What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-04-03 compared with 2023-03-29 · 138 added, 149 removed, 228 unchanged (56% of the section changed)

1 unchanged sentence

TJX provides projections and other forward-looking statements in the following discussions particularly relating to our future financial performance.

These forward-looking statements are estimates based on information currently available to us, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and subject to the cautionary statements set forth on page 2 of this Form 10-K.

Our results are subject to risks and uncertainties including, but not limited to, those described in Part I, Item 1A, Risk Factors, and those identified from time to time in our other filings with the Securities and Exchange Commission.

TJX undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

The discussion that follows relates to our 52-week fiscal years ended January 28, 2023 (fiscal 2023) and January 29, 2022 (fiscal 2022) and our 53-week fiscal year ended February 3, 2024 (fiscal 2024).

These forward-looking statements are estimates based on information currently available to us and subject to the cautionary statements set forth on page 2 of this Form 10-K.

Our results are subject to risks, uncertainties and potentially inaccurate assumptions that could cause actual results to differ materially from those expressed or implied by any such forward-looking statements.

Applicable risks and uncertainties include, among others, those described in Part I, Item 1A, Risk Factors, as well as other information we file with the SEC.

TJX undertakes no obligation to update or revise any 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.

The discussion that follows relates to our 53-week fiscal year ended February 3, 2024 (fiscal 2024) and our 52-week fiscal years ended January 28, 2023 (fiscal 2023) and February 1, 2025 (fiscal 2025).

The following is a discussion of our consolidated operating results, followed by a discussion of our segment operating results.

3 unchanged sentences

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 five distinctive branded e-commerce sites.

We operate over 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);

in the U.S., Marmaxx (which operates TJ Maxx, Marshalls, tjmaxx.com and marshalls.com) and HomeGoods (which operates HomeGoods, and Homesense);

TJX Canada (which operates Winners, HomeSense and Marshalls in Canada);

and TJX International (which operates T.K.

Maxx, Homesense and tkmaxx.com in Europe, and T.K.

Maxx in Australia).

and TJX International (which operates TK Maxx, Homesense, tkmaxx.com, tkmaxx.de, and tkmaxx.at in Europe, and TK Maxx in Australia).

In addition to our four main segments, Sierra operates retail stores and sierra.com in the U.S.

3 unchanged sentences

– Net sales increased 9% to $54.2 billion for fiscal 2024 versus $49.9 billion for fiscal 2023.

As of January 28, 2023, both the number of stores in operation and selling square footage increased approximately 3% compared to the end of fiscal 2022.

comp store sales were flat in fiscal 2023.

open-only comp store sales increased 17% for fiscal 2022.

See Net Sales below for definitions of both U.S.

comp store sales and U.S.

open-only comp store sales.

– Net sales increased 13% for TJX Canada and increased 8% for TJX International in fiscal 2023.

On a constant currency basis, net sales increased 18% for TJX Canada and increased 22% for TJX International.

– Diluted earnings per share were $2.97 for fiscal 2023, which included a $0.14 net of tax charge related to the write-down and the divestiture of our minority investment in Familia, compared to $2.70 for fiscal 2022, which included a debt extinguishment charge of $0.15 per share.

– Pre-tax margin (the ratio of pre-tax income to net sales) for fiscal 2023 was 9.3%, which included a 0.4 percentage point charge related to the write-down of our minority investment in Familia.

This was a 0.2 percentage point increase compared to 9.1% for fiscal 2022, which included a 0.5 percentage point debt extinguishment charge.

– Our cost of sales, including buying and occupancy costs, ratio for fiscal 2023 was 72.4%, a 0.9 percentage point increase compared to 71.5% for fiscal 2022.

– Our selling, general and administrative (“SG&A”) expense ratio for fiscal 2023 was 17.9%, a 0.8 percentage point decrease compared to 18.7% for fiscal 2022.

– 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 up 1% on a reported basis and up 2% on a constant currency basis at the end of fiscal 2023 as compared to the prior year.

The 53rd week in fiscal 2024 increased net sales by an estimated 2%.

