TJX COMPANIES INC /DE/ - Quarter Report: 2023 July (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(mark one)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended July 29, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 1-4908

The TJX Companies, Inc.

(Exact name of registrant as specified in its charter)


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)

(508) 390-1000

(Registrant’s telephone number, including area code)

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


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

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

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

The number of shares of registrant’s common stock outstanding as of August 18, 2023: 1,144,080,554

The TJX Companies, Inc.

TABLE OF CONTENTS


PART I
ITEM 1. Consolidated Financial Statements			3
Consolidated Statements of Income			3
Consolidated Statements of Comprehensive Income			4
Consolidated Balance Sheets			5
Consolidated Statements of Cash Flows			6
Consolidated Statements of Shareholders' Equity			7
Notes To Consolidated Financial Statements			9
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			21
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk			32
ITEM 4. Controls and Procedures			32

PART II
ITEM 1. Legal Proceedings			33
ITEM 1A. Risk Factors			33
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			33
ITEM 5. Other Information			33
ITEM 6. Exhibits			33

SIGNATURE			34

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

IN MILLIONS EXCEPT PER SHARE AMOUNTS


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net sales	$	12,758	$	11,843	$	24,541	$	23,249
Cost of sales, including buying and occupancy costs	8,910		8,571		17,284		16,794





Selling, general and administrative expenses	2,559		2,175		4,797		4,269
Impairment on equity investment	—		—		—		218



Interest (income) expense, net	(38)		11		(75)		30
Income before income taxes	1,327		1,086		2,535		1,938
Provision for income taxes	338		276		655		541
Net income	$	989	$	810	$	1,880	$	1,397
Basic earnings per share	$	0.86	$	0.69	$	1.63	$	1.19
Weighted average common shares – basic	1,148		1,168		1,151		1,173
Diluted earnings per share	$	0.85	$	0.69	$	1.62	$	1.18
Weighted average common shares – diluted	1,161		1,178		1,163		1,184

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

IN MILLIONS


	Thirteen Weeks Ended
	July 29, 2023		July 30, 2022
Net income	$	989	$	810
Additions to other comprehensive income (loss):
Foreign currency translation adjustments, net of related tax provisions of $1 in fiscal 2024 and $0.4 in fiscal 2023	40		(30)
Reclassifications from other comprehensive income (loss) to net income:

Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $0.1 in fiscal 2024 and $2 in fiscal 2023	1		4

Other comprehensive income (loss), net of tax	41		(26)
Total comprehensive income	$	1,030	$	784


	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Net income	$	1,880	$	1,397
Additions to other comprehensive income (loss):
Foreign currency translation adjustments, net of related tax provision of $0.4 in fiscal 2024 and tax benefit of $0.2 in fiscal 2023	54		(89)


Reclassifications from other comprehensive income (loss) to net income:

Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $0.2 in fiscal 2024 and $3 in fiscal 2023	1		8

Other comprehensive income (loss), net of tax	55		(81)
Total comprehensive income	$	1,935	$	1,316

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

IN MILLIONS, EXCEPT SHARE DATA


	July 29, 2023		January 28, 2023		July 30, 2022
Assets
Current assets:
Cash and cash equivalents	$	4,550	$	5,477	$	3,531

Accounts receivable, net	548		563		556
Merchandise inventories	6,585		5,819		7,083
Prepaid expenses and other current assets	507		478		553
Federal, state and foreign income taxes recoverable	148		119		112
Total current assets	12,338		12,456		11,835
Net property at cost	6,166		5,783		5,390
Non-current deferred income taxes, net	149		158		172
Operating lease right of use assets	9,406		9,086		8,987
Goodwill	95		97		97
Other assets	768		769		610
Total assets	$	28,922	$	28,349	$	27,091
Liabilities
Current liabilities:
Accounts payable	$	4,438	$	3,794	$	4,085
Accrued expenses and other current liabilities	4,244		4,346		3,928
Current portion of operating lease liabilities	1,618		1,610		1,572
Current portion of long-term debt	—		500		500
Federal, state and foreign income taxes payable	17		55		62
Total current liabilities	10,317		10,305		10,147
Other long-term liabilities	915		919		917
Non-current deferred income taxes, net	132		127		67
Long-term operating lease liabilities	8,089		7,775		7,706
Long-term debt	2,861		2,859		2,857
Commitments and contingencies (See Note K)
Shareholders’ equity
Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued	—		—		—
Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,144,948,031; 1,155,437,908 and 1,161,886,769 respectively	1,145		1,155		1,162
Additional paid-in capital	—		—		—
Accumulated other comprehensive (loss) income	(551)		(606)		(768)
Retained earnings	6,014		5,815		5,003
Total shareholders’ equity	6,608		6,364		5,397
Total liabilities and shareholders’ equity	$	28,922	$	28,349	$	27,091

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

IN MILLIONS


	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Cash flows from operating activities:
Net income	$	1,880	$	1,397
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	467		438

Impairment on equity investment	—		218
Loss on property disposals and impairment charges	21		5

Deferred income tax provision	16		26
Share-based compensation	70		58
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	19		(48)
(Increase) in merchandise inventories	(734)		(1,207)
(Increase) decrease in income taxes recoverable	(28)		2
(Increase) in prepaid expenses and other current assets	(34)		(50)
Increase (decrease) in accounts payable	619		(311)
(Decrease) in accrued expenses and other liabilities	(170)		(393)
(Decrease) in income taxes payable	(36)		(123)
Increase in net operating lease liabilities	0		6
Other, net	(4)		(12)
Net cash provided by operating activities	2,086		6
Cash flows from investing activities:
Property additions	(820)		(693)


Purchases of investments	(17)		(21)
Sales and maturities of investments	18		11

Net cash (used in) investing activities	(819)		(703)
Cash flows from financing activities:
Repayment of debt	(500)		—


Payments for repurchase of common stock	(1,041)		(1,307)
Cash dividends paid	(725)		(655)
Proceeds from issuance of common stock	81		50

Other	(29)		(33)
Net cash (used in) financing activities	(2,214)		(1,945)
Effect of exchange rate changes on cash	20		(54)
Net (decrease) in cash and cash equivalents	(927)		(2,696)
Cash and cash equivalents at beginning of year	5,477		6,227
Cash and cash equivalents at end of period	$	4,550	$	3,531

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

IN MILLIONS


	Thirteen Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, April 29, 2023	1,150	$	1,150	$	—	$	(592)	$	5,864	$	6,422
Net income	—	—		—		—		989		989

Other comprehensive income, net of tax	—	—		—		41		—		41
Cash dividends declared on common stock	—	—		—		—		(381)		(381)
Recognition of share-based compensation	—	—		36		—		—		36
Issuance of common stock under stock incentive plan and related tax effect	2	2		54		—		(1)		55
Common stock repurchased	(7)	(7)		(90)		—		(457)		(554)
Balance, July 29, 2023	1,145	$	1,145	$	—	$	(551)	$	6,014	$	6,608


	Thirteen Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, April 30, 2022	1,173	$	1,173	$	—	$	(742)	$	5,164	$	5,595
Net income	—	—		—		—		810		810

Other comprehensive (loss), net of tax	—	—		—		(26)		—		(26)
Cash dividends declared on common stock	—	—		—		—		(343)		(343)
Recognition of share-based compensation	—	—		31		—		—		31
Issuance of common stock under stock incentive plan and related tax effect	0	0		31		—		(1)		30
Common stock repurchased	(11)	(11)		(62)		—		(627)		(700)
Balance, July 30, 2022	1,162	$	1,162	$	—	$	(768)	$	5,003	$	5,397

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

IN MILLIONS


	Twenty-Six Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, January 28, 2023	1,155	$	1,155	$	—	$	(606)	$	5,815	$	6,364
Net income	—	—		—		—		1,880		1,880

Other comprehensive income, net of tax	—	—		—		55		—		55
Cash dividends declared on common stock	—	—		—		—		(764)		(764)
Recognition of share-based compensation	—	—		70		—		—		70
Issuance of common stock under stock incentive plan and related tax effect	3	3		51		—		(1)		53
Common stock repurchased and retired	(13)	(13)		(121)		—		(916)		(1,050)
Balance, July 29, 2023	1,145	$	1,145	$	—	$	(551)	$	6,014	$	6,608


	Twenty-Six Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, January 29, 2022	1,181	$	1,181	$	—	$	(687)	$	5,509	$	6,003
Net income								1,397		1,397

Other comprehensive (loss), net of tax	—	—		—		(81)				(81)
Cash dividends declared on common stock	—	—		—		—		(690)		(690)
Recognition of share-based compensation	—	—		58		—		—		58
Issuance of common stock under stock incentive plan and related tax effect	2	2		16		—		(1)		17
Common stock repurchased and retired	(21)	(21)		(74)		—		(1,212)		(1,307)
Balance, July 30, 2022	1,162	$	1,162	$	—	$	(768)	$	5,003	$	5,397

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements and Notes thereto have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These Consolidated Financial Statements and Notes thereto are unaudited and, in the opinion of management, reflect all normal recurring adjustments, accruals and deferrals among periods required to match costs properly with the related revenue or activity, considered necessary by The TJX Companies, Inc. (together with its subsidiaries, “TJX”) for a fair statement of its Consolidated Financial Statements for the periods reported, all in conformity with GAAP consistently applied. The Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements, including the related notes, contained in TJX’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 (“fiscal 2023”).

