TJX Cos. reported earnings came in well above year-ago levels in the fourth quarter as sales grew 27 percent but results trailed Wall Street’s consensus estimates. 

Net sales for the fourth quarter of Fiscal 2022 were $13.9 billion, an increase of 27 percent versus the fourth quarter of Fiscal 2021. Stores were closed for approximately 13 percent of the fourth quarter of Fiscal 2021. Net sales for the fourth quarter of Fiscal 2022 increased 14 percent versus the fourth quarter of Fiscal 2020. U.S. open-only comp-store sales (defined below) increased 13 percent over a 6 percent increase in the fourth quarter of Fiscal 2020. Overall open-only comp-store sales increased 10 percent over a 6 percent increase in the fourth quarter of Fiscal 2020. Net income for the fourth quarter was $940 million and diluted earnings per share were $.78 versus $.81 per share in the fourth quarter of Fiscal 2020.

Earnings at 78 cents a share missed the Street consensus forecast of 91 cents. Group net sales of $13.85 billion also fell shy of analysts’ estimates of $14.2 billion.

For the full year Fiscal 2022, net sales were $48.5 billion, an increase of 51 percent versus the full year Fiscal 2021. Stores were closed for approximately 4 percent of Fiscal 2022 and 24 percent of Fiscal 2021 due to the COVID-19 global pandemic (see table below). Net sales for the full year Fiscal 2022 increased 16 percent versus Fiscal 2020. Full-year U.S. open-only comp-store sales increased 17 percent compared to Fiscal 2020. Full-year Fiscal 2022 overall open-only comp-store sales increased 15 percent compared to Fiscal 2020. Net income for the full year Fiscal 2022 was $3.3 billion. Full-year Fiscal 2022 diluted earnings per share were $2.70 versus $2.67 in Fiscal 2020. Full-year Fiscal 2022 adjusted diluted earnings per share were $2.85, which excludes the negative impact of a second-quarter debt extinguishment charge of $.15 per share.

CEO and President Comments
Ernie Herrman, chief executive officer and president of The TJX Companies, Inc., said, “As I reflect on 2021, I could not be prouder of our Associates and teams around the world. Together, they persevered through the challenges that COVID-19 presented for yet another year and kept the health and safety of our Associates and customers a top priority. I especially want to recognize our store and distribution center Associates, who have been physically coming into work to serve our customers. I also want to thank our global teams that met the supply chain challenges head-on to ensure a consistent flow of exciting merchandise for our customers this holiday season and throughout the year. Our global organization worked together as “One TJX,” and thanks to their dedication and talent, we delivered excellent results in 2021.”

Herrman continued, “For the year, U.S. open-only comp sales were up 17 percent and overall open-only comp-store sales increased 15 percent over Fiscal 2020, with double-digit increases for both the U.S. businesses and overall TJX every quarter of the year. For the fourth quarter, we saw a 13 percent open-only comp sales increase for the U.S. and a 10 percent increase in overall open-only comps, both over 6 percent comp sales increases in the fourth quarter of Fiscal 2020. Fourth-quarter sales were trending higher before the surges in Omicron. During the holiday selling season and throughout the year, our shoppers responded to our amazing brands, excellent values, and inspiring treasure hunt shopping experience. Our home businesses across all of our divisions delivered phenomenal open-only comp-store sales performance, and overall apparel open-only comp-store sales increased high-single digits in Fiscal 2022. While freight and wage cost pressures remain elevated, we are pleased that our retail pricing strategy is working very well. This gives us confidence in improving our profitability when the macro environment normalizes while continuing to offer exceptional values to customers every day. In a year when we grew sales to nearly $50 billion, we are very confident in our goal of TJX becoming an increasingly profitable, $60 billion-plus company.”

Inventory
Total inventories as of January 29, 2022 increased to $6.0 billion, compared with $4.9 billion at the end of Fiscal 2020, primarily due to higher in-transit inventory. Overall availability of quality, branded merchandise in the marketplace remains excellent, and the company is well-positioned to flow fresh spring merchandise to its stores and online.

Cash and Shareholder Distributions
For the full year Fiscal 2022, the company generated $3.1 billion of operating cash flow and ended the year with $6.2 billion of cash.

During the fourth quarter, the company returned a total of $1.4 billion to shareholders. The company repurchased a total of $1.1 billion of TJX stock, retiring 15.2 million shares, and paid $310 million in shareholder dividends during the quarter. In Fiscal 2022, the company returned a total of $3.4 billion to shareholders. In Fiscal 2022, the company repurchased a total of $2.2 billion of TJX stock, retiring 31.5 million shares, and paid $1.25 billion in shareholder dividends.

With the company’s continued strong cash flow, TJX announced today that it intends to increase the regular quarterly dividend on its common stock expected to be declared in March 2022 and payable in June 2022 to $.295 per share, subject to the approval of the company’s Board of Directors. This would represent a 13 percent increase over the current per share dividend.

The company is also announcing today its plan to repurchase approximately $2.25 to $2.50 billion of TJX stock during the fiscal year ending January 28, 2023. With $0.8 billion remaining at Fiscal 2022 year-end under the company’s existing stock repurchase programs, the company’s Board of Directors approved a new stock repurchase program that authorizes the repurchase of up to an additional $3.0 billion of TJX common stock from time to time. The new authorization represents approximately 4 percent of the company’s outstanding shares at current prices. The new stock repurchase program marks the 22nd program approved by the Board since 1997. Under the company’s repurchase programs, share repurchases may be made from time to time in market or private transactions and may include derivative transactions. The repurchase program announced today has no time limit and may be suspended or discontinued at any time.

First Quarter and Full Year Fiscal 2023 Outlook
For the first quarter of Fiscal 2023, the company is planning U.S. comparable store sales to be up 1 percent to 3 percent over an outsized 17 percent U.S. open-only comp-store sales increase in the first quarter of Fiscal 2022. The company is very pleased with its strong U.S. comparable store sales growth (defined below) to start the first quarter of Fiscal 2023. The company’s first-quarter Fiscal 2023 U.S. comparable store sales outlook takes into account the cadence of U.S. open-only comp stores sales growth in the first quarter of Fiscal 2022, which was up low to mid-single digits to start the quarter and then accelerated to a 20 percent-plus increase in March and April combined. For the first quarter of Fiscal 2023, the company expects diluted earnings per share to be in the range of $.58 to $.61 versus earnings per share of $.44 in the prior year.

For the full year Fiscal 2023, the company is planning U.S. comparable store sales to be up 3 percent to 4 percent over an outsized 17 percent U.S. open-only comp-store sales increase in Fiscal 2022. At this time, the company is not providing full-year Fiscal 2023 diluted earnings per share guidance given the current uncertainty around how long elevated expense pressures may persist.

Photo courtesy TJX Cos.