| ☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
April 30, 2022
| ☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
| Delaware | 04-2207613 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| 770 Cochituate Road Framingham, Massachusetts | 01701 | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, par value $1.00 per share | TJX | New York Stock Exchange | ||||||
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||||||||
| ☐ | ||||||||||||||||||||
| Emerging growth company | ☐ | |||||||||||||||||||
May 20, 2022: 1,171,635,933
Statements
| Thirteen Weeks Ended | ||||||||
| October 28, 2017 | October 29, 2016 | |||||||
Net sales | $ | 8,762,220 | $ | 8,291,688 | ||||
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Cost of sales, including buying and occupancy costs | 6,150,020 | 5,843,873 | ||||||
Selling, general and administrative expenses | 1,584,219 | 1,462,574 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 7,981 | 12,462 | ||||||
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Income before provision for income taxes | 1,020,000 | 889,833 | ||||||
Provision for income taxes | 378,564 | 340,047 | ||||||
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Net income | $ | 641,436 | $ | 549,786 | ||||
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Basic earnings per share: | ||||||||
Net income | $ | 1.01 | $ | 0.84 | ||||
Weighted average common shares – basic | 634,022 | 653,559 | ||||||
Diluted earnings per share: | ||||||||
Net income | $ | 1.00 | $ | 0.83 | ||||
Weighted average common shares – diluted | 642,881 | 661,721 | ||||||
Cash dividends declared per share | $ | 0.3125 | $ | 0.2600 | ||||
| Thirteen Weeks Ended | ||||||||||||||
| April 30, 2022 | May 1, 2021 | |||||||||||||
| Net sales | $ | 11,406,474 | $ | 10,086,661 | ||||||||||
| Cost of sales, including buying and occupancy costs | 8,223,213 | 7,255,635 | ||||||||||||
| Selling, general and administrative expenses | 2,094,582 | 2,064,992 | ||||||||||||
| Impairment on equity investment | 217,619 | — | ||||||||||||
| Interest expense, net | 18,785 | 44,688 | ||||||||||||
| Income before income taxes | 852,275 | 721,346 | ||||||||||||
| Provision for income taxes | 264,802 | 187,416 | ||||||||||||
| Net income | $ | 587,473 | $ | 533,930 | ||||||||||
| Basic earnings per share | $ | 0.50 | $ | 0.44 | ||||||||||
| Weighted average common shares – basic | 1,177,141 | 1,205,439 | ||||||||||||
| Diluted earnings per share | $ | 0.49 | $ | 0.44 | ||||||||||
| Weighted average common shares – diluted | 1,189,263 | 1,221,517 | ||||||||||||
2
| Thirty-Nine Weeks Ended | ||||||||
| October 28, 2017 | October 29, 2016 | |||||||
Net sales | $ | 24,903,944 | $ | 23,716,097 | ||||
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| |||||
Cost of sales, including buying and occupancy costs | 17,652,767 | 16,778,977 | ||||||
Selling, general and administrative expenses | 4,479,470 | 4,190,872 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 27,499 | 33,918 | ||||||
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| |||||
Income before provision for income taxes | 2,744,208 | 2,629,384 | ||||||
Provision for income taxes | 1,013,536 | 1,009,078 | ||||||
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| |||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
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| |||||
Basic earnings per share: | ||||||||
Net income | $ | 2.71 | $ | 2.46 | ||||
Weighted average common shares – basic | 639,191 | 657,746 | ||||||
Diluted earnings per share: | ||||||||
Net income | $ | 2.67 | $ | 2.43 | ||||
Weighted average common shares – diluted | 648,672 | 666,632 | ||||||
Cash dividends declared per share | $ | 0.9375 | $ | 0.7800 | ||||
| Thirteen Weeks Ended | ||||||||||||||
| April 30, 2022 | May 1, 2021 | |||||||||||||
| Net income | $ | 587,473 | $ | 533,930 | ||||||||||
| Additions to other comprehensive (loss) income: | ||||||||||||||
| Foreign currency translation adjustments, net of related tax benefit of $574 in fiscal 2023 and tax provision of $2,898 in fiscal 2022 | (57,612) | 22,249 | ||||||||||||
| Reclassifications from other comprehensive (loss) income to net income: | ||||||||||||||
| Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $1,375 in fiscal 2023 and $1,056 in fiscal 2022 | 3,778 | 2,901 | ||||||||||||
| Amortization of loss on cash flow hedge, net of related tax provision of $603 in fiscal 2022 | — | (263) | ||||||||||||
| Other comprehensive (loss) income, net of tax | (53,834) | 24,887 | ||||||||||||
| Total comprehensive income | $ | 533,639 | $ | 558,817 | ||||||||||
3
BALANCE SHEETS
| Thirteen Weeks Ended | ||||||||
| October 28, 2017 | October 29, 2016 | |||||||
Net income | $ | 641,436 | $ | 549,786 | ||||
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| |||||
Additions to other comprehensive income: | ||||||||
Foreign currency translation adjustments, net of related tax benefits of $18,110 in fiscal 2018 and $14,123 in fiscal 2017 | (46,029 | ) | (94,590 | ) | ||||
Recognition of net (losses) on benefit obligations, net of related tax benefit of $47,051 in fiscal year 2017 | — | (71,525 | ) | |||||
Reclassifications from other comprehensive income to net income: | ||||||||
Pension settlement charge, net of related tax provision of $12,369 in fiscal 2017 | — | 18,804 | ||||||
Amortization of prior service cost and deferred gains, net of related tax provisions of $2,414 in fiscal 2018 and $3,462 in fiscal 2017 | 3,669 | 5,263 | ||||||
Amortization of loss on cash flow hedge, net of related tax provisions of $112 in fiscal 2018 and $112 in fiscal 2017 | 171 | 171 | ||||||
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Other comprehensive (loss), net of tax | (42,189 | ) | (141,877 | ) | ||||
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| |||||
Total comprehensive income | $ | 599,247 | $ | 407,909 | ||||
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| Thirty-Nine Weeks Ended | ||||||||
| October 28, 2017 | October 29, 2016 | |||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
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|
| |||||
Additions to other comprehensive income: | ||||||||
Foreign currency translation adjustments, net of related tax provision of $16,212 in fiscal 2018 and benefit of $17,241 in fiscal 2017 | 79,393 | (93,304 | ) | |||||
Recognition of net (losses) on benefit obligations, net of related tax benefit of $47,051 in fiscal year 2017 | — | (71,525 | ) | |||||
Reclassifications from other comprehensive income to net income: | ||||||||
Pension settlement charge, net of related tax provision of $12,369 in fiscal 2017 | — | 18,804 | ||||||
Amortization of prior service cost and deferred gains, net of related tax provisions of $7,500 in fiscal 2018 and $7,517 in fiscal 2017 | 11,401 | 11,427 | ||||||
Amortization of loss on cash flow hedge, net of related tax provisions of $337 in fiscal 2018 and $337 in fiscal 2017 | 513 | 513 | ||||||
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| |||||
Other comprehensive income (loss), net of tax | 91,307 | (134,085 | ) | |||||
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Total comprehensive income | $ | 1,821,979 | $ | 1,486,221 | ||||
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EXCEPT SHARE DATA
| April 30, 2022 | January 29, 2022 | May 1, 2021 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 4,295,068 | $ | 6,226,765 | $ | 8,775,485 | |||||
| Accounts receivable, net | 576,300 | 517,623 | 621,177 | ||||||||
| Merchandise inventories | 6,989,788 | 5,961,573 | 5,114,643 | ||||||||
| Prepaid expenses and other current assets | 565,351 | 438,099 | 440,533 | ||||||||
| Federal, state and foreign income taxes recoverable | 53,715 | 114,537 | 64,211 | ||||||||
| Total current assets | 12,480,222 | 13,258,597 | 15,016,049 | ||||||||
| Net property at cost | 5,289,164 | 5,270,827 | 5,067,824 | ||||||||
| Non-current deferred income taxes, net | 177,425 | 184,971 | 135,765 | ||||||||
| Operating lease right of use assets | 9,066,865 | 8,853,934 | 9,121,628 | ||||||||
| Goodwill | 96,910 | 96,662 | 99,324 | ||||||||
| Other assets | 599,318 | 796,467 | 860,844 | ||||||||
| Total Assets | $ | 27,709,904 | $ | 28,461,458 | $ | 30,301,434 | |||||
| Liabilities | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 4,370,563 | $ | 4,465,427 | $ | 4,433,295 | |||||
| Accrued expenses and other current liabilities | 3,811,585 | 4,244,997 | 3,536,637 | ||||||||
| Current portion of operating lease liabilities | 1,575,582 | 1,576,561 | 1,650,574 | ||||||||
| Federal, state and foreign income taxes payable | 260,789 | 181,155 | 286,455 | ||||||||
| Total current liabilities | 10,018,519 | 10,468,140 | 9,906,961 | ||||||||
| Other long-term liabilities | 908,907 | 1,015,720 | 1,033,236 | ||||||||
| Non-current deferred income taxes, net | 54,063 | 44,175 | 33,930 | ||||||||
| Long-term operating lease liabilities | 7,777,160 | 7,575,590 | 7,853,229 | ||||||||
| Long-term debt | 3,355,815 | 3,354,841 | 5,334,864 | ||||||||
| Commitments and contingencies (See Note K) | 0 | 0 | 0 | ||||||||
| Shareholders’ equity | |||||||||||
| Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued | — | — | — | ||||||||
| Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,172,711,116; 1,181,188,731 and 1,206,386,746 respectively | 1,172,711 | 1,181,189 | 1,206,387 | ||||||||
| Additional paid-in capital | — | — | 321,475 | ||||||||
| Accumulated other comprehensive loss | (740,984) | (687,150) | (581,184) | ||||||||
| Retained earnings | 5,163,713 | 5,508,953 | 5,192,536 | ||||||||
| Total shareholders’ equity | 5,595,440 | 6,002,992 | 6,139,214 | ||||||||
| Total liabilities and shareholders’ equity | $ | 27,709,904 | $ | 28,461,458 | $ | 30,301,434 | |||||
4
STATEMENTS OF CASH FLOWS
| October 28, 2017 | January 28, 2017 | October 29, 2016 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 2,364,244 | $ | 2,929,849 | $ | 2,375,532 | ||||||
Short-term investments | 511,618 | 543,242 | 450,804 | |||||||||
Accounts receivable, net | 345,866 | 258,831 | 306,426 | |||||||||
Merchandise inventories | 4,725,850 | 3,644,959 | 4,384,171 | |||||||||
Prepaid expenses and other current assets | 422,719 | 358,058 | 409,986 | |||||||||
Federal, state, and foreign income taxes recoverable | 19,737 | 15,835 | 15,415 | |||||||||
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Total current assets | 8,390,034 | 7,750,774 | 7,942,334 | |||||||||
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| |||||||
Net property at cost | 4,858,284 | 4,532,894 | 4,318,829 | |||||||||
Non-current deferred income taxes, net | 6,655 | 6,193 | 3,624 | |||||||||
Goodwill | 196,365 | 195,871 | 196,011 | |||||||||
Other assets | 426,357 | 398,076 | 406,038 | |||||||||
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TOTAL ASSETS | $ | 13,877,695 | $ | 12,883,808 | $ | 12,866,836 | ||||||
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LIABILITIES | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 2,986,374 | $ | 2,230,904 | $ | 2,686,845 | ||||||
Accrued expenses and other current liabilities | 2,361,422 | 2,320,464 | 2,155,587 | |||||||||
Federal, state and foreign income taxes payable | 120,185 | 206,288 | 52,082 | |||||||||
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Total current liabilities | 5,467,981 | 4,757,656 | 4,894,514 | |||||||||
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| |||||||
Other long-term liabilities | 1,159,975 | 1,073,954 | 1,098,491 | |||||||||
