What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2020-08-28 compared with 2020-05-21 · 221 added, 168 removed, 229 unchanged (63% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Thirteen Weeks (first quarter) Ended May 2, 2020

The Thirteen Weeks (first quarter) Ended May 4, 2019

The Thirteen Weeks (second quarter) and Twenty-Six Weeks (six months) Ended August 1, 2020

The Thirteen Weeks (second quarter) and Twenty-Six Weeks (six months) Ended August 3, 2019

We are the leading off-price apparel and home fashions retailer in the U.S.

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Impact of the COVID-19 Pandemic

In December 2019, COVID-19 emerged and spread worldwide.

The World Health Organization declared COVID-19 a pandemic in March 2020, resulting in federal, state and local governments and private entities mandating various restrictions, including travel restrictions, restrictions on public gatherings, stay-at-home orders and advisories and quarantining of people who may have been exposed to the virus.

As the ongoing public health impact and the associated containment and remediation efforts related to the COVID-19 pandemic are complex and rapidly evolving, the Company's plans as described below may change.

The continuation of the outbreak may cause prolonged or additional intermittent periods of store closures and modified operating schedules which may further increase operating costs for health and safety protocols and may result in changes in customer behaviors, including a potential reduction in consumer discretionary spending in our stores.

During 2019, COVID-19 emerged and spread worldwide.

The World Health Organization declared COVID-19 a pandemic in March 2020, and federal, state and local governments and private entities began issuing various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining protocols.

I n March 2020, the Company temporarily closed all of its stores, distribution centers and offices, and online businesses, with Associates working remotely where possible .

In May 2020, the Company began reopening its stores and as of August 1, 2020, more than 4,500 of the Company’s worldwide stores, and each of its e-commerce shopping websites, have reopened.

In addition to the temporary closure and reopening of our stores and other facilities, the ongoing COVID-19 pandemic has led to modifications to our operations, including implementing health and safety protocols, and impacted consumer behavior.

The continued scope and impact of the pandemic is unpredictable and may cause additional intermittent or prolonged periods of store closures, and may result in additional changes in consumer demand and behavior or require further modifications to our operations.

These potential impacts may lead to increased asset recovery and valuation risks, such as impairment of our stores and other assets and an inability to realize deferred tax assets due to sustaining losses in certain jurisdictions.

The uncertainties in the global economy will likely impact the financial viability of some number of our suppliers, which may interrupt our supply chain, and require other changes to our operations.

The uncertainties in the global economy may also impact the financial viability of some of our suppliers, which may interrupt our supply chain, and require other changes to our operations.

These and other factors have had and may continue to have a material impact on our business, results of operations, financial position and cash flows.

At this point, we cannot reasonably estimate the duration and severity of this pandemic or the associated remediation and containment efforts and, therefore, the Company is not providing an updated financial outlook at this time.

Store and Associate Actions

We have taken numerous steps to protect the health and well-being of our Associates, customers and communities, while also focusing on further strengthening our financial liquidity and flexibility.

After closely monitoring and taking into consideration the guidance from federal, state and local governments, in March 2020, the Company temporarily closed all of its stores, distribution centers and offices, and online businesses, with Associates working remotely where possible.

The Company continued to pay all active TJX Associates through the week ended April 11, 2020.

Effective April 12, 2020, the Company temporarily furloughed the majority of its hourly store and distribution center Associates in the U.S.

and Canada, with employee benefits for eligible Associates continuing through the temporary furlough at no cost to impacted Associates.

The Company also took comparable actions with respect to portions of its European and Australian workforces.

We have been highly focused on the changes we are making to operate more safely in light of the pandemic.

The Company has established several global task force teams focused on a broad range of aspects of navigating the Company through this global health crisis.

We intend to follow newly established health pr otocols, provide personal protective equipment to our Associates, and implement social distancing working practices.

In our stores prior to reopening, we are implementing occupancy limits, installing protective shields at each register, encouraging social distancing through regular in-store announcements, signage, and markers in our queue lines, implementing new processes for handling merchandise returns, and instituting new cleaning regimens, including enhanced cleaning of high-touch surfaces throughout the day.

Beginning May 2, 2020 the Company started to reopen stores in select states and countries.

As we reopen stores, we are doing so in accordance with local government guidelines.

As of May 21, 2020, the Company has reopened more than 1,600 of its stores worldwide.

In the United States, the Company has fully or partially reopened in 25 states.

Internationally, TJX Canada has begun to open stores in some provinces, and the Company's stores in Germany, Poland, Austria, the Netherlands, and Australia are fully open.

The Company has also reopened its U.K.

e-commerce businesses.

The Company expects to continue reopening stores and other facilities around the world in a phased approach as more states and countries reopen for retail.

Globally, the Company reopened stores only when it had additional health and wellness practices in place, such as access to personal protective equipment, enhanced cleaning efforts and social distancing protocols for its Associates and customers.

We have taken numerous steps to protect the health and well-being of our Associates, customers and communities.

We have been highly focused on the changes we are making to operate more safely in light of the COVID-19 pandemic.

The Company established several global task force teams focused on a broad range of strategies to navigate the Company through this global health crisis.

Globally, the Company has put in place practices designed to help protect the health and well-being of its Associates and customers, including social distancing protocols (which included occupancy limits and reducing in-store inventory levels), access to personal protective equipment and enhanced cleaning efforts.

For example, upon reopening its stores, the Company installed protective shields at registers, encouraged social distancing through regular in-store announcements, signage, and markers in our queue lines, implemented new processes for handling merchandise returns, and instituted new cleaning regimens, including enhanced cleaning of high-touch surfaces throughout the day.

Further, the Company has mandated that shoppers wear a face covering in its stores throughout the U.S.

In Europe and Australia, the Company is following regional governmental face covering requirements.

Financial Actions

Balance Sheet, Cash Flow and Liquidity

The temporary closure of our stores has had an unprecedented and material impact on our results of operations, financial position and liquidity.

As further detailed below in Results of Operations , this impact included a 52% decrease in net sales for the first quarter of fiscal 2021 compared to the same period last year, resulting in a net operating loss which includes a significant inventory write-down.

We have taken steps to strengthen our financial position and balance sheet, and to maintain financial liquidity and flexibility, including suspending our share repurchase program, reviewing and reducing operating expenses, reducing the fiscal 2021 capital expenditure plan to a range of $0.4 billion to $0.6 billion, lowering fiscal 2021 store openings to approximately 50 stores, pausing a majority of our planned store remodels, and delaying a majority of distribution center, home office and IT capital spending.

In addition, the Company drew down the entire $1.0 billion on our revolving credit facilities and issued $4.0 billion in aggregate principal long-term debt.

For additional information on the new debt issuances, see Note J—Long-Term Debt and Credit Lines.