As of February 3, 2024, the number of stores in operation increased approximately 2% and selling square footage increased approximately 3% compared to the end of fiscal 2023.

– Consolidated comp store sales increased 5% in fiscal 2024.

See Net Sales below for the definition of comp store sales.

– Diluted earnings per share were $3.86 for fiscal 2024, which included an estimated benefit of $0.10 from the 53rd week in fiscal 2024, compared to $2.97 for fiscal 2023, which included a $0.14 net of tax charge related to the write-down and the divestiture of our minority investment in Familia.

– Pre-tax profit margin (the ratio of pre-tax income to net sales) for fiscal 2024 was 11.0%, which included an estimated 0.1 percentage point benefit from the 53rd week in fiscal 2024.

This was a 1.7 percentage point increase compared to 9.3% for fiscal 2023, which included a 0.4 percentage point charge related to the write-down of our minority investment in Familia.

– Our cost of sales, including buying and occupancy costs, ratio for fiscal 2024 was 70.0%, a 2.4 percentage point decrease compared to 72.4% for fiscal 2023.

– Our selling, general and administrative (“SG&A”) expense ratio for fiscal 2024 was 19.3%, a 1.4 percentage point increase compared to 17.9% for 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 up 1% on both a reported basis and constant currency basis at the end of fiscal 2024 as compared to the prior year.

– During fiscal 2024, we returned $4.0 billion to our shareholders through share repurchases and dividends.

8 unchanged sentences

Impairment on equity investment — 0.4

Loss on early extinguishment of debt — 0.5

Interest expense, net 0.0 0.2

Interest (income) expense, net (0.3) 0.0

Income before income taxes 11.0 % 9.3 %

* Figures may not foot due to rounding.

Net sales for fiscal 2024 totaled $54.2 billion, a 9% increase versus net sales of $49.9 billion for fiscal 2023.

The increase includes a 5% increase in non-comp store sales, partially offset by a 2% negative impact from foreign currency exchange rates.

The non-comp store sales increase reflects a fully open store base for fiscal 2023 compared to temporary store closures in fiscal 2022.

Net sales from our e-commerce sites combined amounted to less than 3% of total sales for each of fiscal 2023 and fiscal 2022.

For fiscal 2023, we returned to our historical definition of comparable store sales (as defined below).

The increase includes a 5% increase in comp store sales, a 2% increase from the estimated impact of the 53rd week in fiscal 2024, a 2% increase from non-comp store sales and a neutral impact from foreign currency exchange rates.

Net sales from our e-commerce sites combined amounted to less than 2% of total sales for both fiscal 2024 and fiscal 2023.

For fiscal 2023 and fiscal 2024, 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, we cannot 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 consist of U.S.

stores only, which we refer to as U.S.

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, for clarity, we referred to as U.S.

comparable store sales (“U.S.

comp store sales”), and are calculated against sales for the comparable periods in fiscal 2022.

We expect all geographies to return to the historical definition of comparable store sales in fiscal 2024.

comp store sales were flat for fiscal 2023 compared to a 17% U.S.

open-only comp store sales (as defined below) increase for fiscal 2022.

comp store sales for fiscal 2023 reflect an increase in average basket driven by higher average ticket offset by a decrease in customer traffic.

Strong apparel sales offset a decline in home fashions sales for fiscal 2023.

As of January 28, 2023, our store count increased 3% and selling square footage increased 3% compared to the same period last year.

comp store sales”), and were calculated against sales for the comparable period in fiscal 2022.

Comp store sales increased 5% for fiscal 2024.

comp store sales were flat for fiscal 2023.

Comp store sales for fiscal 2024 was driven by an increase in customer transactions.

Apparel comp store sales growth (as defined below) outperformed home comp store sales growth (as defined below) for fiscal 2024.

As of February 3, 2024, our store count increased approximately 2% and selling square footage increased approximately 3% compared to the same period last year.

Definition of Comparable Store Sales

1 unchanged sentence

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:

6 unchanged sentences

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.

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.