Non-current deferred income taxes, net | 374,276 | 314,000 | 317,107 | |||||||||
Long-term debt | 2,229,855 | 2,227,599 | 2,226,913 | |||||||||
Commitments and contingencies (See Note K) | ||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||
Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued | — | — | — | |||||||||
Common stock, authorized 1,200,000,000 shares, par value $1, issued and outstanding 632,302,505; 646,319,046 and 651,900,739 respectively | 632,303 | 646,319 | 651,901 | |||||||||
Additionalpaid-in capital | — | — | — | |||||||||
Accumulated other comprehensive (loss) | (602,919 | ) | (694,226 | ) | (801,557 | ) | ||||||
Retained earnings | 4,616,224 | 4,558,506 | 4,479,467 | |||||||||
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| |||||||
Total shareholders’ equity | 4,645,608 | 4,510,599 | 4,329,811 | |||||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 13,877,695 | $ | 12,883,808 | $ | 12,866,836 | ||||||
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| Thirteen Weeks Ended | |||||||||||
| April 30, 2022 | May 1, 2021 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 587,473 | $ | 533,930 | |||||||
| Adjustments to reconcile net income to cash (used in) operating activities: | |||||||||||
| Depreciation and amortization | 219,605 | 215,379 | |||||||||
| Impairment on equity investment | 217,619 | — | |||||||||
| Loss on property disposals and impairment charges | 3,883 | 931 | |||||||||
| Deferred income tax provision (benefit) | 11,501 | (16,181) | |||||||||
| Share-based compensation | 27,336 | 50,536 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| (Increase) in accounts receivable | (65,740) | (156,999) | |||||||||
| (Increase) in merchandise inventories | (1,085,340) | (750,553) | |||||||||
| Decrease (increase) in income taxes recoverable | 60,822 | (27,949) | |||||||||
| (Increase) decrease in prepaid expenses and other current assets | (32,816) | 12,254 | |||||||||
| (Decrease) in accounts payable | (52,817) | (410,244) | |||||||||
| (Decrease) increase in accrued expenses and other liabilities | (565,135) | 12,214 | |||||||||
| Increase in income taxes payable | 77,329 | 203,740 | |||||||||
| (Decrease) in net operating lease liabilities | (3,851) | (50,319) | |||||||||
| Other, net | (34,345) | (49,466) | |||||||||
| Net cash (used in) operating activities | (634,476) | (432,727) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Property additions | (314,351) | (225,293) | |||||||||
| Purchases of investments | (15,649) | (7,345) | |||||||||
| Sales and maturities of investments | 5,528 | 7,733 | |||||||||
| Net cash (used in) investing activities | (324,472) | (224,905) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Payments on debt | — | (750,000) | |||||||||
| Payments for repurchase of common stock | (607,201) | — | |||||||||
| Cash dividends paid | (309,485) | (315,215) | |||||||||
| Proceeds from issuance of common stock | 18,055 | 36,539 | |||||||||
| Payments of employee tax withholdings for performance based stock awards | (32,459) | (24,426) | |||||||||
| Net cash (used in) financing activities | (931,090) | (1,053,102) | |||||||||
| Effect of exchange rate changes on cash | (41,659) | 16,649 | |||||||||
| Net (decrease) in cash and cash equivalents | (1,931,697) | (1,694,085) | |||||||||
| Cash and cash equivalents at beginning of year | 6,226,765 | 10,469,570 | |||||||||
| Cash and cash equivalents at end of period | $ | 4,295,068 | $ | 8,775,485 | |||||||
5
SHAREHOLDERS’ EQUITY
| Thirty-Nine Weeks Ended | ||||||||
| October 28, 2017 | October 29, 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 532,424 | 492,395 | ||||||
Loss on property disposals and impairment charges | 2,209 | 1,648 | ||||||
Deferred income tax provision | 35,802 | 52,629 | ||||||
Share-based compensation | 77,152 | 77,380 | ||||||
Excess tax benefits from share-based compensation | — | (60,332 | ) | |||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Changes in assets and liabilities: | ||||||||
(Increase) in accounts receivable | (84,403 | ) | (72,487 | ) | ||||
(Increase) in merchandise inventories | (1,042,664 | ) | (758,601 | ) | ||||
(Increase) in taxes recoverable | (3,902 | ) | (4,356 | ) | ||||
(Increase) in prepaid expenses and other current assets | (50,357 | ) | (38,174 | ) | ||||
Increase in accounts payable | 733,340 | 524,981 | ||||||
Increase in accrued expenses and other liabilities | 83,082 | 232,910 | ||||||
(Decrease) in income taxes payable | (86,842 | ) | (19,000 | ) | ||||
Other | 2,910 | (19,986 | ) | |||||
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Net cash provided by operating activities | 1,929,423 | 2,112,259 | ||||||
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Cash flows from investing activities: | ||||||||
Property additions | (827,529 | ) | (767,197 | ) | ||||
Purchase of investments | (630,079 | ) | (533,807 | ) | ||||
Sales and maturities of investments | 658,225 | 432,046 | ||||||
Other | — | (2,324 | ) | |||||
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Net cash (used in) investing activities | (799,383 | ) | (871,282 | ) | ||||
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Cash flows from financing activities: | ||||||||
Proceeds from issuance of long-term debt | 992,540 | |||||||
Cash payments for extinguishment of debt | — | (425,584 | ) | |||||
Cash payments for repurchase of common stock | (1,238,982 | ) | (1,175,000 | ) | ||||
Cash payments for debt issuance expenses | (9,921 | ) | ||||||
Cash payment for rate lock agreement | — | (3,150 | ) | |||||
Proceeds from issuance of common stock | 89,198 | 110,902 | ||||||
Excess tax benefits from share-based compensation | — | 60,332 | ||||||
Cash dividends paid | (566,949 | ) | (481,859 | ) | ||||
Cash payments of employee tax withholdings for performance based stock awards | (16,823 | ) | (24,965 | ) | ||||
Other | (2,312 | ) | — | |||||
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| |||||
Net cash (used in) financing activities | (1,735,868 | ) | (956,705 | ) | ||||
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Effect of exchange rate changes on cash | 40,223 | (4,213 | ) | |||||
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Net (decrease) increase in cash and cash equivalents | (565,605 | ) | 280,059 | |||||
Cash and cash equivalents at beginning of year | 2,929,849 | 2,095,473 | ||||||
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Cash and cash equivalents at end of period | $ | 2,364,244 | $ | 2,375,532 | ||||
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| Thirteen Weeks Ended | ||||||||||||||||||||
| Common Stock | ||||||||||||||||||||
| Shares | Par Value $1 | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||
| Balance, January 29, 2022 | 1,181,189 | $ | 1,181,189 | $ | — | $ | (687,150) | $ | 5,508,953 | $ | 6,002,992 | |||||||||
| Net income | — | — | — | — | 587,473 | 587,473 | ||||||||||||||
| Other comprehensive (loss), net of tax | — | — | — | (53,834) | — | (53,834) | ||||||||||||||
| Cash dividends declared on common stock | — | — | — | — | (346,922) | (346,922) | ||||||||||||||
| Recognition of share-based compensation | — | — | 27,336 | — | — | 27,336 | ||||||||||||||
| Issuance of common stock under stock incentive plan, and related tax effect | 1,145 | 1,145 | (15,549) | — | — | (14,404) | ||||||||||||||
| Common stock repurchased | (9,623) | (9,623) | (11,787) | — | (585,791) | (607,201) | ||||||||||||||
| Balance, April 30, 2022 | 1,172,711 | $ | 1,172,711 | $ | — | $ | (740,984) | $ | 5,163,713 | $ | 5,595,440 | |||||||||
| Thirteen Weeks Ended | ||||||||||||||||||||
| Common Stock | ||||||||||||||||||||
| Shares | Par Value $1 | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||
| Balance, January 30, 2021 | 1,204,698 | $ | 1,204,698 | $ | 260,515 | $ | (606,071) | $ | 4,973,542 | $ | 5,832,684 | |||||||||
| Net income | — | — | — | — | 533,930 | 533,930 | ||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 24,887 | — | 24,887 | ||||||||||||||
| Cash dividends declared on common stock | — | — | — | — | (314,936) | (314,936) | ||||||||||||||
| Recognition of share-based compensation | — | — | 50,536 | — | — | 50,536 | ||||||||||||||
| Issuance of common stock under stock incentive plan, and related tax effect | 1,689 | 1,689 | 10,424 | — | — | 12,113 | ||||||||||||||
| Balance, May 1, 2021 | 1,206,387 | $ | 1,206,387 | $ | 321,475 | $ | (581,184) | $ | 5,192,536 | $ | 6,139,214 | |||||||||
6
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(UNAUDITED)
IN THOUSANDS
| Accumulated | ||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||
| Shares | Par Value $1 | |||||||||||||||||||||||
Balance, January 28, 2017 | 646,319 | $ | 646,319 | $ | — | $ | (694,226 | ) | $ | 4,558,506 | $ | 4,510,599 | ||||||||||||
Net income | — | — | — | — | 1,730,672 | 1,730,672 | ||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | 91,307 | — | 91,307 | ||||||||||||||||||
Cash dividends declared on common stock | — | — | — | — | (597,595 | ) | (597,595 | ) | ||||||||||||||||
Recognition of share-based compensation | — | — | 77,152 | — | — | 77,152 | ||||||||||||||||||
Issuance of common stock under Stock Incentive Plan, net of shares used to pay tax withholdings | 2,726 | 2,726 | 69,729 | — | — | 72,455 | ||||||||||||||||||
Common stock repurchased and retired | (16,742 | ) | (16,742 | ) | (146,881 | ) | — | (1,075,359 | ) | (1,238,982 | ) | |||||||||||||
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Balance, October 28, 2017 | 632,303 | $ | 632,303 | $ | — | $ | (602,919 | ) | $ | 4,616,224 | $ | 4,645,608 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
The accompanying notes are an integral part of the unaudited consolidated financial statements.
7
THE TJX COMPANIES, INC.
and Summary of Significant Accounting Policies
Future Adoption of New Accounting Standards
Revenue Recognition
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued updated guidance on revenue recognition. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard will be effective for annual reporting periods beginning after December 15, 2017, and interim periods therein, with an option to adopt the standard early. The standard shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. We believe that there will be no change in the timing or amount of revenue recognized under the new standard as it relates to revenue from point of sale at the registers in our stores, which constitutes more than 95% of the Company’s revenue. Sales frome-commerce will be recognized at the shipping point rather than receipt by the customer. We believe there will be a slight change in the presentation and timing of revenue related to loyalty benefit programs. The new standard will require a change in the presentation of our sales return reserve on the balance sheet, which we currently record net. The new standard will require the reserve to be established at the gross sales value with an asset established for the value of the merchandise returned. We do not expect these changes to have a material
8
impact on our financial condition or results of operations other than additional disclosure requirements. We plan to adopt this standard in the first quarter of the fiscal year ending February 2, 2019 under the modified retrospective approach, which will result in a cumulative adjustment to retained earnings. We continue to evaluate TJX considered the impact this standard will haveof COVID-19 on our Consolidated Financial Statements and Notes thereto.