The Company did not declare a dividend for the first quarter of 2021, and at this time does not expect to declare a dividend in the second quarter of fiscal 2021.

The Company is committed to resuming dividend payments for the long term whenever the environment and its business stabilize.

During the first quarter of fiscal 2021, we negotiated rent deferrals (primarily for second quarter lease payments) for a significant number of our stores, with repayment at later dates, primarily in fiscal 2022.

The temporary closure of our stores has had a material impact on our results of operations, financial position and liquidity.

As further detailed below in Results of Operations , this impact included a 42% decrease in net sales for the first six months of fiscal 2021 compared to the same period last year, resulting in net operating losses that include significant inventory write-downs.

The Company ended the second quarter with $6.6 billion of cash.

During the second quarter, the Company generated positive operating cash flows and paid off the $1.0 billion it drew down from its revolving credit facilities in March 2020.

Subsequent to the second quarter of fiscal 2021, on August 10, 2020, the Company also increased its borrowing capacity by entering into a new $500.0 million facility, making a total of $1.5 billion available to the Company under revolving credit facilities.

For additional information on the new credit facilities, see Note J—Long-Term Debt and Credit Lines.

The Company intends to continue to be prudent with its expenses and capital spend, now expected to be in a range of $0.6 billion to $0.8 billion, lowering fiscal 2021 planned store openings to approximately 50 stores, pausing a majority of our planned store remodels, and delaying a significant portion of distribution center, home office and IT capital spending.

The Company did not declare a dividend in the first six months of fiscal 2021 and does not expect to declare a dividend in the third quarter of fiscal 2021 and has suspended its share buyback program.

During the first half of fiscal 2021, we negotiated rent deferrals (primarily for second quarter lease payments) for a significant number of our stores, with repayment at later dates, primarily in fiscal 2022.

Consistent with updated guidance from the FASB in April 2020, we have elected to treat the COVID-19 pandemic-related rent deferrals as a resolution of a contingency by remeasuring the remaining consideration in the contract, with a corresponding adjustment to the right-of-use asset, using the remeasured consideration.

The Company did not reassess the lease classification and did not update the discount rate used to measure the lease liability.

For the first quarter of fiscal 2021, as a result of the COVID-19 pandemic and store closures, the Company evaluated the value of its inventory.

Permanent markdowns, which have been or are expected to be taken upon reopening of the stores, on transitional or out of season merchandise and merchandise that was already in markdown status, combined with the write-off of perishable goods, resulted in a reduction of approximately $0.5 billion in inventory at May 2, 2020.

While the Company recognized these markdowns in the first quarter of fiscal 2021, the non-perishable inventory is expected to be sold in the second quarter of fiscal 2021.

For the first half of fiscal 2021, the Company evaluated the value of its inventory in light of store closures due to the COVID-19 pandemic.

Permanent markdowns, which have been taken upon reopening of the stores, on transitional or out of season merchandise and merchandise that was already in markdown status, combined with the write-off of perishable goods, resulted in a reduction of approximately $0.4 billion in inventory for the six months ended August 1, 2020, which reflects a $0.1 billion reversal of the estimated markdowns recorded in the first quarter of fiscal 2021.

Given the substantial reduction in our sales and the reduced cash flow projections as a result of the store closures due to the COVID-19 pandemic, we determined that a triggering event occurred and that an impairment assessment was warranted for certain stores.

This analysis resulted in an immaterial amount of impairment charges related to long-lived assets and operating lease right of use assets in the first quarter of fiscal 2021.

This analysis resulted in an immaterial amount of impairment charges related to long-lived assets and operating lease right of use assets in the first half of fiscal 2021.

Operating Expenses

The Company has incurred additional payroll and supply costs associated with social distancing protocols and cleaning regimens in our stores, distribution centers, and offices.

In addition, the Company provided a discretionary appreciation bonus for the second quarter of fiscal 2021 to store and distribution center Associates and incurred incremental costs for personal protective equipment and additional cleaning supplies.

We expect that many of these costs will continue through the second half of fiscal 2021.

We have implemented, and plan to continue to implement, cost saving initiatives to reduce some ongoing variable and discretionary spending, including substantially reducing expenses such as advertising and other non-essential expenses in the short term.

The Company is planning on incurring incremental costs going forward for personal protective equipment, including masks and gloves for Associates, as well as additional cleaning supplies.

In addition, the Company is expecting to have additional payroll and supply costs associated with social distancing protocols and cleaning regimens we are putting in place in our stores, distribution centers, and offices.

As a result of the global COVID-19 pandemic, governments in the U.S., U.K., Canada and various other jurisdictions have implemented programs to encourage companies to retain and pay employees who are unable to work or are limited in the work that they can perform in light of closures or a significant decline in sales.

TJX continued to pay all employees through at least April 11, 2020 and continues to provide benefits for furloughed eligible impacted employees that are unable to work.

As such, we qualify for certain of these provisions, which will partially offset related expenses.

During the quarter ended May 2, 2020, these programs reduced our expenses by approximately $0.2 billion on our Consolidated Statements of (Loss) Income.

We expect that these programs will continue to provide additional liquidity through the second quarter of fiscal 2021.

As a result of the COVID-19 pandemic, governments in the U.S., U.K., Canada and various other jurisdictions have implemented programs to encourage companies to retain and pay employees who are unable to work or are limited in the work that they can perform in light of closures or a significant decline in sales.

TJX continued to pay and provide benefits to eligible impacted employees during the second quarter of fiscal 2021.

As such, we qualified for certain of these provisions, which partially offset related expenses.

During the second quarter of fiscal 2021 and the six months ended August 1, 2020 , these programs reduced our expenses by approximately $0.2 billion and $0.4 billion, respectively, on our Consolidated Statements of (Loss) Income.

RESULTS OF OPERATIONS

Matters Affecting Comparability

As a result of the COVID-19 pandemic, our stores, e-commerce businesses and distribution centers were closed for nearly half of the first quarter of fiscal 2021.

In addition to lost revenues, we continued to pay wages and provide benefits to our Associates, and we also incurred higher expenses due to inventory write-down costs and fulfillment of certain vendor commitments.

This resulted in operating losses at each of our divisions.

As a result, comparisons of expense ratios and year-over-year trends are not a meaningful way to discuss our operating results this quarter.

Overview of our financial performance for the quarter ended May 2, 2020:

– Net sales decreased 52% to $4.4 billion for the first quarter of fiscal 2021 versus last year’s first quarter of fiscal 2020 sales of $9.3 billion.

As of May 2, 2020, the number of stores in operation increased 4% (including stores that were temporarily closed due to COVID-19) and selling square footage increased 3% compared to the end of the fiscal 2020 first quarter.

– Diluted (loss) earnings per share for the first quarter of fiscal 2021 were $(0.74) versus $0.57 in the first quarter of fiscal 2020.