Open-Only Comp Store Sales

Due to the temporary closing of stores as a result of the COVID-19 pandemic, our historical definition of comp store sales was not applicable for fiscal 2022.

In order to provide a performance indicator for its stores, during fiscal 2022, we temporarily reported open-only comp store sales.

Open-only comp store sales included stores initially classified as comp stores at the beginning of fiscal 2021.

This measure reported the sales increase or decrease of these stores for the days the stores were open in fiscal 2022 against sales for the same days in fiscal 2020, prior to the emergence of the global pandemic.

open-only comp store sales reports the open-only comp store sales for our Marmaxx and HomeGoods segments.

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 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.

Historically, we defined customer traffic to be the number of transactions in stores included in the comp store sales calculation;

going forward we refer to this as customer transactions.

We define average ticket to be the average retail price of the units sold.

We define average basket to be the average dollar value of transactions.

Revenues by Geography

16 unchanged sentences

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.

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 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.

3 unchanged sentences

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.

In subsequent periods, the income statement impact of the mark-to-market adjustment is effectively offset when the inventory being hedged is 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.

5 unchanged sentences

Cost of Sales, Including Buying and Occupancy Costs

Cost of sales, including buying and occupancy costs, as a percentage of net sales was 72.4% for fiscal 2023, an increase of 0.9 percentage points over 71.5% of net sales for fiscal 2022.

The increase in the total cost of sales, including buying and occupancy costs, was primarily attributable to lower merchandise margin and investments in supply chain.

Merchandise margin reflected approximately 1.2 percentage points of incremental freight costs as well as higher markdowns and shrink expense, partially offset by strong markon.

Cost of sales, including buying and occupancy costs, was favorably impacted by approximately $9 million and $27 million of government programs for fiscal 2023 and fiscal 2022, respectively, in regions where we had temporary store closures.

Cost of sales, including buying and occupancy costs, as a percentage of net sales was 70.0% for fiscal 2024, a decrease of 2.4 percentage points compared to 72.4% of net sales for fiscal 2023.

The decrease in the cost of sales ratio, including buying and occupancy costs, was primarily attributable to higher merchandise margin due to lower freight costs.

Selling, General and Administrative Expenses

SG&A expenses, as a percentage of net sales, were 17.9% for fiscal 2023, a decrease of 0.8 percentage points over 18.7% for fiscal 2022.

The decrease in SG&A ratio for fiscal 2023 was primarily driven by store payroll due to a reduction of COVID-related costs and lower share-based and incentive compensation costs, partially offset by higher store wages.

SG&A expense was favorably impacted by $214 million from government programs for fiscal 2022 in regions where we had temporary store closures.

SG&A expenses, as a percentage of net sales, were 19.3% for fiscal 2024, an increase of 1.4 percentage points compared to 17.9% for fiscal 2023.

The increase in SG&A ratio for fiscal 2024 was attributable to higher incentive compensation costs and incremental store wage and payroll costs.

In addition, this increase reflects a reserve related to a German government COVID program receivable, costs related to the closing of our HomeGoods e-commerce business and a contribution to our U.S.

charitable foundation.

Impairment on Equity Investment

2 unchanged sentences

Additionally, we realized a $54 million tax benefit when we completed the divestiture of this investment during the third quarter of fiscal 2023.

Interest Expense, net

The components of interest expense, net for the last two fiscal years are summarized below:

Interest (Income) Expense, net

The components of interest (income) expense, net for the last two fiscal years are summarized below:

Fiscal Year Ended

In millions January 28,

In millions February 3,

2024 January 28,

2 unchanged sentences

Interest (income) (249) (78)

Interest expense, net $ 6 $ 115

Net interest expense decreased for fiscal 2023 compared to fiscal 2022, primarily due to an increase in interest income, due to an increase in prevailing rates, as well as the $2.75 billion pay down of outstanding debt during fiscal 2022.

Interest (income) expense, net $ (170) $ 6

The change in interest (income) expense, net for fiscal 2024 compared to fiscal 2023 was due to an increase in interest income driven by an increase in prevailing rates and a higher average cash balance.