Leases
In February 2016, the FASB issued updated guidance on leases that aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. The new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption is permitted and modified retrospective application is required. The Company has established a cross-functional team to implement the updated lease guidance and is in the process of evaluating its lease portfolioestimates and the impactCompany cannot reasonably estimate with certainty the duration and severity of this standard will have on our Consolidated Financial Statementspandemic which has had, and Notes thereto. The Company expects this standardmay continue to have, a material impact on its statementbusiness, results of operations, financial conditionposition and cash flows.
| In thousands | April 30, 2022 | May 1, 2021 | ||||||
| Balance, beginning of year | $ | 685,202 | $ | 576,187 | ||||
| Deferred revenue | 383,892 | 323,773 | ||||||
| Effect of exchange rates changes on deferred revenue | (2,645) | 2,899 | ||||||
| Revenue recognized | (443,944) | (365,854) | ||||||
| Balance, end of period | $ | 622,505 | $ | 537,005 | ||||
| Thirteen Weeks Ended | ||||||||
| In thousands | April 30, 2022 | May 1, 2021 | ||||||
| Operating cash flows paid for operating leases | $ | 488,233 | $ | 531,836 | ||||
| Lease liabilities arising from obtaining right of use assets | $ | 756,609 | $ | 488,666 | ||||
Cash Flows
In August 2016, a pronouncement was issued that addresses diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. The standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and earlyits Consolidated Financial Statements upon adoption is permitted. TJX does not expect this standard to have a material impact on our consolidated financial statements.
Goodwill
In January 2017, the FASB issued updated guidance on goodwill that aims to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, goodwill impairment will be measured as the amount by which the carrying value exceeds the fair value. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. The new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods. Early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017. TJX does not expect the adoption of this standard to have a material impact on our consolidated financial statements.
Retirement Benefits
In March 2017, the FASB issued updated guidance related to retirement benefits, which requires that an employer report the service cost component of net periodic pension and net periodic post retirement cost in the same line item as other compensation costs arising from services rendered by the employees during the period. It also requires the other components of net periodic pension and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component is eligible for capitalization. This pronouncement is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. The amendments in this update should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We are currently evaluating the presentation of the other components of net benefit cost. The Company has not yet determined the timing for adoption or estimated the effect on the Company’s financial statements.
9
Hedging Activities
In August 2017, the FASB issued updated guidance on hedge accounting. The updates allow hedge accounting for new types of interest rate hedges of financial instruments and simplify documentation requirements to qualify for hedge accounting. In addition, any gain or loss from hedge ineffectiveness will be reported in the same income statement line with the effective hedge results and the hedged transaction. The updated guidance is effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet determined the timing for adoption or estimated the effect on the Company’s financial statements.
Recently Adopted Accounting Standards
Share Based Compensation
In the first quarter of 2017, TJX adopted a pronouncement that aims to simplify several aspects of accounting and reporting for share-based payment transactions. One provision within this pronouncement requires that excess income tax benefits and tax deficiencies related to share-based payments be recognized within income tax expense in the statement of income, rather than within additionalpaid-in capital on the balance sheet. The adoption of this provision is to be applied prospectively. The impact to TJX’s results of operations related to this provision for the three and nine months ended October 28, 2017 was a decrease in the provision for income taxes of $12.6 million and $40.5 million, respectively. The impact of this benefit on TJX’s future results of operations will depend in part on the market prices for TJX’s shares on the dates there are taxable events related to share awards, and therefore, the impact is difficult to predict. The remaining provisions within the pronouncement didthey are not have a material impact on our consolidated financial statements.
disclosed.
In thousands | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
Land and buildings | $ | 1,294,992 | $ | 1,247,585 | $ | 1,118,739 | ||||||
Leasehold costs and improvements | 3,145,922 | 2,884,054 | 2,811,515 | |||||||||
Furniture, fixtures and equipment | 5,172,488 | 4,871,764 | 4,725,863 | |||||||||
|
|
|
|
|
| |||||||
Total property at cost | $ | 9,613,402 | $ | 9,003,403 | $ | 8,656,117 | ||||||
Less accumulated depreciation and amortization | 4,755,118 | 4,470,509 | 4,337,288 | |||||||||
|
|
|
|
|
| |||||||
Net property at cost | $ | 4,858,284 | $ | 4,532,894 | $ | 4,318,829 | ||||||
|
|
|
|
|
| |||||||
| In thousands | April 30, 2022 | January 29, 2022 | May 1, 2021 | ||||||||
| Land and buildings | $ | 1,929,521 | $ | 1,911,569 | $ | 1,723,049 | |||||
| Leasehold costs and improvements | 3,615,202 | 3,652,280 | 3,611,943 | ||||||||
| Furniture, fixtures and equipment | 6,961,560 | 6,871,777 | 6,602,759 | ||||||||
| Total property at cost | $ | 12,506,283 | $ | 12,435,626 | $ | 11,937,751 | |||||
| Less: accumulated depreciation and amortization | 7,217,119 | 7,164,799 | 6,869,927 | ||||||||
| Net property at cost | $ | 5,289,164 | $ | 5,270,827 | $ | 5,067,824 | |||||
As previously disclosed, during fiscal 2017,May 1, 2021.
10
periods ended April 30, 2022 and May 1, 2021, respectively.
In thousands | Foreign Currency Translation | Deferred Benefit Costs | Cash Flow Hedge on Debt | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Balance, January 28, 2017 | $ | (491,803 | ) | $ | (199,481 | ) | $ | (2,942 | ) | $ | (694,226 | ) | ||||
Additions to other comprehensive income: | ||||||||||||||||
Foreign currency translation adjustments (net of taxes of $16,212) | 79,393 | — | — | 79,393 | ||||||||||||
Reclassifications from other comprehensive income to net income: | ||||||||||||||||
Amortization of prior service cost and deferred gains (net of taxes of $7,500) | — | 11,401 | — | 11,401 | ||||||||||||
Amortization of loss on cash flow hedge (net of taxes of $337) | — | — | 513 | 513 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance, October 28, 2017 | $ | (412,410 | ) | $ | (188,080 | ) | $ | (2,429 | ) | $ | (602,919 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
January 29, 2022 and the three months ended April 30, 2022:
| In thousands | Foreign Currency Translation | Deferred Benefit Costs | Cash Flow Hedge on Debt | Accumulated Other Comprehensive (Loss) Income | ||||||||||
| Balance, January 30, 2021 | $ | (441,532) | $ | (164,802) | $ | 263 | $ | (606,071) | ||||||
| Additions to other comprehensive loss: | ||||||||||||||
| Foreign currency translation adjustments (net of taxes of $207) | (46,715) | — | — | (46,715) | ||||||||||
| Recognition of net gains/losses on benefit obligations (net of taxes of $17,659) | — | (48,504) | — | (48,504) | ||||||||||
| Reclassifications from other comprehensive loss to net income: | ||||||||||||||
| Amortization of loss on cash flow hedge (net of taxes of $603) | — | — | (263) | (263) | ||||||||||
| Amortization of prior service cost and deferred gains/losses (net of taxes of $4,588) | — | 14,403 | — | 14,403 | ||||||||||
| Balance, January 29, 2022 | $ | (488,247) | $ | (198,903) | $ | — | $ | (687,150) | ||||||
| Additions to other comprehensive loss: | ||||||||||||||
| Foreign currency translation adjustments (net of taxes of $574) | (57,612) | (57,612) | ||||||||||||
| Reclassifications from other comprehensive loss to net income: | ||||||||||||||
| Amortization of prior service cost and deferred gains/losses (net of taxes of $1,375) | — | 3,778 | — | 3,778 | ||||||||||
| Balance, April 30, 2022 | $ | (545,859) | $ | (195,125) | $ | — | $ | (740,984) | ||||||
April 30, 2022. These expenditures were funded by cash generated from operations.
In February 2017, TJX announced that its Boardrepurchase as of Directors had approved an additional stock repurchase program that authorized the repurchase of up to $1.0 billion of TJX common stock from time to time, all of which remained available at October 28, 2017.
April 30, 2022.
11
| Thirteen Weeks Ended | ||||||||
In thousands, except per share data | October 28, 2017 | October 29, 2016 | ||||||
Basic earnings per share | ||||||||
Net income | $ | 641,436 | $ | 549,786 | ||||
Weighted average common shares outstanding for basic EPS | 634,022 | 653,559 | ||||||
Basic earnings per share | $ | 1.01 | $ | 0.84 | ||||
Diluted earnings per share | ||||||||
Net income | $ | 641,436 | $ | 549,786 | ||||
Shares for basic and diluted earnings per share calculations: | ||||||||
Weighted average common shares outstanding for basic EPS | 634,022 | 653,559 | ||||||
Assumed exercise/vesting of: | ||||||||
Stock options and awards | 8,859 | 8,162 | ||||||
|
|
|
| |||||
Weighted average common shares outstanding for diluted EPS | 642,881 | 661,721 | ||||||
|
|
|
| |||||
Diluted earnings per share | $ | 1.00 | $ | 0.83 | ||||
| Thirty-Nine Weeks Ended | ||||||||
In thousands, except per share data | October 28, 2017 | October 29, 2016 | ||||||
Basic earnings per share | ||||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
Weighted average common shares outstanding for basic EPS | 639,191 | 657,746 | ||||||
Basic earnings per share | $ | 2.71 | $ | 2.46 | ||||
Diluted earnings per share | ||||||||
Net income | $ | 1,730,672 | $ | 1,620,306 | ||||
Shares for basic and diluted earnings per share calculations: | ||||||||
Weighted average common shares outstanding for basic EPS | 639,191 | 657,746 | ||||||
Assumed exercise/vesting of: | ||||||||
Stock options and awards | 9,481 | 8,886 | ||||||
|
|
|
| |||||
Weighted average common shares outstanding for diluted EPS | 648,672 | 666,632 | ||||||
|
|
|
| |||||
Diluted earnings per share | $ | 2.67 | $ | 2.43 | ||||
share:
| Thirteen Weeks Ended | ||||||||||||||
| Amounts in thousands, expect per share amounts | April 30, 2022 | May 1, 2021 | ||||||||||||
| Basic earnings per share: | ||||||||||||||
| Net income | $ | 587,473 | $ | 533,930 | ||||||||||
| Weighted average common shares outstanding for basic earnings per share calculation | 1,177,141 | 1,205,439 | ||||||||||||
| Basic earnings per share | $ | 0.50 | $ | 0.44 | ||||||||||
| Diluted earnings per share: | ||||||||||||||
| Net income | $ | 587,473 | $ | 533,930 | ||||||||||
| Weighted average common shares outstanding for basic earnings per share calculation | 1,177,141 | 1,205,439 | ||||||||||||
| Assumed exercise / vesting of stock options and awards | 12,122 | 16,078 | ||||||||||||
| Weighted average common shares outstanding for diluted earnings per share calculation | 1,189,263 | 1,221,517 | ||||||||||||
| Diluted earnings per share | $ | 0.49 | $ | 0.44 | ||||||||||
| Cash dividends declared per share | $ | 0.295 | $ | 0.26 | ||||||||||
12
May 1, 2021.
