regulations and expectations with respect to environmental, social and governance matters; expanding international operations; fluctuations in quarterly operating results and market expectations; inventory or asset loss; cash flow; mergers, acquisitions, or business investments and divestitures, closings or business consolidations; real estate activities; economic conditions and consumer spending; market instability; severe weather, serious disruptions or catastrophic events; disproportionate impact of disruptions during this fiscal year; commodity availability and pricing; 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 Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K filed with the SEC. We caution investors, potential investors and others not to place considerable reliance on the forward-looking statements contained in this Form 10-Q. You are encouraged to read any further disclosures we may make in our future reports to the SEC, available at www.sec.gov, on our website, or otherwise. The forward-looking statements in this report speak only as of the date of this Form 10-Q, and we undertake no obligation to update or revise any of these statements, even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

We have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of November 2, 2024 pursuant to Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at the reasonable assurance level in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms; and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of implementing controls and procedures.

Effective September 30, 2024, we implemented a new treasury management system to simplify and standardize our global treasury process while aimed at enhancing the control environment surrounding the Company's treasury related activities. Except as described above, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Act) during the fiscal quarter ended November 2, 2024 identified in connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See Legal Contingencies in Note K—Contingent Obligations, Contingencies, and Commitments of Notes to Consolidated Financial Statements for information on legal proceedings.

There have been no material changes to the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended February 3, 2024, as filed with the Securities Exchange Commission on April 3, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

INFORMATION ON SHARE REPURCHASES

The number of shares of common stock repurchased by TJX during the third quarter of fiscal 2025 and the average price paid per share are as follows:

(a)Consists of shares repurchased under publicly announced stock repurchase programs.

(b)Includes commissions for the shares repurchased under stock repurchase programs.

(c)In February 2024, we announced that our Board of Directors had approved a new stock repurchase program that authorized the repurchase of up to an additional $2.5 billion of our common stock from time to time. Under this program, we had approximately $1.9 billion available for repurchase as of November 2, 2024.

During the fiscal quarter ended November 2, 2024, none of our directors or officers adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(a) of Regulation S-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.