Provision for Income Taxes

In 2021, the Organization for Economic Co-operation and Development announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%.

Subsequently multiple sets of administrative guidance have been issued.

Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or announced their plans to enact legislation in future years.

Considering we do not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, these rules are not expected to materially increase our global tax costs.

There remains uncertainty as to the final Pillar Two model rules.

We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in.

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 repurchase portion of the IRA did not have an impact on our results of operations or financial position in fiscal 2023 and we do not expect the Corporate AMT, excise tax, or other provisions of the IRA to have a material impact on our consolidated financial statements.

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 in fiscal 2024 or fiscal 2023.

The effective income tax rate was 25.0% for fiscal 2024 compared to 24.5% for fiscal 2023.

The decrease in the fiscal 2023 effective income tax rate was primarily due to the lapse of statutes of limitations and resolution of various tax matters, and the change of jurisdictional mix of profits and losses, partially offset by a reduction of excess tax benefits from share-based compensation.

The increase in the fiscal 2024 effective income tax rate is primarily due to an increase of nondeductible items and a reduction of excess tax benefits from share-based compensation.

Net Income and Diluted Earnings Per Share

1 unchanged sentence

Diluted earnings per share in fiscal 2024 were $3.86 compared to $2.97 in fiscal 2023.

The $218 million impairment on our previously-held minority investment in Familia, net of the $54 million tax benefit, had a $0.14 negative impact on earnings per share for fiscal 2023.

Foreign currency had a $0.06 negative impact on earnings per share in fiscal 2023 compared to a neutral impact on earnings per share in fiscal 2022.

A $242 million debt extinguishment charge in fiscal 2022 had a $0.15 negative impact on earnings per share for fiscal 2022.

The 53rd week in fiscal 2024 provided an estimated benefit of $0.10 per share.

The $218 million impairment on our previously-held minority investment in Familia, net of the $54 million tax benefit, had a $0.14 negative impact on diluted earnings per share for fiscal 2023.

Foreign currency had a neutral impact on diluted earnings per share in fiscal 2024 compared to a 0.06 negative impact on diluted earnings per share in fiscal 2023.

Segment Information

We operate four main business segments.

Our Marmaxx segment (T.J.

Maxx, Marshalls, tjmaxx.com and marshalls.com) and our HomeGoods segment (HomeGoods, Homesense and homegoods.com) both operate in the United States.

Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates T.K.

Maxx, Homesense and tkmaxx.com in Europe and T.K.

Maxx in Australia.

In the United States, our Marmaxx segment operates TJ Maxx, Marshalls, tjmaxx.com and marshalls.com and our HomeGoods segment operates HomeGoods and Homesense.

Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates TK Maxx, Homesense, tkmaxx.com, tkmaxx.de, and tkmaxx.at in Europe and TK 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 expense, net, and certain separately disclosed unusual or infrequent items.

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.

3 unchanged sentences

Fiscal Year Ended

dollars in millions January 28,

dollars in millions February 3,

2024 January 28,

1 unchanged sentence

Segment profit $ 4,597 $ 3,883

Segment margin 12.7 % 12.9 %

Comp store sales (a)

Segment profit margin 13.8 % 12.7 %

Comp store sales

Stores in operation at end of period:

Maxx 1,299 1,284

TJ Maxx 1,319 1,299

Marshalls 1,197 1,183

1 unchanged sentence

Selling square footage at end of period (in millions):

TJ Maxx 29 28

Marshalls 27 27

(a) Comp store sales reported for fiscal 2023 and open-only comp store sales reported for fiscal 2022.

Net sales for Marmaxx were $33.4 billion for fiscal 2024, an increase of 9% compared to $30.5 billion for fiscal 2023.

The increase in net sales reflects a 3% increase from comp store sales and a 1% increase from non-comp store sales.

Comp sales growth at Marmaxx was primarily attributable to an increase in average basket driven by higher average ticket.

For fiscal 2023, positive apparel sales outperformed a decline in home fashion sales.

The increase in net sales reflects a 6% increase from comp store sales, a 2% increase from the estimated impact of the 53rd week and a 1% increase from non-comp store sales.