13
In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at October 28, 2017 | |||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||
Intercompany balances, primarily debt and related interest |
| |||||||||||||||||||||||||||
| zł | 67,000 | £ | 13,000 | 0.1940 | (Accrued Exp) | $ | — | $ | (1,211 | ) | $ | (1,211 | ) | |||||||||||||||
| € | 49,950 | £ | 43,317 | 0.8672 | Prepaid Exp / (Accrued Exp) | 277 | (1,600 | ) | (1,323 | ) | ||||||||||||||||||
| U.S.$ | 68,445 | £ | 55,000 | 0.8036 | Prepaid Exp | 3,849 | — | 3,849 | ||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: |
| |||||||||||||||||||||||||||
Diesel contracts | | Fixed on 250k – 2.5M gal per month | | | Float on 250k – 2.5M gal per month | | N/A | Prepaid Exp | 5,226 | — | 5,226 | |||||||||||||||||
Intercompany billings in Europe, primarily merchandise related | € | 27,000 | £ | 24,062 | 0.8912 | Prepaid Exp | 202 | — | 202 | |||||||||||||||||||
Merchandise purchase commitments |
| |||||||||||||||||||||||||||
| C$ | 511,004 | U.S.$ | 399,650 | 0.7821 | Prepaid Exp / (Accrued Exp) | 5,023 | (4,770 | ) | 253 | |||||||||||||||||||
| C$ | 25,305 | € | 17,000 | 0.6718 | Prepaid Exp / (Accrued Exp) | 63 | (62 | ) | 1 | |||||||||||||||||||
| £ | 163,682 | U.S.$ | 214,000 | 1.3074 | Prepaid Exp / (Accrued Exp) | 678 | (2,298 | ) | (1,620 | ) | ||||||||||||||||||
| A$ | 27,187 | U.S.$ | 21,351 | 0.7853 | Prepaid Exp | 467 | — | 467 | ||||||||||||||||||||
| zł | 313,150 | £ | 65,249 | 0.2084 | Prepaid Exp / (Accrued Exp) | 580 | (350 | ) | 230 | |||||||||||||||||||
| U.S.$ | 2,928 | £ | 2,245 | 0.7667 | Prepaid Exp | 16 | — | 16 | ||||||||||||||||||||
| U.S.$ | 68,723 | € | 58,859 | 0.8565 | Prepaid Exp / (Accrued Exp) | 729 | (989 | ) | (260 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Total fair value of derivative financial instruments |
| $ | 17,110 | $ | (11,280 | ) | $ | 5,830 | ||||||||||||||||||||
|
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|
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| |||||||||||||||||||||||
14
April 30, 2022:
| In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet Location | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at April 30, 2022 | ||||||||||||||||||||||
| Fair value hedges: | |||||||||||||||||||||||||||||
| Intercompany balances, primarily debt related: | |||||||||||||||||||||||||||||
| zł | 25,000 | £ | 4,541 | 0.1816 | Prepaid Exp | $ | 149 | $ | — | $ | 149 | ||||||||||||||||||
| € | 60,000 | £ | 50,568 | 0.8428 | (Accrued Exp) | — | (145) | (145) | |||||||||||||||||||||
| A$ | 170,000 | U.S.$ | 122,061 | 0.7180 | Prepaid Exp | 1,868 | — | 1,868 | |||||||||||||||||||||
| U.S.$ | 74,646 | £ | 55,000 | 0.7368 | (Accrued Exp) | — | (5,584) | (5,584) | |||||||||||||||||||||
| £ | 150,000 | U.S.$ | 203,667 | 1.3578 | Prepaid Exp | 15,501 | — | 15,501 | |||||||||||||||||||||
| € | 200,000 | U.S.$ | 229,237 | 1.1462 | Prepaid Exp | 16,758 | — | 16,758 | |||||||||||||||||||||
| Economic hedges for which hedge accounting was not elected: | |||||||||||||||||||||||||||||
| Diesel fuel contracts | Fixed on 3.2M – 4.0M gal per month | Float on 3.2M – 4.0M gal per month | N/A | Prepaid Exp | 53,779 | — | 53,779 | ||||||||||||||||||||||
| Intercompany billings in TJX International, primarily merchandise related: | |||||||||||||||||||||||||||||
| € | 260,000 | £ | 216,610 | 0.8331 | (Accrued Exp) | — | (2,348) | (2,348) | |||||||||||||||||||||
| Merchandise purchase commitments: | |||||||||||||||||||||||||||||
| C$ | 826,057 | U.S.$ | 655,000 | 0.7929 | Prepaid Exp | 14,162 | — | 14,162 | |||||||||||||||||||||
| C$ | 30,949 | € | 22,000 | 0.7108 | (Accrued Exp) | — | (802) | (802) | |||||||||||||||||||||
| £ | 436,036 | U.S.$ | 582,300 | 1.3354 | Prepaid Exp / (Accrued Exp) | 36,363 | (210) | 36,153 | |||||||||||||||||||||
| A$ | 69,520 | U.S.$ | 50,500 | 0.7264 | Prepaid Exp | 1,394 | — | 1,394 | |||||||||||||||||||||
| zł | 615,000 | £ | 110,481 | 0.1796 | Prepaid Exp | 2,458 | — | 2,458 | |||||||||||||||||||||
| U.S.$ | 152,073 | € | 135,500 | 0.8910 | (Accrued Exp) | — | (8,897) | (8,897) | |||||||||||||||||||||
| Total fair value of derivative financial instruments | $ | 142,432 | $ | (17,986) | $ | 124,446 | |||||||||||||||||||||||
In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at January 28, 2017 | |||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||
Intercompany balances, primarily debt and related interest |
| |||||||||||||||||||||||||||
| zł | 67,000 | £ | 13,000 | 0.1940 | (Accrued Exp) | $ | — | $ | (6 | ) | $ | (6 | ) | |||||||||||||||
| € | 63,000 | £ | 54,452 | 0.8643 | Prepaid Exp | 263 | — | 263 | ||||||||||||||||||||
| U.S.$ | 68,445 | £ | 55,000 | 0.8036 | Prepaid Exp | 1,196 | — | 1,196 | ||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: |
| |||||||||||||||||||||||||||
Diesel contracts | | Fixed on 2.1M – 2.5M gal per month | | | Float on 2.1M– 2.5M gal per month | | N/A | Prepaid Exp | 2,183 | — | 2,183 | |||||||||||||||||
Intercompany billings in Europe, primarily merchandise related |
| |||||||||||||||||||||||||||
| € | 68,000 | £ | 58,306 | 0.8574 | Prepaid Exp | 262 | — | 262 | ||||||||||||||||||||
Merchandise purchase commitments | ||||||||||||||||||||||||||||
| C$ | 462,025 | U.S.$ | 349,750 | 0.7570 | Prepaid Exp / (Accrued Exp) | 1,089 | (3,081 | ) | (1,992 | ) | ||||||||||||||||||
| C$ | 19,571 | € | 13,650 | 0.6975 | Prepaid Exp / (Accrued Exp) | 22 | (290 | ) | (268 | ) | ||||||||||||||||||
| £ | 180,963 | U.S.$ | 227,500 | 1.2572 | Prepaid Exp / (Accrued Exp) | 2,327 | (2,695 | ) | (368 | ) | ||||||||||||||||||
| zł | 249,079 | £ | 48,593 | 0.1951 | Prepaid Exp / (Accrued Exp) | 681 | (927 | ) | (246 | ) | ||||||||||||||||||
| U.S.$ | 22,226 | € | 20,686 | 0.9307 | Prepaid Exp / (Accrued Exp) | 178 | (257 | ) | (79 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Total fair value of financial instruments |
| $ | 8,201 | $ | (7,256 | ) | $ | 945 | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
15
29, 2022:
| In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet Location | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at January 29, 2022 | ||||||||||||||||||||||
| Fair value hedges: | |||||||||||||||||||||||||||||
| Intercompany balances, primarily debt related: | |||||||||||||||||||||||||||||
| zł | 25,000 | £ | 4,541 | 0.1816 | Prepaid Exp | $ | 72 | $ | — | $ | 72 | ||||||||||||||||||
| € | 60,000 | £ | 50,568 | 0.8428 | Prepaid Exp | 111 | — | 111 | |||||||||||||||||||||
| A$ | 170,000 | U.S.$ | 122,061 | 0.7180 | Prepaid Exp | 2,047 | — | 2,047 | |||||||||||||||||||||
| U.S.$ | 74,646 | £ | 55,000 | 0.7368 | (Accrued Exp) | — | (918) | (918) | |||||||||||||||||||||
| € | 200,000 | U.S.$ | 230,319 | 1.1516 | Prepaid Exp | 4,535 | — | 4,535 | |||||||||||||||||||||
| Economic hedges for which hedge accounting was not elected: | |||||||||||||||||||||||||||||
| Diesel fuel contracts | Fixed on 3.6M – 4.0M gal per month | Float on 3.6M– 4.0M gal per month | N/A | Prepaid Exp | 23,649 | — | 23,649 | ||||||||||||||||||||||
| Intercompany billings in TJX International, primarily merchandise related: | |||||||||||||||||||||||||||||
| € | 91,000 | £ | 75,894 | 0.8340 | (Accrued Exp) | — | (145) | (145) | |||||||||||||||||||||
| Merchandise purchase commitments: | |||||||||||||||||||||||||||||
| C$ | 987,756 | U.S.$ | 783,000 | 0.7927 | Prepaid Exp / (Accrued Exp) | 6,641 | (80) | 6,561 | |||||||||||||||||||||
| C$ | 38,138 | € | 26,500 | 0.6948 | (Accrued Exp) | — | (248) | (248) | |||||||||||||||||||||
| £ | 325,482 | U.S.$ | 442,100 | 1.3583 | Prepaid Exp / (Accrued Exp) | 6,023 | (632) | 5,391 | |||||||||||||||||||||
| zł | 453,000 | £ | 82,112 | 0.1813 | Prepaid Exp / (Accrued Exp) | 744 | (449) | 295 | |||||||||||||||||||||
| A$ | 65,551 | U.S.$ | 47,500 | 0.7246 | Prepaid Exp | 1,270 | — | 1,270 | |||||||||||||||||||||
| U.S.$ | 66,989 | € | 59,000 | 0.8807 | (Accrued Exp) | — | (820) | (820) | |||||||||||||||||||||
| Total fair value of derivative financial instruments | $ | 45,092 | $ | (3,292) | $ | 41,800 | |||||||||||||||||||||||
In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at October 29, 2016 | |||||||||||||||||||||
Fair value hedges: | ||||||||||||||||||||||||||||
Intercompany balances, primarily debt and related interest |
| |||||||||||||||||||||||||||
| zł | 57,073 | C$ | 19,606 | 0.3435 | Prepaid Exp | $ | 199 | $ | — | $ | 199 | |||||||||||||||||
| zł | 45,000 | £ | 7,403 | 0.1645 | (Accrued Exp) | — | (2,357 | ) | (2,357 | ) | ||||||||||||||||||
| € | 61,000 | £ | 47,211 | 0.7740 | (Accrued Exp) | — | (9,681 | ) | (9,681 | ) | ||||||||||||||||||
| U.S.$ | 77,957 | £ | 55,000 | 0.7055 | (Accrued Exp) | — | (10,999 | ) | (10,999 | ) | ||||||||||||||||||
| £ | 25,000 | C$ | 41,123 | 1.6449 | Prepaid Exp | 45 | — | 45 | ||||||||||||||||||||
Economic hedges for which hedge accounting was not elected: |
| |||||||||||||||||||||||||||
Diesel contracts | | Fixed on 2.1M – 2.3M gal per month | | | Float on 2.1M – 2.3M gal per month | | N/A | Prepaid Exp | 1,485 | — | 1,485 | |||||||||||||||||
Intercompany billings in Europe, primarily merchandise related | € | 88,000 | £ | 79,577 | 0.9043 | Prepaid Exp | 186 | — | 186 | |||||||||||||||||||
Merchandise purchase commitments |
| |||||||||||||||||||||||||||
| C$ | 461,631 | U.S.$ | 355,350 | 0.7698 | Prepaid Exp | 10,434 | — | 10,434 | ||||||||||||||||||||
| C$ | 21,643 | € | 14,900 | 0.6885 | Prepaid Exp | 217 | — | 217 | ||||||||||||||||||||
| £ | 191,518 | U.S.$ | 252,600 | 1.3189 | Prepaid Exp / (Accrued Exp) | 18,824 | (626 | ) | 18,198 | |||||||||||||||||||
| zł | 258,005 | £ | 50,292 | 0.1949 | Prepaid Exp / (Accrued Exp) | 1 | (3,875 | ) | (3,874 | ) | ||||||||||||||||||
| U.S.$ | 675 | £ | 468 | 0.6934 | (Accrued Exp) | — | (106 | ) | (106 | ) | ||||||||||||||||||
| U.S.$ | 49,288 | € | 43,819 | 0.8891 | Prepaid Exp / (Accrued Exp) | 19 | (1,122 | ) | (1,103 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Total fair value of derivative financial instruments |
| $ | 31,410 | $ | (28,766 | ) | $ | 2,644 | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
16
Presented below is theMay 1, 2021:
| In thousands | Pay | Receive | Blended Contract Rate | Balance Sheet Location | Current Asset U.S.$ | Current (Liability) U.S.$ | Net Fair Value in U.S.$ at May 1, 2021 | ||||||||||||||||||||||
| Fair value hedges: | |||||||||||||||||||||||||||||
| Intercompany balances, primarily debt related: | |||||||||||||||||||||||||||||
| zł | 45,000 | £ | 8,846 | 0.1966 | Prepaid Exp | $ | 353 | $ | — | $ | 353 | ||||||||||||||||||
| A$ | 80,000 | U.S.$ | 62,032 | 0.7754 | (Accrued Exp) | — | (98) | (98) | |||||||||||||||||||||
| U.S.$ | 75,102 | £ | 55,000 | 0.7323 | Prepaid Exp | 1,505 | — | 1,505 | |||||||||||||||||||||