– Pre-tax margin (the ratio of pre-tax (loss) income to net sales) for the first quarter of fiscal 2021 was (30.5)%, a 40.6 percentage point decrease compared with 10.1% in the first quarter of fiscal 2020.

– Our cost of sales, including buying and occupancy costs, ratio for the first quarter of fiscal 2021 was 100.1%, a 28.6 percentage point increase compared with 71.5% in the first quarter of fiscal 2020.

– Our selling, general and administrative (“SG&A”) expense ratio for the first quarter of fiscal 2021 was 29.8%, an 11.5 percentage point increase compared with 18.3% in the first quarter of fiscal 2020.

– 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 7% on a reported basis and down 6% on a constant currency basis at the end of the first quarter of fiscal 2021 as compared to a 6% increase in average per store inventories on a reported basis and a 7% increase on a constant currency basis in the first quarter of fiscal 2020.

– During the first quarter of fiscal 2021, we returned approximately $0.5 billion to our shareholders through payment of the dividend declared in the fourth quarter of fiscal 2020 and share repurchases.

As a result of the COVID-19 pandemic, our stores, e-commerce businesses and distribution centers were closed for nearly one-third of the second quarter and approximately 40% of the first six months of fiscal 2021.

In addition to lost revenues, we continued to pay wages and provide benefits to many of our Associates during the closure, incurred higher expenses due to inventory write-down costs and incremental operating expenses upon reopening for new health and safety practices compliant with local requirements.

This significantly impacted the operating results of all of our divisions and as a result, comparisons of expense ratios on reported results are not a meaningful way to discuss our operating results for the periods ended August 1, 2020.

Overview of our financial performance for the quarter ended August 1, 2020:

– Net sales decreased 32% to $6.7 billion for the second quarter of fiscal 2021 versus last year’s second quarter of fiscal 2020 sales of $9.8 billion.

As of August 1, 2020, the number of stores in operation (including stores that had been temporarily closed due to COVID-19) increased 3% and selling square footage increased 3% compared to the end of the fiscal 2020 second quarter.

– Diluted (loss) earnings per share for the second quarter of fiscal 2021 were $(0.18) versus $0.62 in the second quarter of fiscal 2020.

– Pre-tax margin (the ratio of pre-tax (loss) income to net sales) for the second quarter of fiscal 2021 was (1.4)%, an 11.8 percentage point decrease compared with 10.4% in the second quarter of fiscal 2020.

– Our cost of sales, including buying and occupancy costs, ratio for the second quarter of fiscal 2021 was 77.6%, a 5.8 percentage point increase compared with 71.8% in the second quarter of fiscal 2020.

– Our selling, general and administrative (“SG&A”) expense ratio for the second quarter of fiscal 2021 was 22.9%, a 5.2 percentage point increase compared with 17.7% in the second quarter of fiscal 2020.

– 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 33% on a reported basis and down 34% on a constant currency basis at the end of the second quarter of fiscal 2021 as compared to a 6% increase in average per store inventories on a reported basis and a 7% increase on a constant currency basis in the second quarter of fiscal 2020.

– There were no dividends declared or share repurchases during the second quarter of fiscal 2021.

See the Impact of the COVID-19 Pandemic section above for the actions taken regarding the Company's share repurchase and dividend programs.

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Administration has imposed tariffs on imports from China.

We continue to monitor the developments very closely and have started to see margin pressure based on the tariffs currently in place on the goods sourced directly from China.

We continue to monitor the developments very closely and have seen margin pressure based on the tariffs currently in place on the goods sourced directly from China.

The impact on vendor and competitor pricing, consumer demand, potential tariff pass-throughs and the fluctuation of the Chinese currency remains uncertain.

Net sales for the quarter ended May 2, 2020 totaled $4.4 billion, a 52% decrease versus last year’s first quarter fiscal 2020 net sales of $9.3 billion.

The decrease in net sales is driven by temporary closures of all stores as of March 19, 2020, and earlier in certain markets as well as the temporary closure of our online businesses as a result of the COVID-19 pandemic.

Prior to these temporary closures, the Company’s sales trends remained strong across all four major divisions in February 2020.

For the month of February, which was the month prior to the pandemic having an impact on our operations, consolidated comp sales were 5% primarily driven by customer traffic, with all four major divisions having a February comp sales increase of 5% or better.

As a result of the extended store closures, due to the pandemic and our policy relating to store closures for a period of time, we have no stores classified as comparable at the end of the first quarter of fiscal 2021.

As of May 2, 2020, our store count increased 4% and selling square footage increased 3% compared to the end of the first quarter last year.

As a result of the extended store closures due to the pandemic and our policy relating to extended store closures on comp store status for a period of time, we have no stores classified as comp stores at the end of the first quarter fiscal 2021.

As a result of the pandemic, we intend to reevaluate comp sales reporting going forward as stores start to reopen.

Net sales for the quarter ended August 1, 2020 totaled $6.7 billion, a 32% decrease versus last year’s second quarter net sales of $9.8 billion.

Net sales for the six months ended August 1, 2020 totaled $11.1 billion, a 42% decrease versus last year’s six-month net sales of $19.1 billion.

The decrease in net sales for both periods was driven by temporary store and online business closures as a result of the COVID-19 pandemic, with most stores being closed for nearly one-third of the second quarter and approximately 40% of the first six months of fiscal 2021.

As a result of the extended store closures due to the COVID-19 pandemic and our policy relating to the treatment of extended store closures when calculating comp store sales, we had no stores classified as comp stores at the end of the second quarter fiscal 2021.

In order to provide a performance indicator for our stores as they reopen, the Company is temporarily reporting a new sales measure, open-only comp store sales.

Open-only comp store sales includes stores initially classified as comp stores at the beginning of fiscal 2021, and reports the sales increase or decrease of these stores for the days the stores were open in the current period against sales for the same days in the prior year.

Our historical definition of comp sales is presented below for reference.

Open-only comp store sales were down 3% for the second quarter and the first six months of fiscal 2021 as compared to same periods last year.

These results reflect a decrease in customer traffic partially offset by increased average basket.

Our stores were open for approximately two-thirds of the second quarter.

Sales were strong across all divisions as we reopened and declined during the quarter, with open-only comp percentages ending the quarter down mid-teens.

This decline was due to lower traffic and lower inventory levels.

While the environment remains uncertain, these significantly lower open-only comps continued into the start of the third quarter and we expect that this trend may continue through the third quarter.

Home businesses across all major divisions outperformed apparel for the second quarter and first six months of fiscal 2021.

Historical Definition of Comp Store Sales

We are temporarily reporting a new sales measure, open-only comp store sales, as described above.

The following reflects the way that we have historically classified and reported comp sales results.

