TJX COMPANIES INC /DE/

The TJX Companies, Inc. is the leading off-price apparel and home fashions retailer in the United States and worldwide, operating over 5,200 stores ¹ and six branded e-commerce sites that offer a rapidly changing assortment of quality, fashionable, brand name and designer merchandise at prices generally 20% to 60% below full-price retailers’ regular prices on comparable merchandise, every day. The retail apparel and home fashion business is highly competitive, and TJX competes on numerous factors including brand, fashion, price, quality, selection and freshness; in-store and online shopping experience and service; reputation and store location. The company competes with local, regional, national and international department, specialty, off-price, discount, warehouse and outlet stores as well as other retailers that sell apparel, home fashions and other merchandise that we sell, whether in stores, online, or through other media or channels.

TJX is the leading off-price apparel and home fashions retailer in the United States and worldwide. The company's flexible business model, including opportunistic buying, inventory management, logistics and flexible store layouts, is designed to deliver a compelling value proposition of fashionable, quality, brand name and designer merchandise to customers at excellent values every day. The company's buying organization numbers over 1,400 employees ² and executes an opportunistic buying strategy, buying merchandise from more than 100 countries ³ in a variety of ways. Manufacturers, retailers and other vendors made up an expansive and changing universe of approximately 21,000 vendors ⁴ across the globe, including thousands of new vendors in fiscal 2026, which provides substantial and diversified access to merchandise.

TJX generates revenue primarily through merchandise sales in its stores and online, with net sales consisting of merchandise sales recorded net of a reserve for estimated returns, any discounts and sales taxes. The company also generates an immaterial amount of other revenues that represent less than 1% ⁵ of total revenues, including revenue generated by the TJX-branded credit card program. The company's customer segments reach a broad range of customers across income levels with its value proposition on a wide range of items. The company's strategies and operations are synergistic across its retail chains, allowing it to leverage expertise throughout the business, sharing information, best practices, initiatives and new ideas, and to develop talent across the company, as well as leverage the substantial buying power of its businesses with global vendor relationships.

The company operates four segments: Marmaxx, HomeGoods, TJX Canada, and TJX International. Marmaxx operates TJ Maxx and Marshalls chains in the United States, collectively the largest off-price retailer in the United States with a total of 2,603 stores ⁶, and also operates Sierra with 145 retail stores ⁷ in the U.S. and sierra.com. HomeGoods operates HomeGoods and Homesense chains in the U.S., with HomeGoods being the leading off-price retailer of home fashions in the U.S. through its 963 stores ⁸ and Homesense operating 79 stores ⁹. TJX Canada operates the Winners, HomeSense and Marshalls chains in Canada, with Winners operating 316 stores ¹⁰, HomeSense operating 162 stores ¹¹, and Marshalls operating 111 stores ¹². TJX International operates TK Maxx and Homesense chains in Europe and TK Maxx in Australia, with TK Maxx operating 673 stores ¹³ in Europe, Homesense operating 74 stores ¹⁴ in Europe, and TK Maxx operating 88 stores ¹⁵ in Australia.

During fiscal 2026, the company entered into a settlement agreement to resolve litigation related to credit card interchange fees in which it was a plaintiff, resulting in a gain of $419 million ¹⁶, net of $51 million ¹⁷ of legal expenses, recognized within SG&A expenses. The company also incurred additional non-recurring settlement-related expenses consisting of $116 million ¹⁸ related to a portion of incentive compensation expense globally and $82 million ¹⁹ related to a discretionary bonus for eligible non-bonus plan Associates globally. During fiscal 2026, the company returned $4.3 billion ²⁰ to shareholders through share repurchases and dividends. A dividend of $0.425 ²¹ per share was declared in the fourth quarter of fiscal 2026 and paid in March 2026. In February 2026, the company announced that its Board of Directors had approved a new stock repurchase program that authorized the repurchase of up to an additional $3 billion ²² of its common stock from time to time.

Net sales increased 7% to $60.4 billion ²³ for fiscal 2026 versus $56.4 billion ²⁴ for fiscal 2025. Consolidated comp sales increased 5% ²⁵ in fiscal 2026. Diluted earnings per share were $4.87 ²⁶ for fiscal 2026, compared to $4.26 ²⁷ for fiscal 2025. Pre-tax profit margin for fiscal 2026 was 12.1% ²⁸, a 0.6 percentage point increase compared to 11.5% ²⁹ for fiscal 2025. The cost of sales, including buying and occupancy costs, ratio for fiscal 2026 was 69.0% ³⁰, a 0.4 percentage point decrease compared to 69.4% ³¹ for fiscal 2025. The SG&A expense ratio for fiscal 2026 was 19.1% ³², a 0.3 percentage point decrease compared to 19.4% ³³ for fiscal 2025. Net cash provided by operating activities was $6.9 billion ³⁴ in fiscal 2026 and $6.1 billion ³⁵ in fiscal 2025.

The company expects capital expenditures in fiscal 2027 will be in the range of approximately $2.2 billion to $2.3 billion ³⁶ to support growth, including approximately $1 billion ³⁷ for store renovations, approximately $992 million ³⁸ for offices and distribution centers (including information technology systems) and approximately $222 million ³⁹ for new stores. The company currently plans to repurchase approximately $2.5 billion to $2.75 billion ⁴⁰ of stock under its stock repurchase programs in fiscal 2027. The company expects to pay quarterly dividends for fiscal 2027 of $0.48 ⁴¹ per share, or an annual dividend of $1.92 ⁴² per share, subject to the declaration and approval by the Board of Directors, representing a 13% ⁴³ increase over the per share dividends declared and paid in fiscal 2026.

Expansion of the business through the addition of new stores continues to be an important part of the company's global growth strategy. In fiscal 2027, the company expects to open 45 Marmaxx net new stores ⁴⁴ and 24 new Sierra stores ⁴⁵, which would increase selling square footage by approximately 2% ⁴⁶. In HomeGoods, the company expects to open 24 new HomeGoods stores ⁴⁷ and 11 new Homesense stores ⁴⁸, which would increase selling square footage by approximately 4% ⁴⁹. In TJX Canada, the company expects to open 13 new stores ⁵⁰, which would increase selling square footage by approximately 3% ⁵¹. In TJX International, the company expects to open 19 net new stores in Europe ⁵² and 10 new stores in Australia ⁵³, which would increase selling square footage by approximately 3% ⁵⁴. The company's estimated long-term store potential in current geographies is 7,000 stores ⁵⁵.

The company's cost of sales, including buying and occupancy costs, as a percentage of net sales was 69.0% ⁵⁶ for fiscal 2026, a decrease of 0.4 percentage points compared to 69.4% ⁵⁷ of net sales for fiscal 2025, due to favorable merchandise margin and expense leverage on higher comp sales. Merchandise margin reflects lower freight costs and lower inventory shrink expense. SG&A expenses, as a percentage of net sales, was 19.1% ⁵⁸ for fiscal 2026, a decrease of 0.3 percentage points compared to 19.4% ⁵⁹ for fiscal 2025, due to a net benefit from the credit card interchange fees litigation settlement and related expenses.

The company operates distribution centers encompassing approximately 31 million square feet ⁶⁰ in six countries. The company's logistics and distribution operations are designed to support global buying strategies and to facilitate quick, efficient and differentiated delivery of merchandise to stores, with a goal of delivering the right merchandise to the right stores at the right time. The company invests in its supply chain with the goal of continuing to operate with low inventory levels, to ship more efficiently and quickly, and to more precisely and effectively allocate merchandise to each store.

The company expects capital expenditures in fiscal 2027 will be in the range of approximately $2.2 billion to $2.3 billion ⁶¹ to support growth, including approximately $1 billion ⁶² for store renovations, approximately $992 million ⁶³ for offices and distribution centers (including information technology systems) and approximately $222 million ⁶⁴ for new stores. The company currently plans to repurchase approximately $2.5 billion to $2.75 billion ⁶⁵ of stock under its stock repurchase programs in fiscal 2027. The company expects to pay quarterly dividends for fiscal 2027 of $0.48 ⁶⁶ per share, or an annual dividend of $1.92 ⁶⁷ per share, subject to the declaration and approval by the Board of Directors, representing a 13% ⁶⁸ increase over the per share dividends declared and paid in fiscal 2026.

The company continues to closely monitor changes in international trade relations, economic and monetary policies, and legislation and regulations including those related to tariffs on imports from China and other countries. On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which may allow for the recovery of IEEPA tariff amounts previously paid, though the timing and administration of any potential IEEPA tariff refunds is unknown and may be subject to further legal and regulatory developments. Subsequent to the U.S. Supreme Court's ruling, an executive order was issued imposing a new global tariff, in addition to any existing non-IEEPA tariffs. The extent and duration of the tariffs and the resulting impact on general economic conditions and on the company's business are uncertain and depend on various factors, such as further changes to the U.S. government tariff policies, negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of merchandise, and the buying organization's ability to execute the merchandise sourcing model to offset the effects of the tariffs.

The company's business is subject to seasonal influences, generally realizing higher levels of sales and earnings in the second half of the year, which includes the back-to-school and year-end holiday seasons. Any significant, unplanned decrease in sales or margins or any significant adverse event or disruption that impacts the business during this period could have a disproportionately adverse effect on results of operations. The company's operating results have fluctuated from quarter to quarter, sometimes significantly, at points in the past and may do so again in the future, and if the company fails to increase results over prior periods, to achieve projected results or to meet the expectations of securities analysts or investors, the stock price may decline.

Failure to execute the opportunistic buying strategy and successfully manage inventory could adversely affect results, as customer transactions, sales, margins and other financial results could be adversely affected if the company does not obtain and allocate the right merchandise at the right times, in the right quantities, at the right prices, in the right mix and into the right stores. The company sources merchandise globally, subjecting it to risks including potential disruptions in manufacturing and supply, transport availability and costs, tariffs, duties, trade restrictions, sanctions, quotas and voluntary export restrictions on imported merchandise, and changes to international trade agreements or enforcement practices. Compromises of cybersecurity or disruptions in IT systems could result in material loss or liability, materially impact operating results or materially harm reputation, as the company relies heavily on IT systems to manage key aspects of its business including planning, purchasing, sales, supply chain management, logistics, inventory management, human resources, financial management, communications, information security and legal and regulatory compliance. Fluctuations in currency exchange rates may lead to lower revenues and earnings, as sales made by stores outside the U.S. are denominated in the currency of the country in which the store is located, and changes in currency exchange rates affect the translation of sales and earnings of these businesses into U.S. dollars for financial reporting purposes, with a sensitivity analysis indicating a potential impact of approximately $132 million ⁶⁹ on pre-tax income in fiscal 2026 from a hypothetical 10% movement in translation of foreign operations.

Management's message emphasizes the company's position as the leading off-price apparel and home fashions retailer in the United States and worldwide, with a mission to deliver great value to customers every day. Key themes include the successful execution of the flexible business model, opportunistic buying strategies, and the company's ability to leverage expertise across its retail chains. Forward-looking statements include expectations for fiscal 2027 capital expenditures in the range of approximately $2.2 billion to $2.3 billion ⁷⁰, plans to repurchase approximately $2.5 billion to $2.75 billion ⁷¹ of stock, and expected quarterly dividends of $0.48 ⁷² per share, or an annual dividend of $1.92 ⁷³ per share, representing a 13% ⁷⁴ increase over fiscal 2026. Strategic priorities emphasized include continued store growth with estimated long-term store potential of 7,000 stores ⁷⁵ in current geographies, ongoing investment in the supply chain and information technology systems, and mitigation of tariff pressures through the buying organization's ability to execute the merchandise sourcing model.