| £ | 450,000 | U.S.$ | 620,918 | 1.3798 | Prepaid Exp / (Accrued Exp) | 40 | (5,582) | (5,542) | |||||||||||||||||||||
| € | 200,000 | U.S.$ | 244,699 | 1.2235 | Prepaid Exp | 2,301 | — | 2,301 | |||||||||||||||||||||
| Economic hedges for which hedge accounting was not elected: | |||||||||||||||||||||||||||||
| Diesel fuel contracts | Fixed on 3.1M – 3.8M gal per month | Float on 3.1M – 3.8M gal per month | N/A | Prepaid Exp | 17,816 | — | 17,816 | ||||||||||||||||||||||
| Intercompany billings in TJX International, primarily merchandise related: | |||||||||||||||||||||||||||||
| € | 163,000 | £ | 141,240 | 0.8665 | (Accrued Exp) | — | (166) | (166) | |||||||||||||||||||||
| Merchandise purchase commitments: | |||||||||||||||||||||||||||||
| C$ | 574,390 | U.S.$ | 457,000 | 0.7956 | (Accrued Exp) | — | (11,054) | (11,054) | |||||||||||||||||||||
| C$ | 29,455 | € | 19,500 | 0.6620 | (Accrued Exp) | — | (444) | (444) | |||||||||||||||||||||
| £ | 282,746 | U.S.$ | 391,800 | 1.3857 | Prepaid Exp / (Accrued Exp) | 1,939 | (3,751) | (1,812) | |||||||||||||||||||||
| A$ | 50,830 | U.S.$ | 39,125 | 0.7697 | Prepaid Exp / (Accrued Exp) | 42 | (356) | (314) | |||||||||||||||||||||
| U.S.$ | 53,680 | € | 44,400 | 0.8271 | Prepaid Exp / (Accrued Exp) | 185 | (267) | (82) | |||||||||||||||||||||
| Total fair value of derivative financial instruments | $ | 24,181 | $ | (21,718) | $ | 2,463 | |||||||||||||||||||||||
| Amount of Gain (Loss) Recognized in Income by Derivative | ||||||||||
| Thirteen Weeks Ended | ||||||||||
In thousands | Location of Gain (Loss) Recognized in Income by Derivative | October 28, 2017 | October 29, 2016 | |||||||
Fair value hedges: | ||||||||||
Intercompany balances, primarily debt and related interest | Selling, general and administrative expenses | $ | (1,454 | ) | $ | (10,549 | ) | |||
Economic hedges for which hedge accounting was not elected: | ||||||||||
Diesel fuel contracts | Cost of sales, including buying and occupancy costs | 4,947 | 4,241 | |||||||
Intercompany billings in Europe, primarily merchandise related | Cost of sales, including buying and occupancy costs | 328 | (5,911 | ) | ||||||
Merchandise purchase commitments | Cost of sales, including buying and occupancy costs | 13,336 | 23,105 | |||||||
|
|
|
| |||||||
Gain recognized in income | $ | 17,157 | $ | 10,886 | ||||||
|
|
|
| |||||||
| Amount of Gain (Loss) Recognized in Income by Derivative | ||||||||||
| Thirty-Nine Weeks Ended | ||||||||||
In thousands | Location of Gain (Loss) Recognized in Income by Derivative | October 28, 2017 | October 29, 2016 | |||||||
Fair value hedges: | ||||||||||
Intercompany balances, primarily debt and related interest | Selling, general and administrative expenses | $ | (3,820 | ) | $ | (23,835 | ) | |||
Economic hedges for which hedge accounting was not elected: | ||||||||||
Diesel fuel contracts | Cost of sales, including buying and occupancy costs | 3,630 | 3,012 | |||||||
Intercompany billings in Europe, primarily merchandise related | Cost of sales, including buying and occupancy costs | (3,116 | ) | (14,987 | ) | |||||
Merchandise purchase commitments | Cost of sales, including buying and occupancy costs | (20,829 | ) | 15,826 | ||||||
|
|
|
| |||||||
Loss recognized in income | $ | (24,135 | ) | $ | (19,984 | ) | ||||
|
|
|
| |||||||
17
Income is presented below:
| Amount of Gain (Loss) Recognized in Income by Derivative | |||||||||||||||||
Location of Gain (Loss) Recognized in Income by Derivative | Thirteen Weeks Ended | ||||||||||||||||
| In thousands | April 30, 2022 | May 1, 2021 | |||||||||||||||
| Fair value hedges: | |||||||||||||||||
| Intercompany balances, primarily debt related | Selling, general and administrative expenses | $ | 24,395 | $ | (2,864) | ||||||||||||
| Economic hedges for which hedge accounting was not elected: | |||||||||||||||||
| Diesel fuel contracts | Cost of sales, including buying and occupancy costs | 44,173 | 13,570 | ||||||||||||||
| Intercompany billings in TJX International, primarily merchandise related | Cost of sales, including buying and occupancy costs | (370) | 118 | ||||||||||||||
| Merchandise purchase commitments | Cost of sales, including buying and occupancy costs | 40,929 | (15,969) | ||||||||||||||
| Gain (loss) recognized in income | $ | 109,127 | $ | (5,145) | |||||||||||||
| Level 1: | Unadjusted quoted prices in active markets for identical assets or liabilities | |||||||
| Level 2: | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability |
| Level 3: | Unobservable inputs for the asset or liability |
In thousands | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
Level 1 | ||||||||||||
Assets: | ||||||||||||
Executive Savings Plan investments | $ | 231,618 | $ | 195,733 | $ | 185,042 | ||||||
Level 2 | ||||||||||||
Assets: | ||||||||||||
Short-term investments | $ | 511,618 | $ | 543,242 | $ | 450,804 | ||||||
Foreign currency exchange contracts | 11,884 | 6,018 | 29,925 | |||||||||
Diesel fuel contracts | 5,226 | 2,183 | 1,485 | |||||||||
Liabilities: | ||||||||||||
Foreign currency exchange contracts | $ | 11,280 | $ | 7,256 | $ | 28,766 | ||||||
| In thousands | April 30, 2022 | January 29, 2022 | May 1, 2021 | ||||||||
| Level 1 | |||||||||||
| Assets: | |||||||||||
| Executive Savings Plan investments | $ | 366,038 | $ | 387,666 | $ | 384,442 | |||||
| Level 2 | |||||||||||
| Assets: | |||||||||||
| Foreign currency exchange contracts | $ | 88,653 | $ | 21,443 | $ | 6,365 | |||||
| Diesel fuel contracts | 53,779 | 23,649 | 17,816 | ||||||||
| Liabilities: | |||||||||||
| Foreign currency exchange contracts | $ | 17,986 | $ | 3,292 | $ | 21,718 | |||||
Short-term investments, foreign
For additional information on long-term debt, see Note I—Long-Term Debt and Credit Lines.
18
| Thirteen Weeks Ended | ||||||||
In thousands | October 28, 2017 | October 29, 2016 | ||||||
Net sales: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 5,298,479 | $ | 5,252,815 | ||||
HomeGoods | 1,228,768 | 1,078,373 | ||||||
TJX Canada | 983,236 | 855,473 | ||||||
TJX International | 1,251,737 | 1,105,027 | ||||||
|
|
|
| |||||
| $ | 8,762,220 | $ | 8,291,688 | |||||
|
|
|
| |||||
Segment profit: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 666,092 | $ | 703,092 | ||||
HomeGoods | 163,835 | 149,739 | ||||||
TJX Canada | 206,472 | 142,491 | ||||||
TJX International | 87,066 | 87,821 | ||||||
|
|
|
| |||||
| 1,123,465 | 1,083,143 | |||||||
General corporate expense | 95,484 | 97,902 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 7,981 | 12,462 | ||||||
|
|
|
| |||||
Income before provision for income taxes | $ | 1,020,000 | $ | 889,833 | ||||
|
|
|
| |||||
19
| Thirty-Nine Weeks Ended | ||||||||
In thousands | October 28, 2017 | October 29, 2016 | ||||||
Net sales: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 15,550,253 | $ | 15,217,188 | ||||
HomeGoods | 3,506,435 | 3,075,472 | ||||||
TJX Canada | 2,554,033 | 2,297,831 | ||||||
TJX International | 3,293,223 | 3,125,606 | ||||||
|
|
|
| |||||
| $ | 24,903,944 | $ | 23,716,097 | |||||
|
|
|
| |||||
Segment profit: | ||||||||
In the United States: | ||||||||
Marmaxx | $ | 2,100,138 | $ | 2,154,238 | ||||
HomeGoods | 457,272 | 415,996 | ||||||
TJX Canada | 392,581 | 321,942 | ||||||
TJX International | 132,893 | 145,047 | ||||||
|
|
|
| |||||
| 3,082,884 | 3,037,223 | |||||||
General corporate expense | 311,177 | 290,975 | ||||||
Loss on early extinguishment of debt | — | 51,773 | ||||||
Pension settlement charge | — | 31,173 | ||||||
Interest expense, net | 27,499 | 33,918 | ||||||
|
|
|
| |||||
Income before provision for income taxes | $ | 2,744,208 | $ | 2,629,384 | ||||
|
|
|
| |||||
20
| Thirteen Weeks Ended | ||||||||||||||
| In thousands | April 30, 2022 | May 1, 2021 | ||||||||||||
| Net sales: | ||||||||||||||
| In the United States: | ||||||||||||||
| Marmaxx | $ | 6,872,270 | $ | 6,640,486 | ||||||||||
| HomeGoods | 2,035,785 | 2,141,756 | ||||||||||||
| TJX Canada | 1,081,528 | 765,536 | ||||||||||||
| TJX International | 1,416,891 | 538,883 | ||||||||||||
| Total net sales | $ | 11,406,474 | $ | 10,086,661 | ||||||||||
| Segment profit (loss): | ||||||||||||||
| In the United States: | ||||||||||||||
| Marmaxx | $ | 904,222 | $ | 824,855 | ||||||||||
| HomeGoods | 121,985 | 251,602 | ||||||||||||
| TJX Canada | 126,618 | 71,577 | ||||||||||||
| TJX International | 13,232 | (221,558) | ||||||||||||
| Total segment profit | 1,166,057 | 926,476 | ||||||||||||
| General corporate expense | 77,378 | 160,442 | ||||||||||||
| Impairment on equity investment | 217,619 | — | ||||||||||||
| Interest expense, net | 18,785 | 44,688 | ||||||||||||
| Income before income taxes | $ | 852,275 | $ | 721,346 | ||||||||||
| Funded Plan | Unfunded Plan | |||||||||||||||
| Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
In thousands | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Service cost | $ | 11,655 | $ | 11,360 | $ | 403 | $ | 293 | ||||||||
Interest cost | 13,866 | 14,023 | 820 | 793 | ||||||||||||
Expected return on plan assets | (17,309 | ) | (17,633 | ) | — | — | ||||||||||
Recognized actuarial losses | 5,428 | 7,943 | 641 | 783 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Expense related to current period | 13,640 | 15,693 | 1,864 | 1,869 | ||||||||||||
Pension settlement charge | — | 31,173 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expense | $ | 13,640 | $ | 46,866 | $ | 1,864 | $ | 1,869 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Funded Plan | Unfunded Plan | |||||||||||||||
| Thirty-Nine Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
In thousands | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Service cost | $ | 35,264 | $ | 33,778 | $ | 1,578 | $ | 1,376 | ||||||||
Interest cost | 41,384 | 42,747 | 2,506 | 2,543 | ||||||||||||
Expected return on plan assets | (52,073 | ) | (53,503 | ) | — | — | ||||||||||
Recognized actuarial losses | 16,582 | 22,362 | 2,305 | 2,512 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net periodic pension cost | 41,157 | 45,384 | 6,389 | 6,431 | ||||||||||||
Pension settlement charge | — | 31,173 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expense | $ | 41,157 | $ | 76,557 | $ | 6,389 | $ | 6,431 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Funded Plan | Unfunded Plan | |||||||||||||
| Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||||||||
| In thousands | April 30, 2022 | May 1, 2021 | April 30, 2022 | May 1, 2021 | ||||||||||
| Service cost | $ | 12,168 | $ | 12,219 | $ | 727 | $ | 755 | ||||||
| Interest cost | 14,426 | 12,812 | 931 | 780 | ||||||||||
| Expected return on plan assets | (22,228) | (23,992) | — | — | ||||||||||
| Amortization of net actuarial loss and prior service cost | 4,274 | 2,803 | 879 | 1,154 | ||||||||||
| Total expense | $ | 8,640 | $ | 3,842 | $ | 2,537 | $ | 2,689 | ||||||
2023.