These interim results are not necessarily indicative of results for the full fiscal year. TJX’s business, in common with the businesses of retailers generally, is subject to seasonal influences, with higher levels of sales and income generally realized in the second half of the year.

The January 28, 2023 balance sheet data was derived from audited Consolidated Financial Statements and does not include all disclosures required by GAAP.

Fiscal Year

TJX’s fiscal year ends on the Saturday nearest to the last day of January of each year. The current fiscal year ends February 3, 2024 (“fiscal 2024”) and is a 53-week fiscal year. Fiscal 2023 was a 52-week fiscal year. Fiscal 2025 will be a 52-week fiscal year and will end February 1, 2025.

Use of Estimates

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. TJX considers its accounting policies relating to inventory valuation, reserves for uncertain tax positions and loss contingencies to be the most significant accounting policies that involve management estimates and judgments. Actual amounts could differ from these estimates, and such differences could be material.

Equity Investment

In fiscal 2020, the Company acquired a minority ownership stake in privately held Familia, an off-price retailer of apparel and home fashions domiciled in Luxembourg that operates stores throughout Russia. During the first quarter of fiscal 2023, the Company announced that it had committed to divesting its minority investment, resulting in an impairment charge of $218 million representing the entire carrying value of the Company’s investment. Additionally, the Company realized a $54 million tax benefit when the Company completed the divestiture of this investment during the third quarter of fiscal 2023. See Note F—Fair Value Measurements for additional information.

Deferred Gift Card Revenue

The following table presents deferred gift card revenue activity:


In millions	July 29, 2023		July 30, 2022
Balance, beginning of year	$	721	$	685
Deferred revenue	858		852
Effect of exchange rates changes on deferred revenue	1		(3)
Revenue recognized	(916)		(905)
Balance, end of period	$	664	$	629

TJX recognized $472 million in gift card revenue for the three months ended July 29, 2023 and $462 million for the three months ended July 30, 2022. Gift cards are combined in one homogeneous pool and are not separately identifiable. As such, the revenue recognized consists of gift cards that were part of the deferred revenue balance at the beginning of the period as well as gift cards that were issued during the period.

Leases

Supplemental cash flow information related to leases is as follows:


	Twenty-Six Weeks Ended
In millions	July 29, 2023		July 30, 2022
Operating cash flows paid for operating leases	$	999	$	972
Lease liabilities arising from obtaining right of use assets	$	1,148	$	1,151

Future Adoption of New Accounting Standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”). The Company has reviewed the new guidance and has determined that it will either not apply to TJX or is not expected to be material to its Consolidated Financial Statements upon adoption, and, therefore, the guidance is not disclosed.

Note B. Property at Cost

The following table presents the components of property at cost:


In millions	July 29, 2023		January 28, 2023		July 30, 2022
Land and buildings	$	2,086	$	2,043	$	1,960
Leasehold costs and improvements	4,147		3,874		3,667
Furniture, fixtures and equipment	7,797		7,400		7,080
Total property at cost	$	14,030	$	13,317	$	12,707
Less: accumulated depreciation and amortization	7,864		7,534		7,317
Net property at cost	$	6,166	$	5,783	$	5,390

Depreciation expense was $234 million for the three months ended July 29, 2023 and $216 million for the three months ended July 30, 2022. Depreciation expense was $464 million for the six months ended July 29, 2023 and $434 million for the six months ended July 30, 2022.

Non-cash investing activities in the cash flows consist of accrued capital additions of $192 million and $145 million as of the periods ended July 29, 2023 and July 30, 2022, respectively.

Note C. Accumulated Other Comprehensive (Loss) Income

Amounts included in Accumulated other comprehensive (loss) income are recorded net of taxes. The following table details the changes in Accumulated other comprehensive loss for the twelve months ended January 28, 2023 and the six months ended July 29, 2023:


In millions and net of immaterial taxes	Foreign Currency Translation		Deferred Benefit Costs		Accumulated Other Comprehensive (Loss) Income
Balance, January 29, 2022	$	(488)	$	(199)	$	(687)
Additions to other comprehensive loss:
Foreign currency translation adjustments, net of taxes	(56)		—		(56)

Recognition of net gains/losses on benefit obligations, net of taxes	—		121		121

Reclassifications from other comprehensive loss to net income:

Amortization of prior service cost and deferred gains/losses, net of taxes	—		16		16
Balance, January 28, 2023	$	(544)	$	(62)	$	(606)
Additions to other comprehensive loss:
Foreign currency translation adjustments, net of taxes	54		—		54
Reclassifications from other comprehensive loss to net income:


Amortization of prior service cost and deferred gains/losses, net of taxes	—		1		1
Balance, July 29, 2023	$	(490)	$	(61)	$	(551)

Note D. Capital Stock and Earnings Per Share

Capital Stock

TJX repurchased and retired 6.7 million shares of its common stock at a cost of approximately $555 million, including applicable excise tax, during the quarter ended July 29, 2023, on a “trade date” basis. During the six months ended July 29, 2023, TJX repurchased and retired 13.2 million shares of its common stock at a cost of approximately $1.1 billion, on a “trade date” basis. TJX reflects stock repurchases in its consolidated financial statements on a “settlement date” or cash basis. TJX had cash expenditures under repurchase programs of $1 billion for the six months ended July 29, 2023 and $1.3 billion for the six months ended July 30, 2022. These expenditures were funded by cash on hand and cash generated from current and prior period operations.

In February 2023, the Company announced that its Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $2 billion of TJX common stock from time to time. Under this program and previously announced programs, TJX had approximately $2.5 billion available for repurchase as of July 29, 2023.

All shares repurchased under the stock repurchase programs have been retired.

Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
Amounts in millions, except per share amounts	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Basic earnings per share:
Net income	$	989	$	810	$	1,880	$	1,397
Weighted average common shares outstanding for basic earnings per share calculation	1,148		1,168		1,151		1,173
Basic earnings per share	$	0.86	$	0.69	$	1.63	$	1.19
Diluted earnings per share:
Net income	$	989	$	810	$	1,880	$	1,397

Weighted average common shares outstanding for basic earnings per share calculation	1,148		1,168		1,151		1,173
Assumed exercise/vesting of stock options and awards	13		10		12		11
Weighted average common shares outstanding for diluted earnings per share calculation	1,161		1,178		1,163		1,184
Diluted earnings per share	$	0.85	$	0.69	$	1.62	$	1.18
Cash dividends declared per share	$	0.3325	$	0.295	$	0.665	$	0.59

The weighted average common shares for the diluted earnings per share calculation excludes the impact of outstanding stock options if the assumed proceeds per share of the option is in excess of the average price of TJX’s common stock for the related fiscal periods. Such options are excluded because they would have an antidilutive effect. There were no such options excluded for the thirteen weeks and twenty-six weeks ended July 29, 2023. There were 5.1 million such options excluded for the thirteen weeks and twenty-six weeks ended July 30, 2022.

Note E. Financial Instruments

As a result of its operating and financing activities, TJX is exposed to market risks from changes in interest and foreign currency exchange rates and fuel costs. These market risks may adversely affect TJX’s operating results and financial position. TJX seeks to minimize risk from changes in interest and foreign currency exchange rates and fuel costs through the use of derivative financial instruments when and to the extent deemed appropriate. TJX does not use derivative financial instruments for trading or other speculative purposes and does not use any leveraged derivative financial instruments. TJX recognizes all derivative instruments as either assets or liabilities in the Consolidated Balance Sheet and measures those instruments at fair value. The fair values of the derivatives are classified as assets or liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts. Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in the period of the change. For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of Accumulated other comprehensive (loss) income or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged.