The increase in comp store sales for fiscal 2024 was driven by an increase in customer transactions.

For fiscal 2024, Marmaxx had strong home and apparel comp store sales growth.

All geographies generally performed in line with the overall comp store sales increase.

Segment Profit Margin

Segment profit margin decreased to 12.7% for fiscal 2023 compared to a segment profit margin of 12.9% for fiscal 2022.

The decrease in segment profit margin was driven by lower merchandise margin and higher store wages, partially offset by store payroll reflecting lower COVID-related expenses.

Within merchandise margin, incremental freight costs, higher markdowns and shrink expense were partially offset by strong markon.

Segment profit margin increased to 13.8% for fiscal 2024 compared to a segment profit margin of 12.7% for fiscal 2023.

The increase in segment profit margin was primarily driven by higher merchandise margin, partially offset by incremental store wage and payroll costs and higher incentive compensation costs.

Merchandise margin reflects lower freight costs and higher markon.

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

1 unchanged sentence

Fiscal Year Ended

dollars in millions January 28,

dollars in millions February 3,

2024 January 28,

1 unchanged sentence

Segment profit $ 861 $ 522

Segment margin 6.3 % 10.1 %

Comp store sales (a)

Segment profit margin 9.6 % 6.3 %

Comp store sales

Stores in operation at end of period:

5 unchanged sentences

Homesense 1 1

(a) Comp store sales reported for fiscal 2023 and open-only comp store sales reported for fiscal 2022.

Net sales for HomeGoods were $8.3 billion for fiscal 2023, a decrease of 8%, compared to $9.0 billion for fiscal 2022.

The decrease in net sales reflects an 11% decrease from comp store sales, partially offset by a 3% increase from non-comp store sales.

Comp store sales decline for HomeGoods for fiscal 2023 reflected a decrease in customer traffic, partially offset by an increase in average basket driven by higher average ticket.

All geographies performed in line with the overall comp store sales decline.

Net sales for HomeGoods were $9.0 billion for fiscal 2024, an increase of 9%, compared to $8.3 billion for fiscal 2023.

The increase in net sales reflects a 4% increase from non-comp store sales, a 3% increase from comp store sales and a 2% increase from the estimated impact of the 53rd week.

The increase in comp store sales for fiscal 2024 reflected an increase in customer transactions, partially offset by a decrease in average basket.

All geographies performed in line with the overall comp store sales increase.

Segment Profit Margin

Segment profit margin decreased to 6.3% for fiscal 2023 compared to a segment profit margin of 10.1% for fiscal 2022.

The decrease in segment profit margin for fiscal 2023 was driven by deleverage on lower comp store sales, primarily in occupancy and administrative costs, lower merchandise margin and higher store and distribution wages, partially offset by store payroll reflecting lower COVID-related expenses.

Merchandise margin included incremental freight costs of approximately 3 percentage points as well as higher markdowns, partially offset by strong markon.

Our HomeGoods e-commerce site, homegoods.com, represented less than 1% of HomeGoods net sales for fiscal 2023 and fiscal 2022, and did not have a significant impact on year-over-year segment margin comparisons.

In fiscal 2024, we expect to add up to approximately 50 HomeGoods stores, of which 18 are Homesense stores.

Segment profit margin increased to 9.6% for fiscal 2024 compared to a segment profit margin of 6.3% for fiscal 2023.

The increase in segment profit margin for fiscal 2024 was primarily driven by higher merchandise margin, due to lower freight costs, partially offset by incremental store wage and payroll costs, costs related to the closing of our HomeGoods e-commerce business and higher incentive compensation costs.

In the third quarter of fiscal 2024, we closed our HomeGoods e-commerce business on homegoods.com, which represented less than 1% of HomeGoods net sales for both fiscal 2024 and fiscal 2023.

In fiscal 2025, we expect to add approximately 40 HomeGoods stores, of which 17 are expected to be Homesense stores.

This would increase selling square footage by approximately 4%.