During the third quarter of fiscal 2017, TJX offered eligible, former TJX Associates, who had not yet commenced receiving their pension benefit, an opportunity to receive a lump sum payout of their vested pension benefit. As a result, the Company’s pension plan paid $103.2 million from pension plan assets to those who accepted the offer, thereby reducing its pension benefit obligations. The transaction had no cash impact on TJX but did result in anon-cashpre-tax pension settlement charge of $31.2 million in last year’s third quarter, which is reported separately on the consolidated statements of income.
TJX also had maintained an unfunded postretirement medical plan, which was closed to new benefits in fiscal 2006. During the first quarter of fiscal 2017, TJX terminated the unfunded postretirement medical plan and made a discretionary lump sum payment to participants. The settlement of the liability and the recognition of the remaining negative plan amendment resulted in apre-tax benefit of $5.5 million in the first quarter of fiscal 2017.
21
In thousands | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
General corporate debt: | ||||||||||||
2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $245 at October 28, 2017, $278 at January 28, 2017 and $289 at October 29, 2016) | $ | 499,755 | $ | 499,722 | $ | 499,711 | ||||||
2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76% after reduction of unamortized debt discount of $269 at October 28, 2017, $325 at January 28, 2017 and $344 at October 29, 2016) | 749,732 | 749,675 | 749,656 | |||||||||
2.25% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $6,590 at October 28, 2017, $7,149 at January 28, 2017 and $7,336 at October 29, 2016) | 993,410 | 992,851 | 992,664 | |||||||||
Debt issuance cost | (13,042 | ) | (14,649 | ) | (15,118 | ) | ||||||
|
|
|
|
|
| |||||||
Long-term debt | $ | 2,229,855 | $ | 2,227,599 | $ | 2,226,913 | ||||||
|
|
|
|
|
| |||||||
| In thousands | April 30, 2022 | January 29, 2022 | May 1, 2021 | ||||||||
| 2.500% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $45 at April 30, 2022, $56 at January 29, 2022 and $89 at May 1, 2021) | $ | 499,955 | $ | 499,944 | $ | 499,911 | |||||
| 3.500% senior unsecured notes, redeemed on June 4, 2021 (effective interest rate of 3.58% after reduction of unamortized debt discount of $3,956 at May 1, 2021) | — | — | 1,246,044 | ||||||||
| 2.250% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $3,233 at April 30, 2022, $3,419 at January 29, 2022 and $3,979 at May 1, 2021) | 996,767 | 996,581 | 996,021 | ||||||||
| 3.750% senior unsecured notes, redeemed on June 4, 2021 (effective interest rate of 3.76% after reduction of unamortized debt discount of $437 at May 1, 2021) | — | — | 749,563 | ||||||||
| 1.150% senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18% after reduction of unamortized debt discount of $779 at April 30, 2022, $811 at January 29, 2022, and $907 at May 1, 2021) | 499,221 | 499,189 | 499,093 | ||||||||
| 3.875% senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89% after reduction of unamortized debt discount of $491 at April 30, 2022, $506 at January 29, 2022 and $553 at May 1, 2021) | 495,359 | 495,344 | 495,297 | ||||||||
| 1.600% senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61% after reduction of unamortized debt discount of $535 at April 30, 2022, $551 at January 29, 2022, and $595 at May 1, 2021) | 499,465 | 499,449 | 499,405 | ||||||||
| 4.500% senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52% after reduction of unamortized debt discount of $2,113 at April 30, 2022, $2,132 at January 29, 2022 and $2,189 at May 1, 2021) | 383,386 | 383,367 | 383,310 | ||||||||
| Total debt | 3,374,153 | 3,373,874 | 5,368,644 | ||||||||
| Debt issuance costs | (18,338) | (19,033) | (33,780) | ||||||||
| Long-term debt | $ | 3,355,815 | $ | 3,354,841 | $ | 5,334,864 | |||||
At October 28, 2017, TJX also had outstanding $500 million aggregate principal amount of 2.50%ten-year notes due May 2023 andits $750 million aggregate principal amount of 2.75% seven-year3.750% Notes maturing in 2027, which 3.500% Notes and 3.750% Notes were originally issued and sold on April 1, 2020. Interest on the Company's remaining outstanding notes dueis payable semi-annually.
At October 28, 2017, TJX had two $500 million revolving credit facilities, one whichfacility that matures in March 2020 and one which matures in March 2022. At October 28, 2017,May 2024 (the “2024 Revolving Credit Facility”). Under these credit facilities, the agreementsCompany has maintained a borrowing capacity of $1.5 billion. The terms of these revolving credit facilities require quarterly payments of 6.0 basis points per annum on the committed amounts for both agreements. Thisamount and payment of interest on borrowings at rates based on LIBOR or a base rate isplus a variable margin, in each case based on the credit ratings of TJX’sCompany’s long-term debt ratings. The 2024 Revolving Credit Facility requires usage fees based on total credit extensions under the facility. As of April 30, 2022, January 29, 2022 and would vary with specified changes inMay 1, 2021, there were no amounts outstanding under any of the credit ratings. These agreements had no compensating balance requirements and had various covenants.Company’s facilities. Each of these facilities require TJX to maintain a ratio of funded debt and four-times consolidated rentals to consolidated earnings before interest, taxes, depreciation and amortization and consolidated rentals (“EBITDAR”)(EBITDAR) of not more than 2.753.50 to 1.00 on a rolling four-quarter basis. TJX was in compliance with all covenants related to its credit facilities at October 28, 2017, January 28, 2017 and October 29, 2016. the end of all periods presented.
22
As of October 28, 2017, January 28, 2017 and October 29, 2016,May 1, 2021, TJX Canada had two2 uncommitted credit lines, a C$10 million facility for operating expenses and a C$10 million letter of credit facility. As of October 28, 2017,April 30, 2022, January 28, 201729, 2022 and October 29, 2016,May 1, 2021, and during the quarters and year then ended, there were no amounts outstanding on the Canadian credit line for operating expenses.lines. As of October 28, 2017,April 30, 2022, January 28, 2017,29, 2022 and October 29, 2016, ourMay 1, 2021, the Company’s European business at TJX International had an uncommitted credit line of £5 million. As of October 28, 2017,April 30, 2022, January 28, 2017,29, 2022 and October 29, 2016,May 1, 2021, and during the quarters and year then ended, there were no amounts outstanding on the European credit line.
matters.
May 1, 2021.
May 1, 2021.
earnings.
Commitments
TJX has contingent obligations on leases, for which it was a lessee or guarantor, which were assigned to third parties without TJX being released by the landlords. Over many years, TJX has assigned numerous leases that it had originally leased or guaranteed to a significant number of third parties. With the exception of leases of former businesses for which TJX has reserved, the Company has rarely had a claim with respect to assigned leases, and accordingly, the Company does not expect that such leases will have a material adverse impact on its financial condition, results of operations or cash flows. TJX does not generally have sufficient information about these leases to estimate our potential contingent obligations under them, which could be triggered in the event that one or more of the current tenants does not fulfill their obligations related to one or more of these leases.
TJX may also be contingently liable on up to nine leases of former TJX businesses, for which we believe the likelihood of future liability to TJX is remote, and has contingent obligations in connection with certain assigned or sublet properties that TJX is able to estimate. We estimate that the undiscounted obligations of (i) leases of former operations not included in our reserve for former operations and (ii) properties of our former operations if the subtenants do not fulfill their obligations, are approximately $46.8 million as of October 28, 2017. We believe that most or all of these contingent obligations will not revert to us and, to the extent they do, will be resolved for substantially less due to mitigating factors including our expectation to further sublet.
23
24
Consolidated Financial Statements for certain of its legal proceedings.
Operations
April 30, 2022
Overview
May 1, 2021
Results of Operations
Highlights
25
net sales:
| Thirteen Weeks Ended | ||||||||||||||||||||
| April 30, 2022 | May 1, 2021 | |||||||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | ||||||||||||||||
| Cost of sales, including buying and occupancy costs | 72.1 | 71.9 | ||||||||||||||||||
| Selling, general and administrative expenses | 18.4 | 20.5 | ||||||||||||||||||
| Impairment on equity investment | 1.9 | — | ||||||||||||||||||
| Interest expense, net | 0.2 | 0.4 | ||||||||||||||||||
Income before provision for income taxes* | 7.5 | % | 7.2 | % | ||||||||||||||||
Consolidated net(“U.S. comp store sales”) and are calculated against sales for the nine months ended October 28, 2017 totaled $24.9 billion, a 5%comparable periods in fiscal 2022.
the South region. Apparel outperformed home fashions for the first quarter ended April 30, 2022.
Consolidated same
In the U.S., same store sales in the Northeast and Florida, areas most affected by the hurricanes and we believe, warm weather, were below the consolidated average for the quarter and nine-month period. Sales in the Southeast (excluding Florida) and the Southwest were above the consolidated average. In Canada, same store sales growth was above the consolidated average for the third quarter and nine-month period ended October 28, 2017. Same store sales growth for our International segment was above the consolidated average for the third quarter and was in line with the consolidated average for the nine-month period ended October 28, 2017.
We define same storeor comp sales, to be sales of those stores that we have operatedbeen 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. TheWe calculated comp store sales of Sierra Trading Post (including stores), tjmaxx.comon a 52-week basis by comparing the current and tkmaxx.com (oure-commerce businesses)prior year weekly periods that are not includedmost closely aligned. Relocated stores and stores that have changed in same store sales. We classify a store as a new store until it meetssize are generally classified in the same way as the original store, and we believe that the impact of these stores on the consolidated comp percentage is immaterial.