Diesel Fuel Contracts

TJX hedges portions of its estimated notional diesel fuel requirements based on the diesel fuel expected to be consumed by independent freight carriers transporting TJX’s inventory. Independent freight carriers transporting TJX’s inventory charge TJX a mileage surcharge based on the price of diesel fuel. The hedge agreements are designed to mitigate the volatility of diesel fuel pricing, and the resulting per mile surcharges payable by TJX, by setting a fixed price per gallon for the period being hedged. During fiscal 2023, TJX entered into agreements to hedge a portion of its estimated notional diesel fuel requirements for fiscal 2024, and during the first six months of fiscal 2024, TJX entered into agreements to hedge a portion of its estimated notional diesel fuel requirements for the first six months of fiscal 2025. The hedge agreements outstanding at July 29, 2023 relate to approximately 50% of TJX’s estimated notional diesel fuel requirements for the remainder of fiscal 2024 and the first six months of fiscal 2025. These diesel fuel hedge agreements will settle throughout fiscal 2024 and throughout the first seven months of fiscal 2025. TJX elected not to apply hedge accounting to these contracts.

Foreign Currency Contracts

TJX enters into forward foreign currency exchange contracts to obtain economic hedges on portions of merchandise purchases made and anticipated to be made by the Company’s operations in currencies other than their respective functional currencies. The contracts outstanding at July 29, 2023 cover merchandise purchases the Company is committed to over the next several months in fiscal 2024. Additionally, TJX’s operations in Europe are subject to foreign currency exposure as a result of their buying function being centralized in the U.K. Merchandise is purchased centrally in the U.K. and then shipped and billed to the retail entities in other countries. This intercompany billing to TJX’s European businesses’ Euro denominated operations creates exposure to the central buying entity for changes in the exchange rate between the Euro and British Pound. A portion of the inflows of Euros to the central buying entity provides a natural hedge for Euro denominated merchandise purchases from third-party vendors. TJX calculates any excess Euro exposure each month and enters into forward contracts of approximately 30 days' duration to mitigate this exposure.

TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt. The changes in fair value of these contracts are recorded in Selling, general and administrative expenses and are offset by marking the underlying item to fair value in the same period. Upon settlement, the realized gains and losses on these contracts are offset by the realized gains and losses of the underlying item in Selling, general and administrative expenses.

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at July 29, 2023:


In millions		Pay	Receive		Blended Contract Rate	Balance Sheet Location	Current Asset U.S.$		Current (Liability) U.S.$		Net Fair Value in U.S.$ at July 29, 2023
Fair value hedges:
Intercompany balances, primarily debt:

	€	60	£	52	0.8738	Prepaid Exp	$	0.6	$	—	$	0.6
	A$	162	U.S.$	112	0.6926	Prepaid Exp	3.5		—		3.5
	U.S.$	69	£	55	0.8010	Prepaid Exp	2.0		—		2.0
	£	200	U.S.$	244	1.2191	(Accrued Exp)	—		(13.4)		(13.4)
	€	200	U.S.$	219	1.0964	Prepaid Exp / (Accrued Exp)	0.3		(3.3)		(3.0)

Economic hedges for which hedge accounting was not elected:
	Diesel fuel contracts	Fixed on 3.0M – 3.8M gal per month	Float on 3.0M – 3.8M gal per month		N/A	(Accrued Exp)	—		(2.0)		(2.0)
Intercompany billings in TJX International, primarily merchandise:
	€	107	£	91	0.8526	(Accrued Exp)	—		(0.8)		(0.8)
Merchandise purchase commitments:
	C$	876	U.S.$	655	0.7473	Prepaid Exp / (Accrued Exp)	0.2		(9.0)		(8.8)
	C$	28	€	19	0.6799	Prepaid Exp / (Accrued Exp)	0.1		(0.3)		(0.2)
	£	376	U.S.$	468	1.2462	Prepaid Exp / (Accrued Exp)	0.5		(15.5)		(15.0)
	A$	96	U.S.$	65	0.6810	Prepaid Exp	1.3		—		1.3
	zł	605	£	114	0.1878	(Accrued Exp)	—		(4.4)		(4.4)

	U.S.$	110	€	101	0.9139	Prepaid Exp / (Accrued Exp)	1.3		(0.3)		1.0
Total fair value of derivative financial instruments							$	9.8	$	(49.0)	$	(39.2)

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at January 28, 2023:


In millions		Pay	Receive		Blended Contract Rate	Balance Sheet Location	Current Asset U.S.$		Current (Liability) U.S.$		Net Fair Value in U.S.$ at January 28, 2023
Fair value hedges:
Intercompany balances, primarily debt:

	€	60	£	53	0.8807	(Accrued Exp)	$	—	$	(0.3)	$	(0.3)
	A$	150	U.S.$	105	0.7003	(Accrued Exp)	—		(2.6)		(2.6)
	U.S.$	69	£	55	0.8010	(Accrued Exp)	—		(0.3)		(0.3)
	£	200	U.S.$	244	1.2191	(Accrued Exp)	—		(5.5)		(5.5)
	€	200	U.S.$	213	1.0652	Prepaid Exp / (Accrued Exp)	0.8		(7.0)		(6.2)
Economic hedges for which hedge accounting was not elected:
	Diesel fuel contracts	Fixed on 3.2M – 3.6M gal per month	Float on 3.2M– 3.6M gal per month		N/A	Prepaid Exp	3.9		—		3.9
Intercompany billings in TJX International, primarily merchandise:
	€	146	£	129	0.8834	Prepaid Exp	0.8		—		0.8
Merchandise purchase commitments:
	C$	705	U.S.$	525	0.7449	Prepaid Exp / (Accrued Exp)	2.2		(7.1)		(4.9)
	C$	23	€	16	0.7064	Prepaid Exp / (Accrued Exp)	0.4		(0.0)		0.4
	£	299	U.S.$	356	1.1916	Prepaid Exp / (Accrued Exp)	0.1		(15.4)		(15.3)
	zł	507	£	91	0.1788	(Accrued Exp)	—		(3.6)		(3.6)
	A$	104	U.S.$	71	0.6819	(Accrued Exp)	—		(3.3)		(3.3)
	U.S.$	85	€	82	0.9634	Prepaid Exp	4.3		—		4.3
Total fair value of derivative financial instruments							$	12.5	$	(45.1)	$	(32.6)

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at July 30, 2022:


In millions		Pay	Receive		Blended Contract Rate	Balance Sheet Location	Current Asset U.S.$		Current (Liability) U.S.$		Net Fair Value in U.S.$ at July 30, 2022
Fair value hedges:
Intercompany balances, primarily debt:

	€	60	£	51	0.8428	Prepaid Exp	$	0.3	$	—	$	0.3
	A$	170	U.S.$	120	0.7034	Prepaid Exp / (Accrued Exp)	0.8		(1.0)		(0.2)
	U.S.$	75	£	55	0.7368	(Accrued Exp)	—		(6.8)		(6.8)
	£	150	U.S.$	204	1.3578	Prepaid Exp	19.1		—		19.1
	€	200	U.S.$	223	1.1156	Prepaid Exp / (Accrued Exp)	14.7		(0.1)		14.6

Economic hedges for which hedge accounting was not elected:
	Diesel fuel contracts	Fixed on 2.6M – 3.9M gal per month	Float on 2.6M – 3.9M gal per month		N/A	Prepaid Exp	38.2		—		38.2
Intercompany billings in TJX International, primarily merchandise:
	€	206	£	174	0.8462	Prepaid Exp	2.1		—		2.1


Merchandise purchase commitments:
	C$	807	U.S.$	635	0.7867	Prepaid Exp / (Accrued Exp)	6.7		(1.0)		5.7
	C$	26	€	19	0.7314	(Accrued Exp)	—		(0.7)		(0.7)
	£	440	U.S.$	569	1.2941	Prepaid Exp / (Accrued Exp)	30.0		(2.2)		27.8
	A$	71	U.S.$	51	0.7141	Prepaid Exp / (Accrued Exp)	1.1		(0.4)		0.7
	zł	701	£	124	0.1770	Prepaid Exp / (Accrued Exp)	2.2		(0.0)		2.2

	U.S.$	114	€	105	0.9188	Prepaid Exp / (Accrued Exp)	0.1		(6.0)		(5.9)
Total fair value of derivative financial instruments							$	115.3	$	(18.2)	$	97.1

The impact of derivative financial instruments on the Consolidated Statements of Income is presented below:


		Amount of (Loss) Gain Recognized in Income by Derivative
	Location of (Loss) Gain Recognized in Income by Derivative	Thirteen Weeks Ended				Twenty-Six Weeks Ended
In millions		July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Fair value hedges:
Intercompany balances, primarily debt	Selling, general and administrative expenses	$	(3)	$	9	$	3	$	33
Economic hedges for which hedge accounting was not elected:

Diesel fuel contracts	Cost of sales, including buying and occupancy costs	10		10		(8)		54
Intercompany billings in TJX International, primarily merchandise	Cost of sales, including buying and occupancy costs	4		0		4		0

Merchandise purchase commitments	Cost of sales, including buying and occupancy costs	(30)		7		(22)		48
(Loss) gain recognized in income		$	(19)	$	26	$	(23)	$	135

Note F. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date or “exit price”. The inputs used to measure fair value are generally classified into the following hierarchy:


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

The following table sets forth TJX’s financial assets and liabilities that are accounted for at fair value on a recurring basis:


In millions	July 29, 2023		January 28, 2023		July 30, 2022
Level 1
Assets:
Executive Savings Plan investments	$	394.8	$	371.6	$	364.3
Level 2
Assets:

Foreign currency exchange contracts	$	9.8	$	8.6	$	77.1
Diesel fuel contracts	—		3.9		38.2
Liabilities:
Foreign currency exchange contracts	$	47.0	$	45.1	$	18.2
Diesel fuel contracts	2.0		—		—

Investments designed to meet obligations under the Executive Savings Plan are invested in registered investment companies traded in active markets and are recorded at unadjusted quoted prices.

Foreign currency exchange contracts and diesel fuel contracts are valued using broker quotations, which include observable market information. TJX does not make adjustments to quotes or prices obtained from brokers or pricing services but does assess the credit risk of counterparties and will adjust final valuations when appropriate. Where independent pricing services provide fair values, TJX obtains an understanding of the methods used in pricing. As such, these instruments are classified within Level 2.

The fair value of TJX’s general corporate debt was estimated by obtaining market quotes given the trading levels of other bonds of the same general issuer type and market perceived credit quality. These inputs are considered to be Level 2 inputs. The fair value of long-term debt as of July 29, 2023 was $2.6 billion compared to a carrying value of $2.9 billion primarily due to the recent increase in interest rates. The fair value of long-term debt as of January 28, 2023 was $2.6 billion compared to a carrying value of $2.9 billion. The fair value of the current portion of long-term debt as of January 28, 2023 was $497 million compared to a carrying value of $500 million. The fair value of long-term debt as of July 30, 2022 was $2.7 billion compared to a carrying value of $2.9 billion. The fair value of the current portion of long-term debt as of July 30, 2022 was $497 million compared to a carrying value of $500 million. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements that might affect TJX’s ability to settle these obligations. For additional information on long-term debt, see Note I—Long-Term Debt and Credit Lines.

TJX’s cash equivalents are stated at cost, which approximates fair value due to the short maturities of these instruments.

Certain assets and liabilities are measured at fair value on a nonrecurring basis, whereas the majority of assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of an impairment. For the periods ended July 29, 2023, January 28, 2023 and July 30, 2022, the Company did not record any material impairments to long-lived assets.

During the first quarter of fiscal 2023, the Company announced its intention to divest from its position in its minority investment in Familia and re-characterized this investment as held-for-sale valued as a Level 3 position. Given the lack of an active market or observable inputs, the Company derived an exit price which indicated that this investment had no market value. As a result, the Company recorded a $218 million charge in the first quarter of fiscal 2023, which represented the entirety of its investment. See Note A—Basis of Presentation and Summary of Significant Accounting Policies for additional information.

Note G. Segment Information

TJX operates four main business segments. In the United States, the Marmaxx segment operates T.J. Maxx, Marshalls, tjmaxx.com and marshalls.com and the HomeGoods segment operates HomeGoods, Homesense, and homegoods.com. The TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and the TJX International segment operates T.K. Maxx and Homesense, as well as tkmaxx.com, tkmaxx.de, and tkmaxx.at in Europe and T.K. Maxx in Australia. In addition to the Company’s four main business segments, Sierra operates retail stores and sierra.com in the U.S. The results of Sierra are included in the Marmaxx segment.

All of TJX’s stores, with the exception of HomeGoods and HomeSense/Homesense, sell family apparel and home fashions. HomeGoods and HomeSense/Homesense offer home fashions.

TJX evaluates the performance of its segments based on “segment profit or loss,” which it defines as pre-tax income or loss before general corporate expense, interest (income) expense, net and certain separately disclosed unusual or infrequent items. “Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used by other entities. This measure of performance should not be considered an alternative to net income or cash flows from operating activities as an indicator of TJX’s performance or as a measure of liquidity.

Presented below is financial information with respect to TJX’s business segments:


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
In millions	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net sales:
In the United States:
Marmaxx	$	7,903	$	7,236	$	15,269	$	14,107
HomeGoods	2,011		1,856		3,977		3,892
TJX Canada	1,223		1,248		2,261		2,330
TJX International	1,621		1,503		3,034		2,920
Total net sales	$	12,758	$	11,843	$	24,541	$	23,249
Segment profit:
In the United States:
Marmaxx	$	1,084	$	933	$	2,112	$	1,837
HomeGoods	175		50		319		172
TJX Canada	192		197		309		324
TJX International	32		105		70		118
Total segment profit	1,483		1,285		2,810		2,451
General corporate expense	194		188		350		265

Impairment on equity investment	—		—		—		218

Interest (income) expense, net	(38)		11		(75)		30
Income before income taxes	$	1,327	$	1,086	$	2,535	$	1,938

Note H. Pension Plans and Other Retirement Benefits

Presented below is financial information relating to TJX’s funded defined benefit pension plan (“qualified pension plan” or “funded plan”) and its unfunded supplemental pension plan (“unfunded plan”) for the periods shown:


	Funded Plan				Unfunded Plan
	Thirteen Weeks Ended				Thirteen Weeks Ended
In millions	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Service cost	$	9	$	11	$	0	$	0
Interest cost	18		14		2		1
Expected return on plan assets	(20)		(22)		—		—
Amortization of net actuarial loss and prior service cost	0		5		1		1


Total expense	$	7	$	8	$	3	$	2

	Funded Plan				Unfunded Plan
	Twenty-Six Weeks Ended				Twenty-Six Weeks Ended
In millions	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Service cost	$	17	$	23	$	1	$	1
Interest cost	36		29		3		2
Expected return on plan assets	(40)		(44)		—		—
Amortization of net actuarial loss and prior service cost	0		9		1		2


Total expense	$	13	$	17	$	5	$	5

TJX’s policy with respect to the funded plan is to fund, at a minimum, the amount required to maintain a funded status of 80% of the applicable pension liability (the Funding Target pursuant to the Internal Revenue Code section 430) or such other amount as is sufficient to avoid restrictions with respect to the funding of nonqualified plans under the Internal Revenue Code. The Company does not anticipate any required funding in fiscal 2024 for the funded plan. The Company anticipates making contributions of $4 million to provide current benefits coming due under the unfunded plan in fiscal 2024.

The amounts included in Amortization of net actuarial loss and prior service cost in the table above have been reclassified in their entirety from Accumulated other comprehensive (loss) income to the Consolidated Statements of Income, net of related tax effects, for the periods presented.

The Company has offered eligible former TJX Associates who have not yet commenced their qualified pension plan benefit an opportunity to receive a voluntary lump sum payout of their vested pension plan benefit. As a result, the Company anticipates an immaterial non-cash settlement charge. This potential non-cash settlement charge is expected to be incurred in the third quarter of fiscal 2024 and would impact the Company’s pretax profit margin and earnings per share results.

Note I. Long-Term Debt and Credit Lines

The table below presents long-term debt as of July 29, 2023, January 28, 2023 and July 30, 2022. All amounts are net of unamortized debt discounts.


In millions and net of immaterial unamortized debt discounts	July 29, 2023		January 28, 2023		July 30, 2022
General corporate debt:
2.500% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount)	$	—	$	500	$	500
2.250% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount)	998		997		997
1.150% senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18% after reduction of unamortized debt discount)	499		499		499
3.875% senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89% after reduction of unamortized debt discount)	496		496		495
1.600% senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61% after reduction of unamortized debt discount)	500		500		500
4.500% senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52% after reduction of unamortized debt discount)	383		383		383
Total debt	2,876		3,375		3,374
Current maturities of long-term debt, net of debt issuance costs	—		(500)		(500)
Debt issuance costs	(15)		(16)		(17)
Long-term debt	$	2,861	$	2,859	$	2,857

Senior Unsecured Notes

During the second quarter of fiscal 2024, the Company repaid its 2.500% ten-year Notes due May 2023 at maturity.

Credit Facilities

TJX has two revolving credit facilities, a $1 billion senior unsecured revolving credit facility maturing in June 2026 (the “2026 Revolving Credit Facility”) and a $500 million revolving credit facility that was set to mature in May 2024 (the “2024 Revolving Credit Facility”). On May 8, 2023, the Company amended the 2024 Revolving Credit Facility to (i) extend the maturity to May 8, 2028 and (ii) replace the London Interbank Offered Rate (“LIBOR”) with a term secured overnight financing rate plus a 0.10% credit spread adjustment (“Adjusted Term SOFR”). Term SOFR borrowings under the “2028 Revolving Credit Facility”, as amended, bear interest at the Adjusted Term SOFR plus a margin of 45.0 - 87.5 basis points and a quarterly facility fee payment of 5.0 - 12.5 basis points on the total commitments under the 2028 Revolving Credit Facility, in each case, based on the Company’s long-term debt ratings. All other material terms and conditions of the 2028 Revolving Credit Facility were unchanged.

Additionally, on May 8, 2023, the Company amended its 2026 Revolving Credit Facility to replace the LIBOR with Adjusted Term SOFR. Term SOFR borrowings under the 2026 Revolving Credit Facility, as amended, bear interest at the Adjusted Term SOFR plus a variable margin based on the Company’s long-term debt ratings. All other material terms and conditions of the 2026 Revolving Credit Facility were unchanged.

Under these credit facilities, the Company has maintained a borrowing capacity of $1.5 billion. As of July 29, 2023, January 28, 2023 and July 30, 2022, there were no amounts outstanding under these facilities. Each of these facilities require TJX to maintain a ratio of funded debt to earnings before interest, taxes, depreciation and amortization and rentals (EBITDAR) of not more than 3.50 to 1.00 on a rolling four-quarter basis. TJX was in compliance with all covenants related to its credit facilities at the end of all periods presented.

As of July 29, 2023, January 28, 2023 and July 30, 2022, TJX Canada had two credit lines, a C$10 million facility for operating expenses and a C$10 million letter of credit facility. As of July 29, 2023, January 28, 2023 and July 30, 2022, and during the quarters and year then ended, there were no amounts outstanding on the Canadian credit line for operating expenses. As of July 29, 2023, January 28, 2023 and July 30, 2022, the Company’s European business at TJX International had a credit line of £5 million. As of July 29, 2023, January 28, 2023 and July 30, 2022, and during the quarters and year then ended, there were no amounts outstanding on the European credit line.

Note J. Income Taxes

In August 2022, the Inflation Reduction Act of 2022 (“IRA”), was signed into law. Among other things, the IRA imposes a 15% corporate alternative minimum tax (the “Corporate AMT”) for tax years beginning after December 31, 2022 and levies a 1% excise tax on net stock repurchases after December 31, 2022. The excise tax on the net stock repurchase, Corporate AMT, or other provisions of the IRA did not have a material impact on our results of operations or financial position for the first six months of fiscal 2024.

The effective income tax rate was 25.5% for the second quarter of fiscal 2024 and 25.4% for the second quarter of fiscal 2023. The effective income tax rate was 25.8% for the first six months of fiscal 2024 and 27.9% for the first six months of fiscal 2023. The decrease in the effective income tax rate for the first six months of fiscal 2024 was primarily due to the first six months of fiscal 2023 reflecting the impairment of our minority investment in Familia with no estimated tax benefit and the increase in excess tax benefit from share-based compensation in fiscal 2024, partially offset by the resolution of various tax matters in fiscal 2024.

TJX had net unrecognized tax benefits of $264 million as of July 29, 2023, $265 million as of January 28, 2023 and $272 million as of July 30, 2022.

TJX is subject to U.S. federal income tax as well as income tax in multiple state, local and foreign jurisdictions. In the U.S. and India, fiscal years through 2010 are no longer subject to examination. In all other jurisdictions, fiscal years through 2011 are no longer subject to examination.

TJX’s accounting policy is to classify interest and penalties related to income tax matters as part of income tax expense. The accrued amounts for interest and penalties on the Consolidated Balance Sheets was $39 million as of July 29, 2023, $37 million as of January 28, 2023 and $39 million as of July 30, 2022.

Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or law, expirations of statutes of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions, it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those represented on the consolidated financial statements as of July 29, 2023. During the next 12 months, it is reasonably possible that tax audit resolutions may reduce unrecognized tax benefits by up to $51 million, which would reduce the provision for taxes on earnings.

Note K. Contingent Obligations, Contingencies, and Commitments

Contingent Contractual Obligations

TJX is a party to various agreements under which it may be obligated to indemnify the other party with respect to certain losses related to matters including title to assets sold, specified environmental matters or certain income taxes. These obligations are sometimes limited in time or amount. There are no amounts reflected in the Company’s Consolidated Balance Sheets with respect to these contingent obligations.

Legal Contingencies

TJX is subject to certain legal proceedings, lawsuits, disputes and claims that arise from time to time in the ordinary course of its business.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Thirteen Weeks (second quarter) and Twenty-Six Weeks (six months) Ended July 29, 2023

Compared to

The Thirteen Weeks (second quarter) and Twenty-Six Weeks (six months) Ended July 30, 2022

OVERVIEW

We are the leading off-price apparel and home fashions retailer in the U.S. and worldwide. Our mission is to deliver great value to our customers every day. We do this by selling a rapidly changing assortment of apparel, home fashions and other merchandise at prices generally 20% to 60% below full-price retailers’ (including department, specialty and major online retailers) regular prices on comparable merchandise, every day through our stores and seven e-commerce sites. We operate nearly 4,900 stores through our four main segments: in the U.S., Marmaxx (which operates T.J. Maxx, Marshalls, tjmaxx.com and marshalls.com) and HomeGoods (which operates HomeGoods, Homesense and homegoods.com); TJX Canada (which operates Winners, HomeSense and Marshalls in Canada); and TJX International (which operates T.K. Maxx, Homesense, tkmaxx.com, tkmaxx.de, and tkmaxx.at in Europe, and T.K. Maxx in Australia). In addition to our four main segments, Sierra operates retail stores and sierra.com in the U.S. The results of Sierra are included in the Marmaxx segment.

RESULTS OF OPERATIONS

As an overview of our financial performance, results for the quarter ended July 29, 2023 include the following:

–Net sales increased 8% to $12.8 billion for the second quarter of fiscal 2024 versus last year’s second quarter sales of $11.8 billion. As of July 29, 2023, both the number of stores in operation and the selling square footage increased 3% compared to the end of the second quarter of fiscal 2023.

–Consolidated comp store sales increased 6% for the second quarter of fiscal 2024. See Net Sales below for definition of comp store sales.

–Diluted earnings per share for the second quarter of fiscal 2024 were $0.85 versus $0.69 in the second quarter of fiscal 2023.

–Pre-tax profit margin (the ratio of pre-tax income to net sales) for the second quarter of fiscal 2024 was 10.4%, a 1.2 percentage point increase compared with 9.2% in the second quarter of fiscal 2023.

–Our cost of sales, including buying and occupancy costs, ratio for the second quarter of fiscal 2024 was 69.8%, a 2.6 percentage point decrease compared with 72.4% in the second quarter of fiscal 2023.

–Our selling, general and administrative (“SG&A”) expense ratio for the second quarter of fiscal 2024 was 20.1%, a 1.7 percentage point increase compared with 18.4% in the second quarter of fiscal 2023.

–Our consolidated average per store inventories, including inventory on hand at our distribution centers (which excludes inventory in transit) and excluding our e-commerce sites and Sierra stores, were down 6% on both a reported basis and constant currency basis at the end of the second quarter of fiscal 2024.

–During the second quarter of fiscal 2024, we returned $932 million to our shareholders through share repurchases and dividends.

Operating Results as a Percentage of Net Sales

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


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022			July 29, 2023		July 30, 2022
Net sales	100.0	%	100.0	%		100.0	%	100.0	%
Cost of sales, including buying and occupancy costs	69.8		72.4			70.4		72.2
Selling, general and administrative expenses	20.1		18.4			19.5		18.4
Impairment on equity investment	—		—			—		0.9

Interest (income) expense, net	(0.3)		0.1			(0.3)		0.1
Income before income taxes*	10.4	%	9.2	%		10.3	%	8.3	%

*Figures may not foot due to rounding.

Net Sales

Net sales for the quarter ended July 29, 2023 totaled $12.8 billion, an 8% increase versus second quarter fiscal 2023 net sales of $11.8 billion. The increase reflects a 6% increase in comp store sales and a 2% increase from non-comp store sales. Net sales from our e-commerce sites combined amounted to less than 2% of total sales for each of the second quarters of fiscal 2024 and fiscal 2023.

Net sales for the six months ended July 29, 2023 totaled $24.5 billion, a 6% increase versus net sales of $23.2 billion for the first six months fiscal 2023. The increase reflects a 4% increase in comp store sales and a 2% increase from non-comp store sales. Net sales from our e-commerce sites combined amounted to less than 2% of total sales for each of the first six months of fiscal 2024 and fiscal 2023.

We have returned to our historical definition of comparable store sales (as defined below). While stores in the U.S. were open for all of fiscal 2022, a significant number of stores in TJX Canada and TJX International experienced COVID-related temporary store closures and government-mandated shopping restrictions during fiscal 2022. Therefore, in fiscal 2023, we could not measure year-over-year comparable store sales with fiscal 2022 in these geographies in a meaningful way. As a result, the comparable stores included in the fiscal 2023 measure consisted of U.S. stores only, which we referred to as U.S. comparable store sales (“U.S. comp store sales”), and were calculated against sales for the comparable period in fiscal 2022.

Comp store sales increased 6% for the second quarter of fiscal 2024. U.S. comp store sales decreased 5% for the second quarter of fiscal 2023. Apparel comp store sales (as defined below) growth outperformed home fashions comp store sales (as defined below) growth for the second quarter of fiscal 2024.

Comp store sales increased 4% for the first six months of fiscal 2024. U.S. comp store sales decreased 2% for the first six months of fiscal 2023. Apparel comp store sales growth outperformed a decline in home fashions comp store sales for the first six months ended July 29, 2023.

Comp store sales for both periods were driven by an increase in customer traffic, partially offset by a decrease in average basket.

As of July 29, 2023, both our store count and selling square footage increased 3% compared to the end of the second quarter last year.

Definition of Comparable Store Sales

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

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

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

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

–Sales from our e-commerce sites

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

Comp store sales of our foreign segments are calculated by translating the current year’s comp store sales using the prior year’s exchange rates. This removes the effect of changes in currency exchange rates, which we believe is a more accurate measure of segment operating performance.

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

We define customer traffic to be the number of transactions in stores and average ticket to be the average retail price of the units sold. We define average transaction or average basket to be the average dollar value of transactions.

Impact of Foreign Currency Exchange Rates

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

Translation Foreign Exchange

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

Mark-to-Market Inventory Derivatives

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

Transactional Foreign Exchange

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

Cost of Sales, Including Buying and Occupancy Costs

Cost of sales, including buying and occupancy costs, as a percentage of net sales was 69.8% for the second quarter of fiscal 2024, a decrease of 2.6 percentage points over 72.4% for the second quarter of fiscal 2023. The decrease in the cost of sales ratio, including buying and occupancy costs, for the second quarter of fiscal 2024 was primarily attributable to higher merchandise margin and the favorable impact on the mark-to-market adjustments on fuel and inventory hedges. Merchandise margin reflects favorable freight costs, partially offset by higher shrink accrual rates in the current year.

Cost of sales, including buying and occupancy costs, as a percentage of net sales was 70.4% for the first six months of fiscal 2024, a decrease of 1.8 percentage points over 72.2% for the first six months of fiscal 2023. The decrease in the cost of sales ratio, including buying and occupancy costs, for the first six months of fiscal 2024 was primarily attributable to higher merchandise margin, which reflects favorable freight costs, partially offset by higher shrink accrual rates in the current year.

Selling, General and Administrative Expenses

SG&A expenses, as a percentage of net sales, was 20.1% for the second quarter of fiscal 2024, an increase of 1.7 percentage points over 18.4% for the second quarter of fiscal 2023.

SG&A expenses, as a percentage of net sales, was 19.5% for the first six months of fiscal 2024, an increase of 1.1 percentage points over 18.4% for the first six months of fiscal 2023.

The increase in the SG&A ratio for both the second quarter and first six months of fiscal 2024 was primarily attributable to higher incentive and share-based compensation costs, a reserve related to a German government COVID program receivable, incremental store wage and a contribution to our U.S. charitable foundation.

Impairment on Equity Investment

During fiscal 2023, we announced and completed the divestiture of our minority investment in Familia. As a result, we recorded an impairment charge of $218 million in the first quarter of fiscal 2023 representing the entire carrying value of the investment. Additionally, we realized a $54 million tax benefit when we completed the divestiture of this investment during the third quarter of fiscal 2023.

Interest (Income) Expense, net

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


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
In millions	July 29, 2023		July 30, 2022			July 29, 2023		July 30, 2022
Interest expense	$	20	$	23		$	43	$	46
Capitalized interest	(1)		(2)			(2)		(3)
Interest (income)	(57)		(10)			(116)		(13)
Interest (income) expense, net	$	(38)	$	11		$	(75)	$	30

Net interest (income) expense decreased for both the second quarter of fiscal 2024 and first six months ended July 29, 2023 compared to the same periods in fiscal 2023 due to an increase in interest income driven by an increase in prevailing rates and a higher average cash balance.

Provision for Income Taxes

Net Income and Diluted Earnings Per Share

Net income was $1 billion, or $0.85 per diluted share, and $810 million, or $0.69 per diluted share, for the second quarters of fiscal 2024 and fiscal 2023, respectively. Foreign currency had a $0.01 negative impact on earnings per share and a $0.03 negative impact on earnings per share for the second quarters of fiscal 2024 and fiscal 2023, respectively.

Net income was $1.9 billion, or $1.62 per diluted share, and $1.4 billion, or $1.18 per diluted share, for the first six months of fiscal 2024 and fiscal 2023, respectively. The $218 million impairment on our equity investment in Familia had a $0.18 negative impact on earnings per share for the first six months of fiscal 2023. Foreign currency had a $0.01 negative impact on earnings per share and a $0.02 negative impact on earnings per share for the first six months of fiscal 2024 and fiscal 2023, respectively.

We have offered eligible former TJX Associates who have not yet commenced their qualified pension plan benefit an opportunity to receive a voluntary lump sum payout of their vested pension plan benefit. As a result, we anticipate an immaterial non-cash settlement charge. This potential non-cash settlement charge is expected to be incurred in the third quarter of fiscal 2024 and would impact our pretax profit margin and earnings per share results.

Segment Information

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

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

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

U.S. SEGMENTS

Marmaxx


	Thirteen Weeks Ended						Twenty-Six Weeks Ended
U.S. dollars in millions	July 29, 2023			July 30, 2022				July 29, 2023			July 30, 2022
Net sales	$	7,903		$	7,236			$	15,269		$	14,107
Segment profit	$	1,084		$	933			$	2,112		$	1,837
Segment profit margin	13.7		%	12.9		%		13.8		%	13.0		%
Comp store sales	8		%	(2)		%		7		%	0		%
Stores in operation at end of period:
T.J. Maxx								1,305			1,290
Marshalls								1,190			1,157
Sierra								83			62
Total								2,578			2,509
Selling square footage at end of period (in millions):
T.J. Maxx								28			28
Marshalls								27			26
Sierra								1			1
Total								56			55

Net Sales

Net sales for Marmaxx were $7.9 billion for the second quarter of fiscal 2024, an increase of 9% compared to $7.2 billion for the second quarter of fiscal 2023. This increase in the second quarter reflects an 8% increase from comp store sales and a 1% increase from non-comp store sales. The increase in comp store sales was driven by an increase in customer traffic, partially offset by a decrease in average basket.

Net sales for Marmaxx were $15.3 billion for the first six months of fiscal 2024, an increase of 8% compared to $14.1 billion for the first six months of fiscal 2023. This increase in the first six months reflects a 7% increase from comp store sales and a 1% increase from non-comp store sales. The increase in comp store sales was driven by an increase in customer traffic.

For the second quarter of fiscal 2024, Marmaxx had strong apparel and home fashions comp store sales growth. For the first six months of fiscal 2024, strong apparel comp store sales growth outperformed home fashions comp store sales growth. For both periods, all geographies generally performed in line with the overall comp store sales increase.

Segment Profit Margin

Segment profit margin increased to 13.7% for the second quarter of fiscal 2024 compared to 12.9% for the same period last year. Segment profit margin increased to 13.8% for the first six months of fiscal 2024 compared to 13.0% for the same period last year. The increase in segment profit margin for both periods was driven by improved merchandise margin, partially offset by higher incentive compensation costs and incremental store wage. Merchandise margin was primarily driven by favorable freight costs and markon, partially offset by higher shrink accrual rates in the current year.

Our Marmaxx e-commerce sites, tjmaxx.com and marshalls.com, together with sierra.com, represented less than 3% of Marmaxx’s net sales for both the second quarter and the first six months of fiscal 2024 and fiscal 2023, and did not have a significant impact on year-over-year segment margin comparisons.

HomeGoods


	Thirteen Weeks Ended						Twenty-Six Weeks Ended
U.S. dollars in millions	July 29, 2023			July 30, 2022				July 29, 2023			July 30, 2022
Net sales	$	2,011		$	1,856			$	3,977		$	3,892
Segment profit	$	175		$	50			$	319		$	172
Segment profit margin	8.7		%	2.7		%		8.0		%	4.4		%
Comp store sales	4		%	(13)		%		(2)		%	(10)		%
Stores in operation at end of period:
HomeGoods								907			862
Homesense								49			40
Total								956			902
Selling square footage at end of period (in millions):
HomeGoods								17			16
Homesense								1			1
Total								18			17

Net Sales

Net sales for HomeGoods were $2 billion for the second quarter of fiscal 2024, an increase of 8%, compared to $1.9 billion for the second quarter of fiscal 2023. This increase in the second quarter reflects a 4% increase from comp store sales and a 4% increase from non-comp store sales. The increase in comp store sales for the second quarter was driven by an increase in customer traffic, partially offset by a decrease in average basket. All geographies performed in line with the overall comp store sales increase.

Net sales for HomeGoods were $4 billion for the first six months of fiscal 2024, an increase of 2%, compared to $3.9 billion for the first six months of fiscal 2023. This increase in the first six months reflects a 4% increase from non-comp store sales, partially offset by a 2% decrease from comp store sales. The decrease in comp store sales for the first six months was driven by a decrease in average basket, partially offset by an increase in customer traffic. All geographies performed in line with the overall comp store sales decline.

Segment Profit Margin

Segment profit margin increased to 8.7% for the second quarter of fiscal 2024 compared to 2.7% for the same period last year. The increase in segment profit margin for the second quarter of fiscal 2024 was driven by higher merchandise margin, partially offset by higher incentive compensations costs and incremental store wage. Merchandise margin was driven by favorable freight costs, partially offset by lower markon.

Segment profit margin increased to 8.0% for the first six months of fiscal 2024 compared to 4.4% for the same period last year. The increase in segment profit margin for the first six months of fiscal 2024 was driven by higher merchandise margin driven by favorable freight costs, partially offset by deleverage on lower comp store sales, primarily in occupancy and administrative costs and incremental store wage.

Our HomeGoods e-commerce website, homegoods.com, represented less than 1% of HomeGoods net sales for both the second quarter and the first six months of fiscal 2024, and did not have a significant impact on year-over-year segment margin comparisons.

FOREIGN SEGMENTS

TJX Canada


	Thirteen Weeks Ended						Twenty-Six Weeks Ended
U.S. dollars in millions	July 29, 2023			July 30, 2022				July 29, 2023			July 30, 2022
Net sales	$	1,223		$	1,248			$	2,261		$	2,330
Segment profit	$	192		$	197			$	309		$	324
Segment profit margin	15.7		%	15.8		%		13.7		%	13.9		%
Comp store sales(a)	1		%	N/A				1		%	N/A
Stores in operation at end of period:
Winners								299			295
HomeSense								154			150
Marshalls								106			106
Total								559			551
Selling square footage at end of period (in millions):
Winners								6			6
HomeSense								3			3
Marshalls								2			2
Total								11			11

(a)Comp store sales reported for fiscal 2024 and was not applicable for fiscal 2023.

Net Sales

Net sales for TJX Canada were $1.2 billion for the second quarter of fiscal 2024, a decrease of 2%, compared to net sales for the second quarter of fiscal 2023. This decrease in the second quarter reflects a negative foreign currency exchange rate impact of 4%, partially offset by a 1% increase in comp store sales and a 1% increase in non-comp store sales.

Net sales for TJX Canada were $2.3 billion for the first six months of fiscal 2024, a decrease of 3%, compared to net sales for the first six months of fiscal 2023. This decrease in the first six months reflects a negative foreign currency exchange rate impact of 5%, partially offset by a 1% increase in comp store sales and a 1% increase in non-comp store sales.

The increase in comp store sales for both the second quarter and first six months of fiscal 2024 was driven by an increase in customer traffic, partially offset by a decrease in average basket.

Segment Profit Margin

Segment profit margin decreased to 15.7% for the second quarter of fiscal 2024 compared to 15.8% for the same period last year. The decrease for the second quarter of fiscal 2024 was driven by higher incentive compensation costs, partially offset by higher merchandise margin. Merchandise margin reflects favorable freight costs, partially offset by higher markdowns, higher shrink accrual rates in the current year, and lower markon.

Segment profit margin decreased to 13.7% for the first six months of fiscal 2024 compared to 13.9% for the same period last year. The decrease for the first six months of fiscal 2024 was driven by higher administrative costs and higher incentive compensation costs, which were partially offset by higher merchandise margin. Merchandise margin reflects favorable freight costs, partially offset by higher shrink accrual rates in the current year.

TJX International


	Thirteen Weeks Ended						Twenty-Six Weeks Ended
U.S. dollars in millions	July 29, 2023			July 30, 2022				July 29, 2023			July 30, 2022
Net sales	$	1,621		$	1,503			$	3,034		$	2,920
Segment profit	$	32		$	105			$	70		$	118
Segment profit margin	2.0		%	7.0		%		2.3		%	4.0		%
Comp store sales(a)	3		%	N/A				4		%	N/A
Stores in operation at end of period:
T.K. Maxx								636			626
Homesense								79			77
T.K. Maxx Australia								76			71
Total								791			774
Selling square footage at end of period (in millions):
T.K. Maxx								13			13
Homesense								1			1
T.K. Maxx Australia								1			1
Total								15			15

(a)Comp store sales reported for fiscal 2024 and was not applicable for fiscal 2023.

Net Sales

Net sales for TJX International were $1.6 billion for the second quarter of fiscal 2024, an increase of 8%, compared to $1.5 billion for the second quarter of fiscal 2023. This increase in the second quarter reflects a positive foreign currency exchange rate impact of 4%, a 3% increase in comp store sales and a 1% increase in non-comp store sales.

Net sales for TJX International were $3 billion for the first six months of fiscal 2024, an increase of 4%, compared to $2.9 billion for the first six months of fiscal 2023. This increase in the first six months of fiscal 2024 reflects a 4% increase in comp store sales and a 1% increase in non-comp store sales, partially offset by a negative foreign currency exchange rate impact of 1%.

The increase in comp store sales for both the second quarter and first six months of fiscal 2024 was driven by an increase in both customer traffic and average basket.

During the second quarter of fiscal 2024, TJX International made online shopping available in Germany at tkmaxx.de and in Austria at tkmaxx.at. E-commerce sales represented less than 3% of TJX International’s net sales for the second quarters of both fiscal 2024 and fiscal 2023 and less than 4% for the first six months of the same periods.

Segment Profit Margin

Segment profit margin decreased to 2.0% for the second quarter of fiscal 2024 compared to 7.0% for the same period last year. The decrease for the second quarter of fiscal 2024 was primarily due to a reserve related to a German government COVID program receivable, and higher administrative costs, incremental store wage and higher incentive compensation costs, partially offset by the favorable impact of transactional foreign exchange.

Segment profit margin decreased to 2.3% for the first six months of fiscal 2024 compared to 4.0% for the same period last year. The decrease for the first six months of fiscal 2024 was primarily due to a reserve related to a German government COVID program receivable, and higher administrative costs, incremental store wage and higher incentive compensation costs, partially offset by the favorable impact of transactional foreign exchange and higher merchandise margin. Merchandise margin reflects strong markon and favorable freight costs.

GENERAL CORPORATE EXPENSE


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
In millions	July 29, 2023		July 30, 2022			July 29, 2023		July 30, 2022
General corporate expense	$	194	$	188		$	350	$	265

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

The increase in general corporate expense for the second quarter of fiscal 2024 was primarily driven by a contribution to TJX’s U.S. charitable foundation and higher incentive and share-based compensation costs, partially offset by favorable mark-to-market adjustments on fuel and inventory hedges.

The increase in general corporate expense for the first six months of fiscal 2024 was primarily driven by higher incentive and share-based compensation costs, a contribution to TJX’s U.S. charitable foundation and unfavorable mark-to-market adjustments on fuel hedges, partially offset by favorable mark-to-market adjustments on inventory hedges.

