Store Closures Benefit TJX, As It Announces $49.9 Billion in Sales, Up 3%

In full transparency, the following is a press release from TJX Companies submitted to SOURCE through its business wire service.

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FRAMINGHAM – The TJX Companies, Inc., a Framingham headquartered off-price apparel and home fashions retailer in the U.S. and worldwide, announced sales and operating results for the fourth quarter and fiscal year ended January 28, 2023.

Net sales for the fourth quarter of Fiscal 2023 were $14.5 billion, an increase of 5% versus the fourth quarter of Fiscal 2022.

U.S. comp store sales (defined below) increased 4% versus a 13% increase in U.S. open-only comp store sales (defined below) in the fourth quarter of Fiscal 2022. Net income for the fourth quarter of Fiscal 2023 was $1.0 billion and diluted earnings per share were $.89, a 14% increase versus $.78 in the fourth quarter of Fiscal 2022.

For the full year Fiscal 2023, net sales were $49.9 billion, an increase of 3% versus the full year Fiscal 2022. Full year Fiscal 2023 U.S. comp store sales were flat versus a 17% increase in U.S. open-only comp store sales in Fiscal 2022.

Net income for the full year of Fiscal 2023 was $3.5 billion. For the full year Fiscal 2023, diluted earnings per share were $2.97, a 10% increase versus $2.70 in Fiscal 2022. Full year Fiscal 2023 adjusted diluted earnings per share were $3.11, which excluded a $.14 net of tax charge related to a write-down and the divestiture of the Company’s minority investment in Familia. This was a 9% increase versus full year Fiscal 2022 adjusted diluted earnings per share of $2.85, which excluded a $.15 debt extinguishment charge.

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Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., said, “I am so proud of the outstanding performance and execution of our teams again in 2022. By staying focused on our off-price fundamentals, which have served us well through many kinds of retail and macro environments, we continued to bring customers around the world exciting values and a treasure-hunt shopping experience, every day. Our eclectic, rapidly changing mix of gift giving assortments clearly resonated with consumers this holiday season. We saw fourth quarter U.S. comp store sales growth of 4%, well above our plan, and U.S. customer traffic increase. Marmaxx delivered a very strong 7% comp increase, its highest quarterly comp of the year, driven by excellent sales in its apparel and accessories categories.”

“For the full year, total sales neared $50 billion, U.S. comp store sales were flat, and overall profitability improved. During the year, our apparel businesses, including accessories, across the Company were strong. Sales at our home businesses overall were softer as we saw extraordinary growth during the two prior years when consumers focused on purchases for their homes,” said Herrman.

“At our international divisions, we saw total sales increases and improved profitability for the year. Fiscal 2024 is off to a strong start and we remain confident in improving our profitability this year and reaching our pretax profit margin target of 10.6% by Fiscal 2025. We are energized for the year ahead and our plans to keep bringing customers around the globe ever-changing selections of great fashions and brands at excellent values. Longer term, I am confident that we are on track to becoming an increasingly profitable $60 billion-plus company., said the CEO.

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“A lot of store closures as well as the slowdown in the e-com business across the board, is obviously creating an influx of inventory and better brands than we’ve seen, even versus our last call,” Herrman said.

U.S. Comparable Store Sales (FY2023) and U.S. Open-Only Comparable Store Sales (FY2022)

The Company’s U.S. comparable store sales by division in the fourth quarter of Fiscal 2023 and full year Fiscal 2023, and U.S. open-only comparable store sales by division in the fourth quarter of Fiscal 2022 and full year Fiscal 2022 were as follows:

“We’re attracting new customers, we’re opening new stores, and we’re likely to benefit from other home store closures,” Herrman said. 

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Net Sales by Division

The Company’s net sales by division in the fourth quarter of Fiscal 2023 were as follows:

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The Company’s full year Fiscal 2023 net sales by division were as follows:

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Margins

For the fourth quarter of Fiscal 2023, the Company’s pretax profit margin was 9.2%, a 0.2 percentage point increase versus last year’s fourth quarter pretax profit margin of 9.0%. Merchandise margin decreased slightly and includes an unplanned 0.6 percentage point shrink charge versus last year. The Company’s fourth quarter guidance had contemplated that shrink would be a 0.5 percentage point benefit to pretax profit margin versus the prior year.

Gross profit margin for the fourth quarter of Fiscal 2023 was 26.1%, a 1.0 percentage point decrease versus the fourth quarter of Fiscal 2022. Selling, general and administrative (SG&A) costs as a percent of sales for the fourth quarter of Fiscal 2023 were 17.0%, a 1.0 percentage point decrease versus the fourth quarter of Fiscal 2022.

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For the full year Fiscal 2023, the Company’s pretax profit margin was 9.3%, a 0.2 percentage point increase versus last year’s pretax profit margin of 9.1%. For the full year Fiscal 2023, the Company’s adjusted pretax profit margin was 9.7%, which excludes a 0.4 percentage point charge related to a write-down of the Company’s minority investment in Familia. This is a 0.1 percentage point increase versus the Company’s full year Fiscal 2022 adjusted pretax profit margin of 9.6%, which excluded a 0.5 percentage point debt extinguishment charge. Full year Fiscal 2023 pretax profit margin included an unplanned 0.3 percentage point shrink charge. The Company’s most recent full year Fiscal 2023 guidance had contemplated that shrink would be neutral to pretax profit margin versus the prior year.

Gross profit margin for full year Fiscal 2023 was 27.6%, a 0.9 percentage point decrease versus the prior year. Selling, general and administrative (SG&A) costs as a percent of sales for the full year Fiscal 2023 were 17.9%, a 0.8 percentage point decrease versus the prior year.

During Fiscal 2023, the Company announced and completed the divestiture of its minority investment in Familia. As a result, the Company recorded an impairment charge of $217.6 million in the first quarter of Fiscal 2023, which negatively impacted first quarter Fiscal 2023 diluted earnings per share by $.19. Additionally, the Company realized a $54 million tax benefit in the third quarter of Fiscal 2023, which increased third quarter Fiscal 2023 diluted earnings per share by $.05. The combination of the first quarter impairment charge and the related third quarter tax benefit negatively impacted full year Fiscal 2023 diluted earnings per share by $.14.

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During the fiscal year ended January 28, 2023, the Company increased its store count by 146 stores to a total of 4,835 stores and increased square footage by 3% over the prior year.

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The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. As of January 28, 2023, the end of the Company’s fiscal year, the Company operated a total of 4,835 stores in nine countries, the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia, and five e-commerce sites. These include 1,299 T.J. Maxx, 1,183 Marshalls, 894 HomeGoods, 78 Sierra, and 46 Homesense stores, as well as tjmaxx.com, marshalls.com, homegoods.com, and sierra.com, in the United States; 297 Winners, 151 HomeSense, and 106 Marshalls stores in Canada; 629 T.K. Maxx and 78 Homesense stores, as well as tkmaxx.com, in Europe; and 74 T.K. Maxx stores in Australia.

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