We define comparable store sales, or comp 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 sales on a 52-week basis by comparing the current and prior year weekly periods that are most closely aligned.

We previously defined comparable store sales, or comp 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 calculated comp 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.

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In fiscal 2020, Sierra stores that otherwise fit the comp store definition were included in comp stores in our Marmaxx segment.

Comp sales of our foreign segments are calculated by translating the current year’s comp sales of our foreign segments at the same exchange rates used in the prior year.

Comp sales of our foreign segments are calculated by translating the current year’s comp 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.

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The following table sets forth certain information about our operating results as a percentage of net sales for the following periods:

Thirteen Weeks Ended

Thirteen Weeks Ended Twenty-Six Weeks Ended

2020 August 3,

2019 August 1,

2020 August 3,

Net sales 100.0 % 100.0 % 100.0 % 100.0 %

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Cost of Sales, Including Buying and Occupancy Costs

Cost of sales, including buying and occupancy costs, was $4.4 billion for the first quarter of fiscal 2021, a decrease of $2.2 billion, compared to $6.6 billion for the first quarter of fiscal 2020.

The most significant factor in this decline was the cost of merchandise on lost sales, which were approximately $5 billion less than last year’s sales for the first quarter of fiscal 2020.

Inventory write down costs of approximately $0.5 billion reflect markdowns we estimate would be needed on transitional, perishable or out of season merchandise upon the reopening of our stores, partially offset the significant decline in the cost of merchandise sold.

Our occupancy costs are fixed and although rent deferrals were negotiated to help with our liquidity, our year over year costs were comparable.

There was some reduction in our payroll costs, primarily hourly associates as many were furloughed in early April.

We continued to pay these associates through at least April 11, 2020 after we closed the distribution centers.

These payroll costs were partially offset by approximately $35 million from government programs available in the U.S.

Cost of sales, including buying and occupancy costs, was $5.2 billion for the second quarter of fiscal 2021, a decrease of $1.9 billion, compared to $7.0 billion for the second quarter of fiscal 2020.

Cost of sales, including buying and occupancy costs, was $9.6 billion for the six months ended August 1, 2020, a decrease of $4.1 billion, compared to $13.7 billion for the six months ended August 3, 2019.

The most significant factor in this decline was the cost of merchandise on lost sales, which were approximately $3.1 billion less than last year’s sales for the fiscal 2020 second quarter and approximately $8.0 billion less than sales for the first six months of fiscal 2020.

Merchandise margin remained strong due to favorable markon and lower than expected markdowns for the second quarter of fiscal 2021.

The merchandise margin for the six months ended August 1, 2020 also reflects improved markon which was more than offset by markdowns, primarily recorded in the first quarter of fiscal 2021.

Our estimated markdowns recorded in the first quarter of fiscal 2021 were partially reversed by $0.1 billion in the second quarter of fiscal 2021 as actual markdowns came in lower due to strong sales demand upon initial reopening.

In addition, a significant change in our inventory levels has an impact on our buying and distribution costs as a portion of these costs are typically allocated to our cost for merchandise.

As a result of our reduced buying activity and lower inventory levels, a greater portion of these costs were expensed in the second quarter and first six months of fiscal 2021 as compared to last year.

The temporary closure of our distribution centers resulted in reduced payroll costs due to Associate furloughs at our distribution centers during the second quarter and first six months of fiscal 2021.

In addition, payroll costs were reduced by approximately $28 million for the second quarter and by approximately $63 million for the first six months of fiscal 2021 from government programs available in the U.S.

and in Canada, the U.K.

and various other jurisdictions.

There were smaller reductions in costs due to the store closures, such as store repairs and maintenance.

These payroll savings were partially offset by incremental payroll and supply costs to implement safety protocols upon reopening as well as a discretionary appreciation bonus for our Associates.

It is important to note that a significant portion of our occupancy costs are fixed and although rent deferrals were negotiated to help with our liquidity, our year over year occupancy costs were comparable.

There was a reduction in some of our variable costs due to the store and distribution center closures, such as store repairs and maintenance and travel costs.

Selling, General and Administrative Expenses

SG&A expenses were $1.3 billion for the first quarter of fiscal 2021, a decrease of $0.4 billion, compared to $1.7 billion for the first quarter of fiscal 2020.

This was primarily driven by lower store payroll costs.

The change in store payroll includes the additional payroll we paid our hourly associates after the store closures, which was more than offset by the savings from subsequently furloughing these Associates and $152 million from government programs available in the U.S.

SG&A expenses were $1.5 billion for the second quarter of fiscal 2021, a decrease of $0.2 billion, compared to $1.7 billion for the second quarter of fiscal 2020.

SG&A expenses were $2.8 billion for the six months ended August 1, 2020, a decrease of $0.6 billion, compared to $3.4 billion for the six months ended August 3, 2019.

The decrease for the second quarter and six months ended August 1, 2020 was primarily driven by lower store payroll costs.

The lower store payroll costs reflect store closures partially offset by incremental payroll investments as stores reopened to allow for enhanced cleaning and monitoring capacity, as well as a discretionary appreciation bonus for the second quarter of fiscal 2021.

Store payroll also includes the additional payroll we paid our Associates during the temporary store closures, which was partially offset by $196 million for the second quarter and $348 million for the first six months of fiscal 2021 from government programs available in the U.S.

and in Canada, the U.K.

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Additionally, other variable store costs such as credit processing fees and advertising spend were lower as a result of the temporary store closures due to the COVID-19 pandemic.

The decrease also reflects lower share-based compensation costs and incentive compensation accruals.

Interest Expense, net

The components of interest expense, net are summarized below:

Thirteen Weeks Ended

In millions May 2,

Thirteen Weeks Ended Twenty-Six Weeks Ended

In millions August 1,

2020 August 3,

2019 August 1,

2020 August 3,

Interest expense $ 60.2 $ 15.4 $ 92.8 $ 30.7

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Interest expense, net $ 57.3 $ 2.9 $ 80.7 $ 3.7

Net interest expense increased for the three months ended May 2, 2020 compared to the same period in fiscal 2020, primarily driven by the issuance of additional debt and the draw down on our revolving credit facilities due to the COVID-19 pandemic.

Net interest expense increased for the second quarter of fiscal 2021 and the six months ended August 1, 2020 compared to the same periods in fiscal 2020, primarily driven by the issuance of additional debt, lower interest income and borrowings on the revolving credit facilities due to the COVID-19 pandemic.

Provision for Income Taxes

The e ffective income tax rate was 33.9% for the first quarter of fiscal 2021 and 25.2% for the first quarter of fiscal 2020.

The increase in the effective income tax rate is primarily due to the anticipated benefit from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020.

The CARES Act provides for net operating losses in fiscal 2021 to be carried back to earlier tax years with higher tax rates than the current year.