ANALYSIS OF FINANCIAL CONDITION

Liquidity and Capital Resources

Our liquidity requirements have traditionally been funded through cash generated from operations, supplemented, as needed, by short-term bank borrowings and the issuance of commercial paper. As of July 29, 2023, there were no short-term bank borrowings or commercial paper outstanding. We believe our existing cash and cash equivalents, internally generated funds and our credit facilities, under which facilities we have $1.5 billion available as of the period ended July 29, 2023, as described in Note I—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements, are adequate to meet our operating needs for the foreseeable future.

As of July 29, 2023, we held $4.6 billion in cash. Approximately $1.3 billion of our cash was held by our foreign subsidiaries with $771 million held in countries where we intend to indefinitely reinvest any undistributed earnings. We have provided for all applicable state and foreign withholding taxes on all undistributed earnings of our foreign subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong and Vietnam through July 29, 2023. If we repatriate cash from such subsidiaries, we should not incur additional tax expense and our cash would be reduced by the amount of withholding taxes paid.

We monitor debt financing markets on an ongoing basis and from time to time may incur additional long-term indebtedness depending on prevailing market conditions, liquidity requirements, existing economic conditions and other factors. In fiscal 2024 we have used, and in the future we may continue to use, operating cash flow and cash on hand to repay portions of our indebtedness, depending on prevailing market conditions, liquidity requirements, existing economic conditions, contractual restrictions and other factors. As such, we may, from time to time, seek to retire, redeem, prepay or purchase our outstanding debt through redemptions, cash purchases, prepayments, refinancings and/or exchanges, in open market purchases, privately negotiated transactions, by tender offer or otherwise. If we use our operating cash flow and/or cash on hand to repay our debt, it will reduce the amount of cash available for additional capital expenditures.

Operating Activities

Operating activities resulted in net cash inflows of $2.1 billion for the six months ended July 29, 2023 and net cash inflows of $6 million for the six months ended July 30, 2022.

Operating cash flows increased compared to fiscal 2023 primarily due to the $1.4 billion change in merchandise inventories net of accounts payable, due to elevated inventories in the prior year attributable to larger in-transit inventory associated with the fiscal 2023 supply chain delays.

Investing Activities

Investing activities resulted in net cash outflows of $819 million for the six months ended July 29, 2023 and $703 million for the six months ended July 30, 2022. The cash outflows for both periods were driven by capital expenditures.

Investing activities in the first six months of fiscal 2024 primarily reflected property additions for store improvements and renovations, investments in our new stores, as well as investments in our distribution centers and offices, including information technology. We anticipate that capital spending for the full fiscal year 2024 will be approximately $1.7 billion to $1.9 billion. We plan to fund these expenditures with our existing cash balances and through internally generated funds.

Financing Activities

Financing activities resulted in net cash outflows of $2.2 billion for the first six months of fiscal 2024 and net cash outflows of $1.9 billion for the first six months of fiscal 2023. The cash outflows for both periods were primarily driven by equity repurchases and dividend payments. Additionally the first six months of fiscal 2024 included a $500 million debt repayment upon maturity.

Debt

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

Equity

Under our stock repurchase programs, we paid $1 billion to repurchase and retire 13.1 million shares of our stock on a settlement basis in the first six months of fiscal 2024. As of July 29, 2023, approximately $2.5 billion remained available under our existing stock repurchase programs. We paid $1.3 billion to repurchase and retire 21.5 million shares of our stock on a settlement basis in the first six months of fiscal 2023. We currently plan to repurchase approximately $2 billion to $2.5 billion of stock under our stock repurchase programs in fiscal 2024. For further information regarding equity repurchases, see Note D – Capital Stock and Earnings Per Share of Notes to Consolidated Financial Statements.

The Inflation Reduction Act of 2022, which became law in August 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022. Beginning on January 1, 2023, these purchases are subject to the excise tax. The excise tax on the net stock repurchase portion of the IRA did not have a material impact on our results of operations or financial position for the first six months ended July 29, 2023. See Note J—Income Taxes of Notes to Consolidated Financial Statements for additional information.

Dividends

We declared quarterly dividends on our common stock of $0.3325 per share in the first six months of fiscal 2024 and $0.295 per share in the first six months of fiscal 2023. Cash payments for dividends on our common stock totaled $725 million for the first six months of fiscal 2024 and $655 million for the first six months of fiscal 2023.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

There have been no material changes to the critical accounting estimates as discussed in TJX's Annual Report on Form 10-K for the fiscal year ended January 28, 2023. For a discussion of accounting standards, see Note A—Basis of Presentation and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements included in TJX’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 and Note A—Basis of Presentation and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

Various statements made in this Quarterly Report on Form 10-Q are forward-looking, and are inherently subject to a number of risks and uncertainties. All statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements, including, among others, statements regarding the Company's anticipated operating and financial performance, business plans and prospects, anticipated dividends and share repurchases, plans with respect to long-term indebtedness, and the Company's plans related to, and expected impact of, a pension payout offer. These statements are typically accompanied by the words “aim,” “anticipate,” “aspire,” “believe,” “continue,” “could,” “should,” “estimate,” “expect,” “forecast,” “goal,” “hope,” “intend,” “may,” “plan,” “project,” “potential,” “seek,” “strive,” “target,” “will,” “would,” or similar words, although not all forward-looking statements contain these identifying words. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Applicable risks and uncertainties include, among others, execution of buying strategy and inventory management; customer trends and preferences; competition; various marketing efforts; operational and business expansion; management of large size and scale; COVID-19 or other public health and public safety issues that affect our operations and consumers; merchandise sourcing and transport; data security and maintenance and development of information technology systems; labor costs and workforce challenges; personnel recruitment, training and retention; corporate and retail banner reputation; evolving corporate governance and public disclosure regulations and expectations with respect to environmental, social and governance matters; expanding international operations; fluctuations in quarterly operating results and market expectations; inventory or asset loss; cash flow; mergers, acquisitions, or business investments and divestitures, closings or business consolidations; real estate activities; economic conditions and consumer spending; market instability; severe weather, serious disruptions or catastrophic events; disproportionate impact of disruptions in the second half of the fiscal year; commodity availability and pricing; fluctuations in currency exchange rates; compliance with laws, regulations and orders and changes in laws, regulations and applicable accounting standards; outcomes of litigation, legal proceedings and other legal or regulatory matters; quality, safety and other issues with our merchandise; tax matters; and other factors that may be described in our filings with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K filed with the SEC. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. We caution investors, potential investors and others not to place considerable reliance on the forward-looking statements contained in this Form 10-Q. The forward-looking statements in this report speak only as of the date of this Form 10-Q, and we do not undertake any obligation to publicly update or revise our forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023.

Item 4. Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of July 29, 2023 pursuant to Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at the reasonable assurance level in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms; and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of implementing controls and procedures.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Act) during the fiscal quarter ended July 29, 2023 identified in connection with the evaluation by our management, including our Chief Executive Officer and Chief Financial Officer, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended January 28, 2023, as filed with the Securities Exchange Commission on March 29, 2023.

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

INFORMATION ON SHARE REPURCHASES

The number of shares of common stock repurchased by TJX during the second quarter of fiscal 2024 and the average price paid per share are as follows:


	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)
April 30, 2023 through May 27, 2023	1,215,308	$	78.17	1,215,308	$	2,948,794,011
May 28, 2023 through July 1, 2023	3,045,032	$	80.46	3,045,032	$	2,703,795,615
July 2, 2023 through July 29, 2023	2,463,325	$	85.25	2,463,325	$	2,493,795,699
Total	6,723,665			6,723,665

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

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

(c)In February 2023, we announced that our Board of Directors had approved a new stock repurchase program that authorized the repurchase of up to an additional $2 billion of our common stock from time to time. Under this program and a previously announced program, we had approximately $2.5 billion available for repurchase as of July 29, 2023.

Item 5. Other Information

During the fiscal quarter ended July 29, 2023, none of our directors or officers adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

Incorporate by Reference

Exhibit No.

Description

Form

Exhibit No.

Filing
Date

10.1

The Letter Agreement dated June 6, 2023 between Richard Sherr and TJX, filed herewith*

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith

32.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith

101

The following materials from The TJX Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 29, 2023, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders’ Equity, and (vi) Notes to Consolidated Financial Statements.

104

The cover page from The TJX Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 29, 2023, formatted in Inline XBRL (included in Exhibit 101)

* Management contract or compensatory plan or arrangement.

SIGNATURE

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

THE TJX COMPANIES, INC.

(Registrant)

Date: August 25, 2023

/s/ John Klinger

John Klinger, Chief Financial Officer

(Principal Financial and Accounting Officer)