1 unchanged sentence

Fiscal Year Ended

dollars in millions January 28,

dollars in millions February 3,

2024 January 28,

1 unchanged sentence

Segment profit $ 715 $ 690

Segment margin 14.0 % 11.2 %

Segment profit margin 14.2 % 14.0 %

Comp store sales (a)

Stores in operation at end of period:

6 unchanged sentences

Marshalls 2 2

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

Net sales for TJX Canada were $5.0 billion for fiscal 2024, an increase of 3% compared to $4.9 billion for fiscal 2023.

The increase in net sales reflected having a fully open store base for fiscal 2023, compared to temporary store closures in fiscal 2022, as a result of the COVID-19 pandemic.

Within net sales, an increase in average basket driven by higher average ticket was partially offset by the negative foreign currency exchange rate impact of 5% for fiscal 2023.

The increase in net sales reflects a 3% increase in comp store sales, a 2% increase from the estimated impact of the 53rd week and a 1% increase in non-comp store sales, partially offset by a negative foreign currency exchange rate impact of 3%.

The increase in comp store sales was driven by an increase in customer transactions, partially offset by a decrease in average basket.

Segment Profit Margin

Segment profit margin increased to 14.2% for fiscal 2024 compared to a segment profit margin of 14.0% for fiscal 2023.

The increase for fiscal 2023 was primarily driven by leverage on increased sales, primarily in occupancy and administrative costs, and higher merchandise margin as well as lower store payroll reflecting lower COVID-related expenses, and lower incentive compensation costs.

Merchandise margin reflects strong markon partially offset by incremental freight costs for fiscal 2023.

The increase for fiscal 2024 was primarily driven by favorable supply chain costs and higher merchandise margin, partially offset by a prior year release of a COVID wage subsidy reserve, higher incentive compensation and administrative costs.

Merchandise margin reflects lower freight costs, partially offset by lower markon and higher markdowns.

In fiscal 2025, we expect to add approximately 10 stores in Canada, which would increase selling square footage by approximately 2%.

1 unchanged sentence

Fiscal Year Ended

dollars in millions January 28,

dollars in millions February 3,

2024 January 28,

1 unchanged sentence

Segment profit $ 332 $ 347

Segment margin 5.6 % 2.8 %

Segment profit margin 4.9 % 5.6 %

Comp store sales (a)

Stores in operation at end of period:

TK Maxx 644 629

Homesense 79 78

Maxx Australia 74 68

TK Maxx Australia 80 74

Total 803 781

Selling square footage at end of period (in millions):

TK Maxx 13 13

Homesense 1 1

Maxx Australia 1 1

TK Maxx Australia 1 1

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

Net sales for TJX International were $6.8 billion for fiscal 2024, an increase of 9% compared to $6.2 billion for fiscal 2023.

The increase in net sales reflects having a fully open store base, compared to temporary store closures in fiscal 2022 as a result of the COVID-19 pandemic, which was partially offset by the negative foreign currency exchange rate impact of 14%.

E-commerce sales at tkmaxx.com were approximately 3% and 5% of TJX International’s net sales for fiscal 2023 and fiscal 2022, respectively.

The increase in net sales reflects a 3% increase in comp store sales, a positive foreign currency exchange rate impact of 3%, a 2% increase from the estimated impact of the 53rd week and a 1% increase from non-comp store sales.

The increase in comp store sales was driven by an increase in customer transactions.

E-commerce sales were approximately 3% of TJX International’s net sales for both fiscal 2024 and fiscal 2023.

In addition to tkmaxx.com, during the second quarter of fiscal 2024, TJX International made online shopping available in Germany at tkmaxx.de and in Austria at tkmaxx.at.

Segment Profit Margin

Segment profit margin increased to 5.6% for fiscal 2023 compared to a segment profit margin of 2.8% for fiscal 2022.

This increase was primarily driven by leverage on increased sales, primarily in occupancy and administrative costs as well as higher merchandise margin, lower COVID-related expenses in stores and distribution centers and lower incentive compensation costs.

Within merchandise margin, strong markon was partially offset by incremental freight costs and higher markdowns.

Fiscal 2022 also reflected $157 million from government programs received in regions where we had temporary store closures.

Segment profit margin decreased to 4.9% for fiscal 2024 compared to a segment profit margin of 5.6% for fiscal 2023.

This decrease was due to a reserve related to a German government COVID program receivable, higher incentive compensation and administrative costs and incremental store wage, partially offset by higher merchandise margin.

Merchandise margin reflects lower freight costs and higher markon.

In fiscal 2025, we expect to add approximately 15 net new stores in Europe and approximately 5 net new stores in Australia, which would increase selling square footage by approximately 2%.

1 unchanged sentence

Fiscal Year Ended

In millions January 28,

In millions February 3,

2024 January 28,

3 unchanged sentences

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

The decrease in general corporate expense for fiscal 2023 was primarily driven by lower share-based and incentive compensation costs, timing of funding to TJX’s charitable foundations partially offset by the mark-to-market adjustment on fuel and inventory derivatives.

The increase in general corporate expense for fiscal 2024 was primarily driven by higher incentive and share-based compensation costs and a contribution to TJX’s U.S.

charitable foundation.

ANALYSIS OF FINANCIAL CONDITION

1 unchanged sentence

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 January 28, 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 had $1.5 billion available as of the period ended January 28, 2023, as described in Note J—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 January 28, 2023, we held $5.5 billion in cash.

Approximately $1.2 billion of our cash was held by our foreign subsidiaries with $0.7 billion 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 January 28, 2023.

As of February 3, 2024, 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 February 3, 2024, as described in Note J—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 February 3, 2024, we held $5.6 billion in cash.

Approximately $1.4 billion of our cash was held by our foreign subsidiaries with $804 million held in countries where we intend to indefinitely reinvest any undistributed earnings.

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 intend to use 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.

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.

2 unchanged sentences

Net cash provided by operating activities was $6.1 billion in fiscal 2024 and $4.1 billion in fiscal 2023.

Our operating cash flows increased by $1 billion compared to fiscal 2022 primarily due to the $1.5 billion change in merchandise inventories net of accounts payable.

The change in inventory was primarily driven by the fiscal 2022 rebuilding of inventory levels.

The increase in operating cash flows was partially offset by a $0.7 billion decrease in accrued expenses, the largest component of which was lower incentive compensation costs.

Our operating cash flows increased by $2 billion compared to fiscal 2023 primarily due to a $1 billion increase in net income, a $466 million increase in accrued expenses reflecting higher incentive compensation costs and a $461 million change in merchandise inventories net of accounts payable.

Investing Activities

3 unchanged sentences

Fiscal Year Ended

In millions January 28,

In millions February 3,

2024 January 28,

4 unchanged sentences

$ 1,722 $ 1,457

We expect our capital expenditures in fiscal 2024 will be in the range of approximately $1.7 billion to $1.9 billion, including approximat ely $0.9 billion to $1 billion for our offices and distribution centers (including buying and merchandising systems and other information systems) to support growth, approximately $0.6 billion to $0.7 billion for store renovations and approximatel y $0.2 billion for new stores.

We expect our capital expenditures in fiscal 2025 will be in the range of approximately $2.0 billion to $2.1 billion, including approximat ely $1.0 billion to $1.1 billion for our offices and distribution centers (including buying and merchandising systems and other information systems) to support growth, approximatel y $0.8 billion for store renovations and approximatel y $0.2 billion for new stores.

We plan to fund these expenditures with our existing cash balances and through internally generated funds.

1 unchanged sentence

Net cash used in financing activities resulted in net cash outflows of $4.2 billion in fiscal 2024 compared to net cash outflows of $3.3 billion in fiscal 2023.

In fiscal 2023 the cash outflows were primarily driven by equity repurchases and dividend payments.

In fiscal 2022 the cash outflows were primarily driven by equity repurchases, dividend payments and $3 billion of debt repayments.

The cash outflows in fiscal 2022 were due to the completion of make-whole calls and the redemption at par of certain of our notes.

Our 2.50% ten-year Notes due May 2023 will mature during the second quarter of fiscal 2024 and are included within our current maturities of long-term debt.

The cash outflows for both periods were primarily driven by equity repurchases and dividend payments.

Additionally, fiscal 2024 included a $500 million debt repayment upon maturity.

The cash outflows in 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.

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

Under our stock repurchase program, we paid $2.3 billion to repurchase and retire 34.9 million shares of our stock on a settlement basis in fiscal 2023.

We paid $2.2 billion to repurchase and retire 31.3 million shares of our stock on a settlement basis in fiscal 2022.

These outflows for both periods were partially offset by proceeds from the exercise of employee stock options of $0.3 billion in fiscal 2023 and $0.2 billion in fiscal 2022.

In February 2023, the Board of Directors announced a new stock repurchase program that authorizes the repurchase of up to an additional $2 billion of our common stock from time to time.

Under our stock repurchase program, we paid $2.5 billion to repurchase and retire 29.0 million shares of our stock in fiscal 2024.

We paid $2.3 billion to repurchase and retire 34.9 million shares of our stock in fiscal 2023.

In February 2024, we announced that our Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $2.5 billion of our common stock from time to time.

We currently plan to repurchase approximately $2 billion to $2.5 billion of stock under our stock repurchase programs in fiscal 2025.

1 unchanged sentence

The timing and amount of these purchases may change.

As of January 28, 2023, approximately $3.5 billion remained available under our existing stock repurchase programs.

As of February 3, 2024, approximately $3.5 billion remained available under our existing stock repurchase programs.

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.

Historically, during the year we have made discretionary share repurchases.

The IRA 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 an impact on our results of operations or financial position in fiscal 2023, and based on historical net repurchase activity, we do not expect it to have a material impact in future years.

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 in fiscal 2024 or fiscal 2023.

See Note K—Income Taxes of Notes to Consolidated Financial Statements for additional information.

We declared quarterly dividends on our common stock of $0.295 per share for each of the quarters in fiscal 2023 which totaled $1.18 per share in fiscal 2023.

We declared quarterly dividends on our common stock of $0.26 per share for each of the quarters in fiscal 2022, which totaled $1.04 per share in fiscal 2022.

Cash payments for dividends on our common stock totaled $1.3 billion for both fiscal 2023 and fiscal 2022.

We declared quarterly dividends on our common stock which totaled $1.33 per share in fiscal 2024 and $1.18 per share in fiscal 2023.

Cash payments for dividends on our common stock totaled $1.5 billion for fiscal 2024 and $1.3 billion for fiscal 2023.

We expect to pay quarterly dividends for fiscal 2025 of $0.375 per share, or an annual dividend of $1.50 per share, subject to the declaration and approval by our Board of Directors.

5 unchanged sentences

Operating lease liabilities exclude legally binding minimum lease payments for approximately 170 leases signed but not yet commenced and include options to extend lease terms that are now deemed reasonably certain of being exercised according to our Lease Accounting Policy.

The balances do not include variable costs for insurance, real estate taxes, other operating expenses and, in some cases, rentals based on a percentage of sales;

The balances do not include variable costs for insurance, real estate taxes, other operating expenses and, in some cases, rent payments based on a percentage of sales;

these items totaled approximately one-third of the total minimum rent for fiscal 2024.

6 unchanged sentences

Inventory Valuation

We use the retail method for valuing inventory for all our businesses except T.K.

Maxx in Australia.

We use the retail method for valuing inventory for all our businesses except TK Maxx in Australia.

The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as it has not been fully processed for sale (i.e.

22 unchanged sentences

RECENT ACCOUNTING PRONOUNCEMENTS

We do not expect any recently issued accounting pronouncements will have a material effect on our consolidated financial statements.

For a discussion of any new accounting pronouncements, see Note A—Basis of Presentation and Summary of Accounting Policies of Notes to Consolidated Financial Statements included in this annual report on Form 10-K, including the dates of adoption and estimated effects on our results of operations, financial position or cash flows.

We do not expect any other recently issued accounting pronouncements will have a material effect on our consolidated financial statements.

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-K

Item 7. Management’s Discussion and Analysis