The e ffective income tax rate was (132.8)% for the second quarter of fiscal 2021 compared to 25.7% for the second quarter of fiscal 2020.

The e ffective income tax rate was 23.2% for the six months ended August 1, 2020 compared to 25.5% for the six months ended August 3, 2019.

The second quarter’s negative effective income tax rate is primarily due to the reversal of income tax benefit recorded in the first quarter related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020.

The CARES Act provides for net operating losses incurred in fiscal 2021 to be carried back to earlier tax years that have higher tax rates than the current year.

The projected losses subject to carry back to earlier years decreased in the second quarter of fiscal 2021, resulting in a reduction of the year to date income tax benefit and a second quarter negative effective income tax rate.

Net (Loss) / Income and Diluted (Loss) Earnings Per Share

Net (loss) income for the first quarter of fiscal 2021 was $(887) million, or $(0.74) per diluted share compared to $700 million, or $0.57 per diluted share for the first quarter of fiscal 2020.

Net (loss) income for the second quarter of fiscal 2021 was $(214) million, or $(0.18) per diluted share compared to $759 million, or $0.62 per diluted share for the second quarter of fiscal 2020.

Net (loss) income for the six months ended August 1, 2020 was $(1.1) billion, or $(0.92) per diluted share compared to $1.5 billion, or $1.19 per diluted share for the six months ended August 3, 2019.

Segment Information

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These measures of performance should not be considered an alternative to net (loss) income or cash flows from operating activities as an indicator of our performance or as a measure of liquidity.

Due to the temporary closing of all of our stores as a result of the COVID-19 pandemic, the Company’s definition of comp store sales is not applicable for the reported periods.

In order to provide a performance indicator for our stores as they reopen, the Company is temporarily reporting a new sales measure, open-only comp store sales.

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

Thirteen Weeks Ended

dollars in millions May 2,

Thirteen Weeks Ended Twenty-Six Weeks Ended

dollars in millions August 1,

2020 August 3,

2019 August 1,

2020 August 3,

Net sales $ 3,959 $ 6,107 $ 6,657 $ 11,908

Segment (loss) profit $ (710) $ 796

Segment profit (loss) $ 101 $ 855 $ (609) $ 1,651

Segment margin 2.5 % 14.0 % (9.2) % 13.9 %

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Total 54,475 53,765

Net sales for Marmaxx decreased 54% for the first quarter of fiscal 2021 as compared to the same period last year.

The decrease in net sales for the first quarter is due to the temporary closures of all stores during nearly half of the quarter as a result of the COVID-19 pandemic.

Segment (Loss) / Profit

Segment loss was $(710) million for the first quarter of fiscal 2021, a decrease of $1.5 billion, compared to a segment profit of $796 million for the same period last year.

This decrease was primarily driven by a reduction in sales due to the temporary store closures and increased markdowns on merchandise that was primarily transitional, perishable or out of season.

Additionally, this decrease was partially offset by a reduction in payroll, incentive compensation accruals and other variable store expenses.

The reduction in payroll reflects approximately $88 million from government programs as described in the Impacts of the COVID-19 Pandemic section above.

e-commerce businesses, which represent approximately 3% of Marmaxx’s net sales for the first quarter of fiscal 2021 and fiscal 2020, did not have a significant impact on year-over-year segment margin comparisons for the first quarter of fiscal 2021.

Along with our stores, we temporarily closed our online businesses as a result of the COVID-19 pandemic.

Thirteen Weeks Ended

dollars in millions May 2,

Net sales for Marmaxx decreased 35% for the second quarter and 44% for the first six months of fiscal 2021 as compared to the same periods last year.

The decrease in net sales for the second quarter and first six months was due to the temporary closures of all stores as a result of the COVID-19 pandemic and, upon reopening, lower customer traffic, partially offset by an increase in the average basket.

Open-only comp store sales were down 6% for the second quarter and 5% for first six months of fiscal 2021.

Home fashions outperformed apparel for the second quarter of fiscal 2021 and for the six months ended August 1, 2020.

Segment Profit / (Loss)

Segment profit was $101 million for the second quarter of fiscal 2021, a decrease of $754 million, compared to a segment profit of $855 million for the same period last year.

Segment loss was $(609) million for the six months ended August 1, 2020, a decrease of $2.3 billion, compared to a segment profit of $1.7 billion for the same period last year.

The decrease for the second quarter and first six months was primarily driven by a reduction in sales from the temporary store closures.

The decrease for the first six months reflects increased markdowns on merchandise primarily taken in the first quarter of fiscal 2021 due to the COVID-19 pandemic.

The estimated write down in the first quarter of fiscal 2021 was partially reversed in the second quarter of fiscal 2021 as actual markdowns came in lower due to strong sales demand upon initial reopening.

In addition, segment profit declined as a result of our reduced buying activity and lower inventory levels resulting in higher buying and distribution costs in the second quarter and first six months of fiscal 2021 as compared to last year.

The decline in segment profit was partially offset by a reduction in store payroll while the stores were closed, lower advertising spend and other variable store expenses.

The reduction in payroll reflects approximately $83 million for the second quarter of fiscal 2021 and $171 million for the six months ended August 1, 2020 from government programs as described in the Impacts of the COVID-19 Pandemic section above.

Despite a decline in total store payroll costs, we incurred incremental payroll investments as stores reopened to allow for enhanced cleaning and capacity monitoring.

e-commerce businesses, which represented approximately 4% of Marmaxx’s net sales for the second quarter and first six months of fiscal 2021 and less than 3% for the second quarter and first six months of fiscal 2020, did not have a significant impact on year-over-year segment margin comparisons for the second quarter and first six months of fiscal 2021.

Along with our stores, we temporarily closed our online businesses during the first six months of fiscal 2021, as a result of the COVID-19 pandemic.

Thirteen Weeks Ended Twenty-Six Weeks Ended

dollars in millions August 1,

2020 August 3,

2019 August 1,

2020 August 3,

Net sales $ 1,236 $ 1,425 $ 1,996 $ 2,822

Segment (loss) profit $ (154) $ 137

Segment proft (loss) $ 98 $ 129 $ (56) $ 266

Segment margin 7.9 % 9.0 % (2.8) % 9.4 %

7 unchanged sentences

Total 15,719 14,875

Net sales for HomeGoods decreased 46% in the first quarter compared to the same period last year.

The decrease in net sales for the first quarter is due to the temporary closures of all stores during nearly half of the quarter as a result of the COVID-19 pandemic.

Segment (Loss) / Profit

Segment loss was $(154) million for the first quarter of fiscal 2021, a decrease of $291 million, compared to a segment profit of $137 million for the same period last year.

The decrease was primarily driven by a reduction in sales due to the store closures and increased markdowns on merchandise that was primarily transitional, perishable or out of season.