26
The following table sets forth certain information about our consolidated operating resultswas not applicable for fiscal 2022. In order to provide a performance indicator for its stores, during fiscal 2022, we temporarily reported open-only comp store sales. Open-only comp store sales included stores initially classified as a percentagecomp stores at the beginning of netfiscal 2021. This measure reported the sales increase or decrease of these stores for the days the stores were open in fiscal 2022 against sales for the following periods:
| Percentage of Net Sales Thirteen Weeks Ended October 28, 2017 | Percentage of Net Sales Thirteen Weeks Ended October 29, 2016 | |||||||
Net sales | 100.0 | % | 100.0 | % | ||||
|
|
|
| |||||
Cost of sales, including buying and occupancy costs | 70.2 | 70.5 | ||||||
Selling, general and administrative expenses | 18.1 | 17.6 | ||||||
Loss on early extinguishment of debt | — | 0.6 | ||||||
Pension settlement charge | — | 0.4 | ||||||
Interest expense, net | 0.1 | 0.2 | ||||||
|
|
|
| |||||
Income before provision for income taxes* | 11.6 | % | 10.7 | % | ||||
|
|
|
| |||||
| Percentage of Net Sales Thirty-Nine Weeks Ended October 28, 2017 | Percentage of Net Sales Thirty-Nine Weeks Ended October 29, 2016 | |||||||
Net sales | 100.0 | % | 100.0 | % | ||||
|
|
|
| |||||
Cost of sales, including buying and occupancy costs | 70.9 | 70.7 | ||||||
Selling, general and administrative expenses | 18.0 | 17.7 | ||||||
Loss on early extinguishment of debt | — | 0.2 | ||||||
Pension settlement charge | — | 0.1 | ||||||
Interest expense, net | 0.1 | 0.1 | ||||||
|
|
|
| |||||
Income before provision for income taxes* | 11.0 | % | 11.1 | % | ||||
|
|
|
| |||||
same days in fiscal 2020, prior to the emergence of the global pandemic.
27
We refer to the impact of the above two items throughout our discussion as “foreign currency”.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’sdivision's local currency. currency, which are referred to as “transactional foreign exchange,” and also described below.
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.
Selling, general and administrative expenses: Selling, general and administrativeAdministrative Expenses
Loss on early extinguishmentFamilia, an off-price retailer of debt:On September 12, 2016apparel and home fashions domiciled in Luxembourg that operates stores in Russia. As a result, we issued $1.0 billionperformed an impairment analysis and concluded that there was an other-than-temporary impairment of 2.25% ten-year notes.this investment. We used a portionrecorded an impairment charge of $218 million representing the entire carrying value of the proceeds to redeem our $375 million 6.95% notes on October 12, 2016, prior to their scheduled maturity of April 15, 2019 and we recordedinvestment. This charge had apre-tax loss on the early extinguishment of debt of $51.8 million.
Pension settlement charge: During the fiscal 2017 third quarter, we offered eligible former TJX Associates, who had not yet commenced receiving their qualified pension plan benefit, an opportunity to receive a lump sum payout of their vested pension benefit. On October 21, 2016, TJX’s qualified pension plan paid $103.2 million from pension plan assets to those who accepted this offer. This transaction had no cash $0.19 negative impact on TJX, but did result in anon-cashpre-tax settlement charge of $31.2 million inearnings per share for the thirdfirst quarter of last year.
fiscal 2023.
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
Dollars in thousands | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Interest expense | $ | 17,349 | $ | 18,906 | $ | 51,881 | $ | 52,851 | ||||||||
Capitalized interest | (1,066 | ) | (1,948 | ) | (3,528 | ) | (6,351 | ) | ||||||||
Interest (income) | (8,302 | ) | (4,496 | ) | (20,854 | ) | (12,582 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Interest expense, net | $ | 7,981 | $ | 12,462 | $ | 27,499 | $ | 33,918 | ||||||||
|
|
|
|
|
|
|
| |||||||||
For
| Thirteen Weeks Ended | ||||||||||||||||||||
| In millions | April 30, 2022 | May 1, 2021 | ||||||||||||||||||
| Interest expense | $ | 22.9 | $ | 47.0 | ||||||||||||||||
| Capitalized interest | (1.6) | (1.1) | ||||||||||||||||||
| Interest (income) | (2.5) | (1.2) | ||||||||||||||||||
| Interest expense, net | $ | 18.8 | $ | 44.7 | ||||||||||||||||
outstanding debt during fiscal 2022.
28
matters.
Net income for the nine months ended October 28, 2017 was $1.7 billion, or $2.67 per diluted share, compared to $1.6 billion, or $2.43 per diluted share, in last year’s comparable period. Foreign currency had a $0.01 positive impact on earnings per share in the first nine months of fiscal 2018 compared to a $0.01 negative impact on earnings per share in the prior year. The loss on early extinguishment of debt and the pension settlement charge collectively reduced net income by approximately $50.0 million, or $0.08 per share, for both the third quarter and nine months ended October 29, 2016. The benefit in the tax provision due to the change in accounting for share-based compensation increased earnings per share by $0.02 per share for the fiscal 2018 third quarter and $0.06 per share in the first nine months of fiscal 2018.
Our stock repurchase programs, which reduce our weighted average diluted shares outstanding, benefited our earnings per share growth by approximately three percent in both the third quarter and first nine months of fiscal 2018.
2023.
SEGMENTS
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
Dollars in millions | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Net sales | $ | 5,298.5 | $ | 5,252.8 | $ | 15,550.3 | $ | 15,217.2 | ||||||||
Segment profit | $ | 666.1 | $ | 703.1 | $ | 2,100.1 | $ | 2,154.2 | ||||||||
Segment profit as a percentage of net sales | 12.6 | % | 13.4 | % | 13.5 | % | 14.2 | % | ||||||||
(Decrease) increase in same store sales | (1 | )% | 5 | % | 0 | % | 5 | % | ||||||||
Stores in operation at end of period | ||||||||||||||||
T.J. Maxx | 1,219 | 1,179 | ||||||||||||||
Marshalls | 1,057 | 1,027 | ||||||||||||||
Sierra Trading Post | 26 | 11 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 2,302 | 2,217 | ||||||||||||||
|
|
|
| |||||||||||||
Selling square footage at end of period (in thousands) | ||||||||||||||||
T.J. Maxx | 27,034 | 26,501 | ||||||||||||||
Marshalls | 24,827 | 24,614 | ||||||||||||||
Sierra Trading Post | 451 | 209 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 52,312 | 51,324 | ||||||||||||||
|
|
|
| |||||||||||||
29
| Thirteen Weeks Ended | ||||||||||||||||||||
| U.S. dollars in millions | April 30, 2022 | May 1, 2021 | ||||||||||||||||||
| Net sales | $ | 6,872 | $ | 6,640 | ||||||||||||||||
| Segment profit | $ | 904 | $ | 825 | ||||||||||||||||
| Segment margin | 13.2 | % | 12.4 | % | ||||||||||||||||
| Stores in operation at end of period: | ||||||||||||||||||||
| T.J. Maxx | 1,285 | 1,282 | ||||||||||||||||||
| Marshalls | 1,155 | 1,147 | ||||||||||||||||||
| Sierra | 60 | 52 | ||||||||||||||||||
| Total | 2,500 | 2,481 | ||||||||||||||||||
| Selling square footage at end of period (in thousands): | ||||||||||||||||||||
| T.J. Maxx | 27,894 | 27,872 | ||||||||||||||||||
| Marshalls | 26,252 | 26,187 | ||||||||||||||||||
| Sierra | 975 | 853 | ||||||||||||||||||
| Total | 55,121 | 54,912 | ||||||||||||||||||
| Thirteen Weeks Ended | ||||||||||||||||||||
| U.S. dollars in millions | April 30, 2022 | May 1, 2021 | ||||||||||||||||||
| Net sales | $ | 2,036 | $ | 2,142 | ||||||||||||||||
| Segment profit | $ | 122 | $ | 252 | ||||||||||||||||
| Segment margin | 6.0 | % | 11.7 | % | ||||||||||||||||
| Stores in operation at end of period: | ||||||||||||||||||||
| HomeGoods | 859 | 843 | ||||||||||||||||||
| Homesense | 39 | 39 | ||||||||||||||||||
| Total | 898 | 882 | ||||||||||||||||||
| Selling square footage at end of period (in thousands): | ||||||||||||||||||||
| HomeGoods | 15,701 | 15,425 | ||||||||||||||||||
| Homesense | 837 | 837 | ||||||||||||||||||
| Total | 16,538 | 16,262 | ||||||||||||||||||
of fiscal 2022.
first quarter of fiscal 2023, representing less than 1.0% of HomeGoods
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
Dollars in millions | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Net sales | $ | 1,228.8 | $ | 1,078.4 | $ | 3,506.4 | $ | 3,075.5 | ||||||||
Segment profit | $ | 163.8 | $ | 149.7 | $ | 457.3 | $ | 416.0 | ||||||||
Segment profit as a percentage of net sales | 13.3 | % | 13.9 | % | 13.0 | % | 13.5 | % | ||||||||
Increase in same store sales | 3 | % | 6 | % | 4 | % | 7 | % | ||||||||
Stores in operation at end of period | ||||||||||||||||
HomeGoods | 660 | 568 | ||||||||||||||
Homesense | 3 | — | ||||||||||||||
|
|
|
| |||||||||||||
Total | 663 | 568 | ||||||||||||||
|
|
|
| |||||||||||||
Selling square footage at end of period (in thousands) | ||||||||||||||||
HomeGoods | 12,332 | 10,931 | ||||||||||||||
Homesense | 62 | — | ||||||||||||||
|
|
|
| |||||||||||||
Total | 12,394 | 10,931 | ||||||||||||||
|
|
|
| |||||||||||||
net sales for the first quarter of fiscal 2023.
| Thirteen Weeks Ended | ||||||||||||||||||||
| U.S. dollars in millions | April 30, 2022 | May 1, 2021 | ||||||||||||||||||
| Net sales | $ | 1,082 | $ | 766 | ||||||||||||||||
| Segment profit | $ | 127 | $ | 72 | ||||||||||||||||
| Segment margin | 11.7 | % | 9.3 | % | ||||||||||||||||
| Stores in operation at end of period: | ||||||||||||||||||||
| Winners | 293 | 284 | ||||||||||||||||||
| HomeSense | 148 | 143 | ||||||||||||||||||
| Marshalls | 106 | 103 | ||||||||||||||||||
| Total | 547 | 530 | ||||||||||||||||||
| Selling square footage at end of period (in thousands): | ||||||||||||||||||||
| Winners | 6,297 | 6,113 | ||||||||||||||||||
| HomeSense | 2,729 | 2,644 | ||||||||||||||||||
| Marshalls | 2,220 | 2,159 | ||||||||||||||||||
| Total | 11,246 | 10,916 | ||||||||||||||||||
average basket driven by a higher average ticket.
| Thirteen Weeks Ended | ||||||||||||||||||||
| U.S. dollars in millions | April 30, 2022 | May 1, 2021 | ||||||||||||||||||
| Net sales | $ | 1,417 | $ | 539 | ||||||||||||||||
| Segment profit (loss) | $ | 13 | $ | (222) | ||||||||||||||||
| Segment margin | 0.9 | % | (41.1) | % | ||||||||||||||||
| Stores in operation at end of period: | ||||||||||||||||||||
| T.K. Maxx | 623 | 604 | ||||||||||||||||||
| Homesense | 77 | 78 | ||||||||||||||||||
| T.K. Maxx Australia | 70 | 64 | ||||||||||||||||||
| Total | 770 | 746 | ||||||||||||||||||
| Selling square footage at end of period (in thousands): | ||||||||||||||||||||
| T.K. Maxx | 12,501 | 12,160 | ||||||||||||||||||
| Homesense | 1,126 | 1,142 | ||||||||||||||||||
| T.K. Maxx Australia | 1,231 | 1,143 | ||||||||||||||||||
| Total | 14,858 | 14,445 | ||||||||||||||||||
Three U.S. Homesense stores opened during the quarter, with one more scheduled to open before the end of fiscal 2018.
