TJX(TJX)2023-08-24 16:00Financial Performance - Net sales increased 8% to $12.8 billion for Q2 FY2024 compared to $11.8 billion in Q2 FY2023[72] - Consolidated comp store sales increased 6% for Q2 FY2024[72] - Diluted earnings per share for Q2 FY2024 were $0.85, up from $0.69 in Q2 FY2023[72] - Pre-tax profit margin for Q2 FY2024 was 10.4%, a 1.2 percentage point increase from 9.2% in Q2 FY2023[72] - Cost of sales ratio decreased by 2.6 percentage points to 69.8% in Q2 FY2024 compared to 72.4% in Q2 FY2023[72] - SG&A expense ratio increased by 1.7 percentage points to 20.1% in Q2 FY2024 compared to 18.4% in Q2 FY2023[72] - Net sales for the six months ended July 29, 2023 totaled $24.5 billion, a 6% increase from $23.2 billion in the same period of FY2023[76] - Comp store sales increased 4% for the first six months of FY2024[76] - Net income for Q2 fiscal 2024 was $1 billion, or $0.85 per diluted share, compared to $810 million, or $0.69 per diluted share, in Q2 fiscal 2023[87] Segment Performance - Net sales for Marmaxx in Q2 fiscal 2024 were $7.9 billion, a 9% increase compared to $7.2 billion in Q2 fiscal 2023, driven by an 8% increase in comp store sales[92] - Segment profit margin for Marmaxx increased to 13.7% in Q2 fiscal 2024 from 12.9% in Q2 fiscal 2023, driven by improved merchandise margin[93] - Net sales for HomeGoods in Q2 fiscal 2024 were $2 billion, an 8% increase compared to $1.9 billion in Q2 fiscal 2023, with a 4% increase in comp store sales[96] - Segment profit margin for HomeGoods increased to 8.7% in Q2 fiscal 2024 from 2.7% in Q2 fiscal 2023, driven by higher merchandise margin[97] - Net sales for TJX Canada in Q2 fiscal 2024 were $1.2 billion, a 2% decrease compared to Q2 fiscal 2023, with a 1% increase in comp store sales[99] - Segment profit margin for TJX Canada decreased to 15.7% in Q2 fiscal 2024 from 15.8% in Q2 fiscal 2023, driven by higher incentive compensation costs[99] - TJX International's net sales for Q2 fiscal 2024 increased by 8% to $1.6 billion compared to $1.5 billion in Q2 fiscal 2023, driven by a 4% positive foreign currency impact and a 3% increase in comp store sales[103] - TJX International's net sales for the first six months of fiscal 2024 increased by 4% to $3 billion compared to $2.9 billion in the same period last year, with a 4% increase in comp store sales partially offset by a 1% negative foreign currency impact[103] - TJX International's segment profit margin decreased to 2.0% in Q2 fiscal 2024 from 7.0% in Q2 fiscal 2023, primarily due to a reserve related to a German government COVID program receivable and higher administrative costs[104] - TJX International's segment profit margin decreased to 2.3% in the first six months of fiscal 2024 from 4.0% in the same period last year, driven by similar factors as in Q2[104] E-commerce Performance - The Marmaxx e-commerce sites represented less than 3% of Marmaxx's net sales in Q2 fiscal 2024[93] - The HomeGoods e-commerce website represented less than 1% of HomeGoods net sales in Q2 fiscal 2024[97] - TJX International launched online shopping in Germany and Austria during Q2 fiscal 2024, with e-commerce sales representing less than 3% of net sales for the quarter[103] Cash Flow and Capital Allocation - The company returned $932 million to shareholders through share repurchases and dividends in Q2 FY2024[72] - TJX held $4.6 billion in cash as of July 29, 2023, with $1.5 billion available under credit facilities, and plans to use operating cash flow and cash on hand for debt repayment[107] - TJX's operating activities generated net cash inflows of $2.1 billion for the first six months of fiscal 2024, compared to $6 million in the same period last year, primarily due to changes in merchandise inventories[108] - TJX anticipates capital spending for fiscal 2024 to be between $1.7 billion and $1.9 billion, funded by existing cash balances and internally generated funds[109] - TJX repurchased and retired 13.1 million shares for $1 billion in the first six months of fiscal 2024, with $2.5 billion remaining under its stock repurchase programs[112] Risks and Uncertainties - No material changes in primary risk exposures or management of market risks from the Annual Report on Form 10-K for the fiscal year ended January 28, 2023[117] - Forward-looking statements include anticipated operating and financial performance, business plans, dividends, share repurchases, and pension payout impact[116] - Risks and uncertainties include execution of buying strategy, inventory management, customer trends, competition, and operational expansion[116] - COVID-19 or other public health issues may affect operations and consumer behavior[116] - Challenges in labor costs, workforce management, and personnel recruitment and retention[116] - Fluctuations in quarterly operating results, market expectations, and economic conditions[116] - Potential impacts of mergers, acquisitions, divestitures, and real estate activities[116] - Compliance with evolving regulations, including environmental, social, and governance matters[116] - Risks related to merchandise quality, safety, and sourcing, as well as data security and IT systems[116] - Outcomes of litigation, legal proceedings, and changes in laws or accounting standards[116] Inventory and Expenses - Consolidated average per store inventories decreased by 6% at the end of Q2 FY2024[72] - TJX's general corporate expense increased to $194 million in Q2 fiscal 2024 from $188 million in Q2 fiscal 2023, driven by higher incentive and share-based compensation costs[106] Foreign Currency Impact - Foreign currency had a $0.01 negative impact on earnings per share in Q2 fiscal 2024[87]