Additionally, this decrease was partially offset by a reduction in payroll, incentive compensation accruals and other variable store expenses.

The reduction in payroll reflects approximately $22 million from government programs as described in the Impacts of the COVID-19 Pandemic section above.

Net sales for HomeGoods decreased 13% in the second quarter and 29% for the first six months of fiscal 2021 as compared to the same periods last year.

The decrease in net sales for the second quarter and first six months is due to the temporary closures of all stores as a result of the COVID-19 pandemic and, upon reopening, lower customer traffic, partially offset by an increase in the average basket.

Open-only comp store sales were up 20% for the second quarter and 12% for first six months of fiscal 2021.

Segment Profit / (Loss)

Segment profit was $98 million for the second quarter of fiscal 2021, a decrease of $31 million, compared to a segment profit of $129 million for the same period last year.

Segment loss was $(56) million for the six months ended August 1, 2020, a decrease of $322 million, compared to a segment profit of $266 million for the same period last year.

The decrease for the second quarter and first six months was primarily driven by a reduction in sales due to the temporary store closures.

In addition, the decrease for the first six months reflects increased markdowns on merchandise primarily taken in the first quarter of fiscal 2021 due to the COVID-19 pandemic.

The decline in segment profit was partially offset by a reduction in store payroll while the stores were closed and lower advertising spend.

The reduction in payroll reflects approximately $24 million for the second quarter of fiscal 2021 and $46 million for the six months ended August 1, 2020 from government programs as described in the Impacts of the COVID-19 Pandemic section above.

Despite a decline in total store payroll costs, we incurred incremental payroll investments as stores reopened to allow for enhanced cleaning and capacity monitoring.

FOREIGN SEGMENTS

Thirteen Weeks Ended

dollars in millions May 2,

Thirteen Weeks Ended Twenty-Six Weeks Ended

dollars in millions August 1,

2020 August 3,

2019 August 1,

2020 August 3,

Net sales $ 592 $ 967 $ 972 $ 1,815

Segment (loss) profit $ (97) $ 97

Segment profit (loss) $ 22 $ 118 $ (75) $ 215

Segment margin 3.7 % 12.2 % (7.7) % 11.9 %

9 unchanged sentences

Total 10,735 10,236

Net sales for TJX Canada decreased 55% during the first quarter ended May 2, 2020 compared to the same period last year.

The decrease in the net sales for the first quarter is due to the temporary closures of all stores during nearly half of the quarter as a result of the COVID-19 pandemic.

Segment (Loss) / Profit

Segment loss was $(97) million for the first quarter of fiscal 2021, a decrease of $194 million, compared to a segment profit of $97 million for the same period last year.

The decrease was primarily driven by a reduction in sales due to the store closures and increased markdowns on merchandise that was primarily transitional, perishable or out of season.

Additionally, this decrease was partially offset by a reduction in payroll, incentive compensation accruals and other variable store expenses.

The reduction in payroll reflects approximately $31 million from government programs as described in the Impacts of the COVID-19 Pandemic section above.

Net sales for TJX Canada decreased 39% during the second quarter and 46% for the first six months of fiscal 2021 compared to the same periods last year.

The decrease in the net sales for the second quarter and first six months is due to the temporary closures of all stores as a result of the COVID-19 pandemic and, upon reopening, lower customer traffic, partially offset by an increase in the average basket.

Open-only comp store sales were down 18% for the second quarter and 13% for first six months of fiscal 2021.

Segment Profit / (Loss)

Segment profit was $22 million for the second quarter of fiscal 2021, a decrease of $96 million, compared to a segment profit of $118 million for the same period last year.

Segment loss was $(75) million for the six months ended August 1, 2020, a decrease of $290 million, compared to a segment profit of $215 million for the same period last year.

The decrease for the second quarter and first six months was primarily driven by a reduction in sales due to the temporary store closures.

In addition, the decrease for the first six months reflects increased markdowns on merchandise primarily taken in the first quarter of fiscal 2021 due to the COVID-19 pandemic.

The decline in segment profit was partially offset by a reduction in store payroll while the stores were closed.

The reduction in payroll reflects approximately $73 million for the second quarter of fiscal 2021 and $104 million for the six months ended August 1, 2020 from government programs as described in the Impacts of the COVID-19 Pandemic section above.

Despite a decline in total store payroll costs, we incurred incremental payroll investments as stores reopened to allow for enhanced cleaning and capacity monitoring.

TJX International

Thirteen Weeks Ended

dollars in millions May 2,

Thirteen Weeks Ended Twenty-Six Weeks Ended

dollars in millions August 1,

2020 August 3,

2019 August 1,

2020 August 3,

Net sales $ 880 $ 1,283 $ 1,452 $ 2,514

10 unchanged sentences

Total 14,204 13,860

Net sales for TJX International decreased 54% for the first quarter compared to the same period last year.

The decrease in net sales for the first quarter is due to the temporary closures of all stores during nearly half of the quarter as a result of the COVID-19 pandemic.

E-commerce sales represent approximately 4% of TJX International’s net sales for the first quarter of fiscal 2021 and less than 3% in fiscal 2020.

Along with our stores, we temporarily closed our online businesses due to the COVID-19 pandemic.

Net sales for TJX International decreased 31% for the second quarter and 42% for the first six months of fiscal 2021 compared to the same periods last year.

Open-only comp store sales were down 1% for both the second quarter and first six months of fiscal 2021.

E-commerce sales represented approximately 4% of TJX International’s net sales for the second quarter and first six months of fiscal 2021 and less than 3% for the second quarter and first six months of fiscal 2020.

Along with our stores, we temporarily closed our online businesses during the first six months of fiscal 2021, due to the COVID-19 pandemic.

Segment (Loss) / Profit

Segment loss was $(259) million for the first quarter of fiscal 2021, a decrease of $287 million, compared to a segment profit of $28 million for the same period last year.

The decrease was primarily driven by a reduction in sales due to the store closures and increased markdowns on merchandise that was primarily transitional, perishable or out of season.

Additionally, this decrease was partially offset by a reduction in payroll, incentive compensation accruals and other variable store expenses.

The reduction in payroll reflects approximately $46 million from government programs as described in the Impacts of the COVID-19 Pandemic section above.

Segment loss was $(131) million for the second quarter of fiscal 2021, a decrease of $181 million, compared to a segment profit of $50 million for the same period last year.

Segment loss was $(390) million for the six months ended August 1, 2020, a decrease of $469 million, compared to a segment profit of $79 million for the same period last year.

The decrease for the second quarter and first six months was primarily driven by a reduction in sales due to the temporary store closures.

In addition, the decrease for the first six months reflects increased markdowns on merchandise primarily taken in the first quarter of fiscal 2021 due to the COVID-19 pandemic.

The decline in segment profit was partially offset by a reduction in occupancy costs, store payroll while closed and lower advertising spend.