30
Foreign Segments:
TJX Canada
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
U.S. Dollars in millions | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Net sales | $ | 983.2 | $ | 855.5 | $ | 2,554.0 | $ | 2,297.8 | ||||||||
Segment profit | $ | 206.5 | $ | 142.5 | $ | 392.6 | $ | 321.9 | ||||||||
Segment profit as a percentage of net sales | 21.0 | % | 16.7 | % | 15.4 | % | 14.0 | % | ||||||||
Increase in same store sales | 4 | % | 8 | % | 4 | % | 10 | % | ||||||||
Stores in operation at end of period | ||||||||||||||||
Winners | 265 | 255 | ||||||||||||||
HomeSense | 117 | 106 | ||||||||||||||
Marshalls | 72 | 57 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 454 | 418 | ||||||||||||||
|
|
|
| |||||||||||||
Selling square footage at end of period (in thousands) | ||||||||||||||||
Winners | 5,795 | 5,629 | ||||||||||||||
HomeSense | 2,179 | 1,984 | ||||||||||||||
Marshalls | 1,599 | 1,307 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 9,573 | 8,920 | ||||||||||||||
|
|
|
| |||||||||||||
Net sales for TJX Canada increased 15% for the third quarter and 11% for the nine months ended October 28, 2017 as compared to the same periods last year. The quarterly increase reflects a 6% increase in new store sales and a 4% increase from same store sales, as well as currency translation, which positively impacted sales growth by 5%. The nine-month increase in net sales included new store sales growth of 6% and 4% from same store sales, as well as a positive 1%negative impact due to currency translation. The increase in same storeexchange rates.
increased e-commerce contribution.
31
TJX International
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
U.S. Dollars in millions | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Net sales | $ | 1,251.7 | $ | 1,105.0 | $ | 3,293.2 | $ | 3,125.6 | ||||||||
Segment profit | $ | 87.1 | $ | 87.8 | $ | 132.9 | $ | 145.0 | ||||||||
Segment profit as a percentage of net sales | 7.0 | % | 7.9 | % | 4.0 | % | 4.6 | % | ||||||||
Increase in same store sales | 1 | % | 0 | % | 1 | % | 2 | % | ||||||||
Stores in operation at end of period | ||||||||||||||||
T.K. Maxx | 540 | 503 | ||||||||||||||
Homesense | 55 | 44 | ||||||||||||||
T.K. Maxx Australia | 38 | 35 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 633 | 582 | ||||||||||||||
|
|
|
| |||||||||||||
Selling square footage at end of period (in thousands) | ||||||||||||||||
T.K. Maxx | 11,379 | 10,804 | ||||||||||||||
Homesense | 883 | 713 | ||||||||||||||
T.K. Maxx Australia | 714 | 667 | ||||||||||||||
|
|
|
| |||||||||||||
Total | 12,976 | 12,184 | ||||||||||||||
|
|
|
| |||||||||||||
Net sales for TJX International increased 13% for the thirdfirst quarter and 5% for the nine months ended October 28, 2017 asof fiscal 2023 compared to the temporary store closures in the same periods last year. The quarterly increase reflects an 8% increase from new store sales, a 1% increaseperiod in same store sales, as well as currency translation that positively impacted sales growth by 4%. The nine-month increase in net sales included an 8% increase from new store sales and a 1% increase in same store sales, which was offset by a negative 4% impact due to currency translation. The increase in same store sales for both periods was driven by an increase in customer traffic, whichfiscal 2022. This was partially offset by a declinegovernment programs received in the value of the average transaction.
Segment profit margin decreased to 7.0% for the thirdfirst quarter of fiscal 2018 compared to 7.9% for the same period last year. Segment profit2022 and lower merchandise margin decreased to 4.0% for the nine months ended October 28, 2017 compared to 4.6% for the nine months ended October 29, 2016. Segmentin fiscal 2023. Within merchandise margin, for the quarter and nine-month period was favorably impacted by 1.3 percentage points and 0.5 percentage points, respectively, due to foreign currency, primarily themark-to-market impact of the inventory derivatives. This improvement in segment margin, however,strong markon was more than offset by higher supply chain costs associated with the opening of a new distribution center, a decline in merchandise margin,markdowns and expense deleverage on the same store sales for the fiscal 2018 third quarter.
General corporate expense
| Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
Dollars in millions | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
General corporate expense | $ | 95.5 | $ | 97.9 | $ | 311.2 | $ | 291.0 | ||||||||
incremental freight costs.
| Thirteen Weeks Ended | |||||||||||||||||
| In millions | April 30, 2022 | May 1, 2021 | |||||||||||||||
| General corporate expense | $ | 77 | $ | 160 | |||||||||||||
General corporate expense for the quarter decreased slightly from the same period last year, driven by a reduction in incentive compensation costs.
32
Analysisand timing of Financial Condition
funding to TJX’s charitable foundations.
Net cash provided by operating activities was $1.9 billion for the nine months ended October 28, 2017, a decrease of $0.2 billion from the $2.1 billion provided in the nine months ended October 29, 2016. Net income adjusted fornon-cash items and the early extinguishment of debt for the fiscal 2018 nine-month period, as compared to the first nine months of fiscal 2017, increased cash flows by $60 million. The change in merchandise inventory, net of the related change in accounts payable, resulted in a use of cash of $309 million in the first nine months of fiscal 2018 compared to a use of cash of $234 million in the first nine months of fiscal 2017, which unfavorably impacted year over year cash flows by $75 million. This unfavorable impact on cash flows for the first nine months of fiscal 2018 is attributable in part to additional cash outflows to bring in fresh merchandise for the upcoming holiday season as reflected in the increased inventoryin-transit. The change in accrued expenses and other current liabilities, including income taxes payable, had an unfavorable impact on year over year operating cash flows of $218 million, which was driven by increased payments for incentive compensation, and the timing of payments related to sales taxes and income taxes during the first nine months of fiscal 2018 as compared to the prior year. In addition, the year over year comparison of operating cash flows is favorably impacted by $60 million due to the change in accounting for excess tax benefits related to stock compensation. This year these benefits are included in net income, increasing operating cash flows, whereas last year these benefits were classified as a financing activity.
Investing activities in the first nine months of fiscal 2018 reflect property additions for new stores, store improvements and renovations and investment in our home offices and our distribution network (including buying and merchandising systems and information systems). Cash outflows for property additions amounted to $828 million in the quarter ended October 28, 2017 compared to $767 million in the comparable period last year. We anticipate that capital spending for fiscal 2018 will be approximately $1.1 billion. We also purchased $630 million of investments in the first nine months of fiscal 2018 versus $534 million in the comparable prior year period and $658 million of investments were sold or matured in the first nine months of fiscal 2018 versus $432 million in the prior year. This activity primarily related to short-term investments, which had initial maturities in excess of 90 days and, per our policy, are not classified as cash on the consolidated balance sheets presented.
Cash flows from financing activities resulted in a net cash outflow of $1.7 billion in the third quarter of fiscal 2018 compared to a net cash outflow of $.9 billion in the same period last year. During the fiscal 2017 third quarter we received net proceeds of $992.5 million from the issuance of $1 billion of 2.25%ten-year notes. A portion of the proceeds were used to redeem our $375 million 6.95% notes prior to their scheduled maturity. The redemption of the notes, including the prepayment penalty, resulted in cash outflows of $426 million. Financing activities include the cash flows relating to our repurchases of our common stock, the exercise of options under our stock incentive plan and the payment of dividends to holders of our common stock. We spent $1.2 billion to repurchase 16.9 million shares of our stock in the first nine months of fiscal 2018 compared to $1.2 billion to repurchase 15.4 million shares in the same period last year. See Note D of Notes to Consolidated Financial Statements for more information. In February 2017, we announced an additional repurchase program authorizing the repurchase of up to an additional $1.0 billion of TJX stock from time to time. We currently plan to repurchase approximately $1.5 billion to $1.8 billion of stock under our stock repurchase programs in fiscal 2018. We determine the timing and amount of repurchases based on our assessment of various factors including excess cash flow,
Wehave traditionally havebeen funded our working capital requirements, including for seasonal merchandise, primarily through cash generated from operations, supplemented, as needed, by short-term bank borrowings and the issuance of commercial paper. As of October 28, 2017, approximately 60% of our cash was held by our foreign subsidiaries with $249 million held in countries where we have the intention to reinvest any undistributed earnings indefinitely. We have provided for deferred U.S. taxes on all undistributed earnings of our subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong, and Australia. If we repatriate cash from these subsidiaries, we should not incur additional
33
tax expense, but our cash would be reduced by the amount of taxes paid. For all other foreign subsidiaries,April 30, 2022, there were no income taxes have been provided on the undistributed earnings because such earnings are considered to be indefinitely reinvested in the business. We have no current plans to repatriate cash balances held by such foreign subsidiaries.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 April 30, 2022, as described in Note II—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements, are more than adequate to meet our operating needs overfor the nextforeseeable future.
Recently Issued Accounting Pronouncements
2022 we had used, and in the future we may 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.
Forward-looking Statements
Risk
Procedures
34
Not applicable
Factors
Information on Share Repurchases
Proceeds
| Total Number of Shares Repurchased(1) | Average Price Paid Per Share(2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(3) | |||||||||||||
July 30, 2017 through August 26, 2017 | 1,271,053 | $ | 70.82 | 1,271,053 | $ | 1,800,767,834 | ||||||||||
August 27, 2017 through September 30, 2017 | 1,990,306 | $ | 72.85 | 1,990,306 | $ | 1,655,779,813 | ||||||||||
October 1, 2017 through October 28, 2017 | 1,598,429 | $ | 71.95 | 1,598,429 | $ | 1,540,779,792 | ||||||||||
|
|
|
| |||||||||||||
Total: | 4,859,788 | 4,859,788 | ||||||||||||||
35
Total Number of Shares Repurchased(a) | Average Price Paid Per Share(b) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(c) | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(c) | |||||||||||
| January 30, 2022 through February 26, 2022 | 1,354,555 | $ | 68.18 | 1,354,555 | $ | 3,701,439,223 | ||||||||
| February 27, 2022 through April 2, 2022 | 5,387,551 | $ | 61.74 | 5,387,551 | $ | 3,368,793,365 | ||||||||
| April 3, 2022 through April 30, 2022 | 2,792,993 | $ | 62.66 | 2,792,993 | $ | 3,193,793,453 | ||||||||
| Total | 9,535,099 | 9,535,099 | ||||||||||||
| Incorporate by Reference | ||||||||||||||||||||||||
| Exhibit No. | Description | Form | Exhibit No. | Filing Date | ||||||||||||||||||||
| 10.1 | ||||||||||||||||||||||||
| 10.2 | ||||||||||||||||||||||||
| 10.3 | ||||||||||||||||||||||||
| 31.1 | ||||||||||||||||||||||||
| 31.2 | ||||||||||||||||||||||||
| 32.1 | ||||||||||||||||||||||||
| 32.2 | ||||||||||||||||||||||||
| 101 | The following materials from The TJX Companies, Inc.’s Quarterly Report on Form10-Q for the quarter ended | |||||||||||||||||||||||
| 104 | The cover page from The TJX Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2022, formatted in Inline XBRL (included in Exhibit 101) | |||||||||||||||||||||||
36
|
Date: November 28, 2017
| THE TJX COMPANIES, INC. | ||||||||||||||
| (Registrant) | ||||||||||||||
| Date: May 27, 2022 | ||||||||||||||
| /s/ Scott Goldenberg | ||||||||||||||
| Scott Goldenberg, Chief Financial Officer | ||||||||||||||
| (Principal Financial and Accounting Officer) | ||||||||||||||
37
Exhibit Index
38