The reduction in payroll reflects approximately $40 million for the second quarter of fiscal 2021 and $86 million for the six months ended August 1, 2020 from government programs as described in the Impacts of the COVID-19 Pandemic section above.

GENERAL CORPORATE EXPENSE

Thirteen Weeks Ended

In millions May 2,

Thirteen Weeks Ended Twenty-Six Weeks Ended

In millions August 1,

2020 August 3,

2019 August 1,

2020 August 3,

General corporate expense $ 123 $ 129 $ 224 $ 250

2 unchanged sentences

The mark-to-market adjustment of our fuel hedges is included in cost of sales, including buying and occupancy costs.

The decrease in general corporate expense for the first quarter of fiscal 2021 was primarily driven by lower share-based compensation costs and incentive compensation accruals partially offset by the mark-to-market adjustment on the fuel hedge.

The decrease in general corporate expense for the second quarter was primarily driven by the mark-to-market adjustment on the fuel hedge partially offset by contributions to TJX's charitable foundations made during the quarter.

The decrease in general corporate expense for the first six months of fiscal 2021 was primarily driven by lower share-based compensation costs partially offset by contributions to TJX's charitable foundations made during the second quarter.

ANALYSIS OF FINANCIAL CONDITION

Liquidity and Capital Resources

As part of the actions we have taken, and are continuing to take, relating to the COVID-19 pandemic, as described in Impact of the COVID-19 Pandemic above and in Note B—Impact of the COVID-19 Pandemic of Notes to Consolidated Financial Statements, on March 20, 2020, we drew down $1 billion on our revolving credit facilities.

In addition, on April 1, 2020, TJX issued $4.0 billion aggregate principal amount of notes, and in May 2020, the Company amended its revolving credit facilities.

As part of the actions we have taken, and are continuing to take, relating to the COVID-19 pandemic, as described in Impact of the COVID-19 Pandemic above and in Note B—Impact of the COVID-19 Pandemic of Notes to Consolidated Financial Statements, in the first quarter of fiscal 2021, TJX issued $4.0 billion aggregate principal amount of notes, and in May 2020, the Company amended the covenant requirements under its revolving credit facilities.

In March 2020, we drew down $1.0 billion on our revolving credit facilities, and in the second quarter of fiscal 2021, the Company paid off these borrowings.

Subsequent to the fiscal quarter ending August 1, 2020, on August 10, 2020, the Company increased its borrowing capacity by entering into a new $500 million facility, making a total of $1.5 billion available to the Company under revolving credit facilities.

See Note J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements for additional details of these transactions.

The Company suspended its share repurchase program and does not anticipate repurchasing any stock for the remainder of fiscal 2021, did not declare a dividend for the first quarter of fiscal 2021 and at this time does not expect to declare a dividend in the second quarter.

The Company did not declare a dividend for the first half of fiscal 2021 and does not expect to declare a dividend in the third quarter of fiscal 2021.

The Company suspended its share repurchase program and does not anticipate repurchasing any stock for the remainder of fiscal 2021.

The Company also qualified for certain government programs in the U.S., U.K., Canada and other jurisdictions to support payroll and other operating costs.

The Company is also reducing spending more broadly across the Company, evaluating operating expenses and taking actions to reduce ongoing variable and discretionary spending and only incur critical operating and capital spending.

The Company also negotiated rent deferrals for a significant amount of our stores, with repayment at later dates, primarily in fiscal 2022.

Looking ahead, we have developed contingency plans to reduce costs further if the situation deteriorates.

The Company has also reduced and plans to continue to reduce spending more broadly across the Company, evaluating operating expenses and taking actions to reduce ongoing variable and discretionary spending and only incur critical operating and capital spending.

The Company has negotiated rent deferrals for a significant amount of our stores, with repayment at later dates, primarily in fiscal 2022.

The challenges posed by the COVID-19 pandemic on the Company's business are evolving rapidly.

Consequently, the Company will continue to evaluate its financial position in light of future developments, particularly those relating to the COVID-19 pandemic.

We believe that our existing cash, internally generated funds and our credit facilities, as amended and described in Note J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements will be sufficient to fund necessary operating cash requirements and capital expenditures for at least the next twelve months.

As of May 2, 2020, we held $4.3 billion in cash and no short-term investments.

We believe that our existing cash, internally generated funds and our credit facilities, as described in Note J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements will be sufficient to fund necessary operating cash requirements and capital expenditures for at least the next twelve months.

As of August 1, 2020, we held $6.6 billion in cash.

Approximately $1.4 billion of our cash was held by our foreign subsidiaries with $0.7 billion held in countries where we provisionally intend to indefinitely reinvest any undistributed earnings.

TJX 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 May 2, 2020.

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.

Operating Activities

Net cash used in operating activities resulted in net cash outflows of $3.2 billion for the three months ended May 2, 2020 and net cash inflows of $0.1 billion for the three months ended May 4, 2019.

The Company's operating cash flows for the three months ended May 2, 2020 decreased by $3.3 billion compared to the first three months of fiscal 2020.

Net cash provided by operating activities resulted in net cash inflows of $0.2 billion for the six months ended August 1, 2020 and $0.9 billion for the six months ended August 3, 2019.

The Company's operating cash flows for the six months ended August 1, 2020 decreased by $0.7 billion compared to the first six months of fiscal 2020.

The COVID-19 pandemic had a material impact on the Company's operating cash flows.

The loss of sales as a result of temporarily closing our stores and e-commerce businesses during the quarter resulted in a net loss of $0.9 billion for the first quarter of fiscal 2021 compared with net income of $0.7 billion in the first quarter of fiscal 2020.

The decrease in operating cash flows was also driven by a decrease in merchandise inventories, net of accounts payable of $1.2 billion and an increase in income taxes recoverable of $0.4 billion.

The decrease in merchandise inventories, net of accounts payable was driven by a reduction in accounts payable as the Company continued to pay for merchandise received.

The loss of sales as a result of temporarily closing our stores and e-commerce businesses resulted in a net loss of $1.1 billion for the first six months of fiscal 2021 compared with net income of $1.5 billion in the six months of fiscal 2020.

This decrease in cash flows was offset by the $1.4 billion favorable impact of a decrease in merchandise inventories, net of accounts payable and an increase in income taxes recoverable, accrued expenses and lease liabilities of $0.4 billion.

The favorable impact of the change in merchandise inventories, net of accounts payable was driven by lower inventory levels.

Investing Activities

Net cash used in investing activities resulted in net cash outflows of $0.2 billion for the three months ended May 2, 2020 and $0.3 billion for the three months ended May 4, 2019.

Net cash used in investing activities resulted in net cash outflows of $0.3 billion for the six months ended August 1, 2020 and $0.6 billion for the six months ended August 3, 2019.

The cash outflows for both periods were driven by capital expenditures.

Investing activities in the first three months of fiscal 2021 primarily reflected property additions for new stores, store improvements and renovations as well as investments in our offices and distribution centers, including buying and merchandising systems and other information systems.

Cash outflows for property additions were $0.2 billion for the first three months of fiscal 2021 and $0.3 billion for the first three months of fiscal 2020.

Investing activities in the first six months of fiscal 2021 primarily reflected property additions for new stores, store improvements and renovations as well as investments in our offices and distribution centers, including buying and merchandising systems and other information systems.

Cash outflows for property additions were $0.3 billion for the first six months of fiscal 2021 and $0.6 billion for the first six months of fiscal 2020.

In order to preserve liquidity throughout the COVID-19 pandemic, we have decreased new store openings to approximately 50 stores and paused most scheduled store remodels, thereby deferring a substantial amount of our previously planned fiscal 2021 capital expenditures.

Our expected fiscal 2021 capital investments total $0.4 billion to $0.6 billion, of which $150 million was incurred in February and March 2020 before the Company began taking steps to mitigate the impact of the COVID-19 pandemic.

Planned investments for the remainder of the year are limited to those critical to our operations.

Our expected fiscal 2021 capital investments total $0.6 billion to $0.8 billion.

Planned investments for the remainder of the year are limited to those critical to our operations, primarily investing in our distribution centers and systems.

Financing Activities

Net cash provided by financing activities resulted in net cash inflows of $4.5 billion in the first three months of fiscal 2021 and net cash outflows of $0.6 billion for the three months ended May 4, 2019.

The cash inflows in the first three months of fiscal 2021 were a result of drawing down $1.0 billion on our previously undrawn revolving credit facilities on March 20, 2020.

In addition, o n April 1, 2020, the Company completed the issuance and sale of (a) $1.25 billion aggregate principal amount of 3.50% notes due 2025, (b) $750 million aggregate principal amount of 3.75% notes due 2027, (c) $1.25 billion aggregate principal amount of 3.875% notes due 2030 and (d) $750 million aggregate principal amount of 4.50% notes due 2050, all of which was outstanding at May 2, 2020.

Net cash provided by (used in) financing activities resulted in net cash inflows of $3.5 billion in the first six months of fiscal 2021 and net cash outflows of $1.1 billion for the six months ended August 3, 2019.

The cash inflows in the first six months of fiscal 2021 were a result of completing the issuance and sale of (a) $1.25 billion aggregate principal amount of 3.50% notes due 2025, (b) $750 million aggregate principal amount of 3.75% notes due 2027, (c) $1.25 billion aggregate principal amount of 3.875% notes due 2030 and (d) $750 million aggregate principal amount of 4.50% notes due 2050, all of which were outstanding at August 1, 2020.

In addition, in the first quarter of fiscal 2021 we drew down $1.0 billion on our previously undrawn revolving credit facilities, which were paid off in full during the second quarter of fiscal 2021.

Subsequent to the fiscal quarter ending August 1, 2020, on August 10, 2020, the Company increased its borrowing capacity under revolving credit facilities by entering into a new $500 million 364 Day Revolving Credit Facility, maturing in August 2021.

With the new revolving credit facility, the Company has increased its borrowing capacity to $1.5 billion, all of which currently remains available to the Company.

See Note J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements for additional information.

Under our stock repurchase programs, we paid $0.2 billion to repurchase and retire 3.4 million shares of our stock on a settlement basis in the first three months of fiscal 2021.

These outflows were partially offset by proceeds from the exercise of employee stock options, net of shares withheld for taxes in the first three months of fiscal 2021.

We paid $0.4 billion to repurchase and retire 7.7 million shares on a settlement basis in the first three months of fiscal 2020.

Under our stock repurchase programs, during the first quarter of fiscal 2021, we paid $0.2 billion to repurchase and subsequently retired 3.4 million shares of our stock on a settlement basis.

These outflows were partially offset by proceeds from the exercise of employee stock options, net of shares withheld for taxes in the first six months of fiscal 2021.

We paid $0.7 billion to repurchase and subsequently retired 13.3 million shares on a settlement basis in the first six months of fiscal 2020.

For further information regarding equity repurchases, see Note E—Capital Stock and (Loss) Earnings Per Share of Notes to Consolidated Financial Statements.

In February 2020, TJX announced that its Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $1.5 billion of TJX common stock from time to time.

In March 2020, in connection with the actions taken related to the COVID-19 pandemic as described in Impact of the COVID-19 Pandemic above and in Note B—Impact of the COVID-19 Pandemic of Notes to Consolidated Financial Statements, the Company suspended its share repurchase program.

In March 2020, prior to the declaration of the COVID-19 pandemic, we paid our fourth quarter fiscal 2020 quarterly dividend which totaled $0.3 billion.

As a result of the uncertainty surrounding the COVID-19 pandemic, the Company did not declare a dividend for the first quarter of 2021 and does not expect to declare a dividend in the second quarter of 2021 at this time.

As a result of the uncertainty surrounding the COVID-19 pandemic, the Company did not declare a dividend for the first or second quarter of fiscal 2021 and does not anticipate declaring a dividend in the third quarter of fiscal 2021.

The Company is committed to resuming dividend payments whenever the environment and its business stabilize for the long term.

We declared quarterly dividends on our common stock which totaled $0.23 per share in the first three months of fiscal 2020.

Cash payments for dividends on our common stock totaled $0.3 billion for the first three months of fiscal 2021 and $0.2 billion for the first three months of fiscal 2020.

We declared quarterly dividends on our common stock wh ich totaled $0.46 per share in the first six months of fiscal 2020.

Cash payments for dividends on our common stock totaled $0.3 billion for the first six months of fiscal 2021 and $0.5 billion for the first six months of fiscal 2020.

Contractual Obligations

Changes to our aggregate indebtedness, including related interest and terms for new issuances, are described in Note J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements.

During the first quarter of fiscal 2021, we negotiated rent deferrals for a significant number of our stores, with repayments to later dates, primarily in fiscal 2022.

In addition, approximately $1.0 billion of obligations under purchase orders for merchandise were cancelled.

During the first half of fiscal 2021, we negotiated rent deferrals for a significant number of our stores, with repayments to later dates, primarily in fiscal 2022.

In addition, approximately $1.0 billion of obligations under purchase orders for merchandise were cancelled in the first quarter of fiscal 2021.

As our stores reopened during the second quarter of fiscal 2021, we resumed placing orders for merchandise.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

9 unchanged sentences

economic conditions and consumer spending;

the ongoing COVID-19 pandemic and associated containment and remediation efforts;

the ongoing COVID-19 global pandemic and associated containment and remediation efforts;

labor costs and workforce challenges;

20 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis