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Item 7. Management’s Discussion and Analysis

2025-04-02 compared with 2024-04-03 · 99 added, 101 removed, 265 unchanged (43% of the section changed)

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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 discussion that follows relates to our 52-week fiscal year ended February 1, 2025 (fiscal 2025) and our 53-week fiscal year ended February 3, 2024 (fiscal 2024) and our 52-week fiscal year ended January 31, 2026 (fiscal 2026).

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

Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our annual report on Form 10-K for the fiscal year ended January 28, 2023.

Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our annual report on Form 10-K for the fiscal year ended February 3, 2024.

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

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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 six e-commerce sites.

We operate over 4,900 stores through our four main segments:

We operate over 5,000 stores through our fou r segments:

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

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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.

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

The results of Sierra are included in the Marmaxx segment.

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– Net sales increased 4% to $56.4 billion for fiscal 2025 versus $54.2 billion for fiscal 2024.

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

As of February 1, 2025, the number of stores in operation increased approximately 3% and selling square footage increased approximately 2% compared to the end of fiscal 2024.

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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.

– Diluted earnings per share were $4.26 for fiscal 2025, compared to $3.86 for fiscal 2024, which included an estimated benefit of $0.10 from the 53rd week in fiscal 2024.

– Pre-tax profit margin (the ratio of pre-tax income to net sales) for fiscal 2025 was 11.5%.

This was a 0.5 percentage point increase compared to 11.0% for fiscal 2024, which included an estimated 0.1 percentage point benefit from the 53rd week in fiscal 2024.

– Our cost of sales, including buying and occupancy costs, ratio for fiscal 2025 was 69.4%, a 0.6 percentage point decrease compared to 70.0% for fiscal 2024.

– Our selling, general and administrative (“SG&A”) expense ratio for fiscal 2025 was 19.4%, a 0.1 percentage point increase compared to 19.3% for fiscal 2024.

– 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.

– 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% at the end of fiscal 2025 as compared to the prior year.

– During fiscal 2025, we returned $4.1 billion to our shareholders through share repurchases and dividends.

A dividend of $0.375 per share was declared in the fourth quarter of fiscal 2025 and paid in March 2025.

– We announced that we plan to enter Spain with our TK Maxx banner in fiscal 2027.

Equity Investments

During fiscal 2025, we entered into a definitive agreement for a joint venture with Grupo Axo, S.A.P.I de C.V.

(“Axo”) to hold a 49% ownership stake in Multibrand Outlet Stores S.A.P.I.

(“MOS”) which operates off-price, physical store businesses in Mexico and includes a total of over 200 stores for its Promoda, Reduced, and Urban Store banners.

We have the option to increase our ownership interest in the joint venture over the long term.

During the third quarter of fiscal 2025, we completed this investment for $193 million, which includes a purchase price of $179 million and acquisition costs of $14 million.

This investment is accounted for under the equity method of accounting.

During fiscal 2025, we entered into a definitive agreement to acquire a 35% ownership stake in privately held Brands for Less (“BFL”), representing a non-controlling, minority position.

BFL currently operates over 100 stores, primarily in the UAE and Saudi Arabia, as well as an e-commerce business, and is the region’s only major off-price branded apparel, toys and home fashions retailer.

During the fourth quarter of fiscal 2025, we completed this investment for $358 million, which includes a purchase price of $344 million and acquisition costs of $14 million.

This investment is accounted for under the equity method of accounting.

The results of our share of both of these investments are recorded on a one-quarter lag as their results are not expected to be available in time to be recorded in the concurrent period.

These investments did not have a material impact on our fiscal 2025 results and we do not expect them to have a material impact on our fiscal 2026 results.

Recent Events and Trends

Global Economic Conditions and Industry Trends

We continue to closely monitor changes in international trade relations, economic and monetary policies, or legislation and regulations including those related to tariffs on imports from China and other countries, which could adversely impact the global economy and our operating results.

In particular, uncertainty remains regarding the potential impact on our direct imports, (with typically less than 10% of the merchandise that we purchase for our U.S.

businesses directly imported from China), vendor and competitor pricing, consumer demand, tariff pass-throughs, and reciprocal or retaliatory tariffs.

Operating Results as a Percentage of Net Sales

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Selling, general and administrative expenses 19.4 19.3

Impairment on equity investment — 0.4

Interest (income) expense, net (0.3) (0.3)

Income before income taxes *

11.5 % 11.0 %

* Figures may not foot due to rounding.

Net sales for fiscal 2025 totaled $56.4 billion, a 4% increase versus net sales of $54.2 billion for fiscal 2024.

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.

The increase includes a 4% increase in comp store sales, a 2% increase from non-comp store sales, a neutral impact from foreign currency exchange rates, partially offset by a negative 2% estimated year-over-year impact from the 53rd week in fiscal 2024.

Net sales from our e-commerce sites combined amounted to less than 2% of total sales for both fiscal 2025 and fiscal 2024.

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, 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 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 increased 4% for fiscal 2025 and increased 5% for fiscal 2024.

Comp store sales for fiscal 2025 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.

Both home comp store sales growth (as defined below) and apparel comp store sales growth (as defined below) generally performed in line with the overall comp store sales increase for fiscal 2025.

As of February 1, 2025, our store count increased approximately 3% and selling square footage increased approximately 2% compared to the same period last year.

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We define comparable store sales, or comp store sales, to be sales of stores that have been in operation for all or a portion of two consecutive fiscal years, or, in other words, stores that are starting their third fiscal year of operation.

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

In any given fiscal year, 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 store sales percentage is immaterial.

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

– Sales from our e-commerce sites

– Sales from our e-commerce sites (starting with the first quarter of fiscal 2026, we will no longer exclude sales from our e-commerce sites from comp store sales, which we do not expect to have a material impact on such figures).

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

Comp store sales of our foreign segments are calculated by translating the current year’s comp store sales using the prior year’s exchange rates.

This removes the effect of changes in currency exchange rates, which we believe is a more accurate measure of segment operating performance.

Comp store sales of our foreign segments are calculated on a constant currency basis.

We define constant currency basis as translating the current year’s results using the prior year’s exchange rates.

This removes the effect of changes in currency exchange rates, which we believe is a more appropriate measure of performance.

Comp store sales may be referred to as “same store” sales by other retail companies.

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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 customer transactions to be the number of transactions in stores included in the comp store sales calculation.

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

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Cost of sales, including buying and occupancy costs, as a percentage of net sales was 69.4% for fiscal 2025, a decrease of 0.6 percentage points compared to 70.0% of net sales for fiscal 2024.

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.

The decrease in the cost of sales ratio, including buying and occupancy costs, was attributable to higher merchandise margin due to higher markon, lower freight costs and lower inventory shrink expense, partially offset by higher supply chain costs.

Selling, General and Administrative Expenses

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

During fiscal 2023, we announced and completed the divestiture of our minority investment in Familia.

As a result, we recorded an impairment charge of $218 million in the first quarter of fiscal 2023 representing the entire carrying value of the investment.

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

SG&A expenses, as a percentage of net sales, was 19.4% for fiscal 2025, an increase of 0.1 percentage points compared to 19.3% for fiscal 2024.

The increase in SG&A ratio for fiscal 2025 was due to incremental store wage and payroll costs, partially offset by a favorable year-over-year impact from a prior year reserve related to a German COVID program receivable and the year-over-year benefit from closing HomeGoods’ e-commerce business last year.

Interest (Income) Expense, net

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In millions February 1,

2024 January 28,

2025 February 3,

Interest expense $ 78 $ 82

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Interest (income) expense, net $ (181) $ (170)

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.

Interest (income) expense, net increased for fiscal 2025 compared to fiscal 2024 due to an increase in interest income driven by a higher average cash balance.

Provision for Income Taxes

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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.

These rules did not have a material impact on our financial statements for fiscal 2025 and did not materially increase our global tax costs on our fiscal 2025 financial statements.

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 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 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.

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 in which we operate.

The effective income tax rate was 25.0% for fiscal 2025 and fiscal 2024.

There were no significant changes to our effective income tax rate for fiscal 2025, compared to fiscal 2024.

Net Income and Diluted Earnings Per Share

Net income was $4.9 billion in fiscal 2025 compared to $4.5 billion in fiscal 2024.

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

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.

Diluted earnings per share in fiscal 2025 were $4.26 compared to $3.86 in fiscal 2024, which included an estimated benefit of $0.10 per share from the 53rd week in fiscal 2024.

Foreign currency had a $0.01 positive impact on diluted earnings per share in fiscal 2025 compared to a neutral impact on diluted earnings per share in fiscal 2024.

Segment Information

We operate four main business segments.

We operate four segments.

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.

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

The results of Sierra are included in the Marmaxx segment.

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

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

Presented below is selected financial information related to our segments.

Fiscal Year Ended

dollars in millions February 1,

2024 January 28,

2025 February 3,

Net sales $ 34,604 $ 33,413

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Marshalls 1,230 1,197

Sierra 117 95

Total 2,680 2,611

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Net sales for Marmaxx were $34.6 billion for fiscal 2025, an increase of 4% compared to $33.4 billion for fiscal 2024.

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 net sales reflects a 4% increase from comp store sales and a 2% increase from non-comp store sales, partially offset by a negative 2% estimated year-over-year impact of the 53rd week in fiscal 2024.

The increase in comp store sales for fiscal 2025 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.

While both Marmaxx home and apparel comp store sales growth were positive, home comp store sales growth outperformed apparel comp store sales growth for fiscal 2025.

Geographically, comp store sales growth was positive across all regions.

Segment Profit Margin

Segment profit margin increased to 14.1% for fiscal 2025 compared to a segment profit margin of 13.8% for fiscal 2024.

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.

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

Merchandise margin reflects higher markon and lower inventory shrink expense.

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 2025 and fiscal 2024, and did not have a significant impact on year-over-year segment margin comparisons.

In fiscal 2025, we expect to add approximately 45 Marmaxx net new stores and 26 new Sierra stores, which would increase selling square footage by approximately 2%.

In fiscal 2026, we expect to open 40 Marmaxx net new stores and approximately 20 new Sierra stores, which would increase selling square footage by approximately 2%.

Fiscal Year Ended

dollars in millions February 1,

2024 January 28,

2025 February 3,

Net sales $ 9,386 $ 8,990

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Net sales for HomeGoods were $9.4 billion for fiscal 2025, an increase of 4%, compared to $9.0 billion for fiscal 2024.

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 2025 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.

Geographically, comp store sales growth was strongest in the West and Midwest regions.

Segment Profit Margin

Segment profit margin increased to 10.9% for fiscal 2025 compared to a segment profit margin of 9.6% for fiscal 2024.

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.

The increase in segment profit margin for fiscal 2025 was primarily driven by higher merchandise margin and the year-over-year benefit from closing HomeGoods’ e-commerce business last year, partially offset by incremental store wage and payroll costs.

Merchandise margin reflects lower freight costs and higher markon.

In fiscal 2026, we expect to open 30 new HomeGoods stores, of which 9 are expected to be Homesense stores.

This would increase selling square footage by approximately 3%.

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dollars in millions February 1,

2024 January 28,

2025 February 3,

Net sales $ 5,189 $ 5,046

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Segment profit margin 13.5 % 14.2 %

Comp store sales (a)

Comp store sales

Stores in operation at end of period:

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Marshalls 2 2

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

Net sales for TJX Canada were $5.2 billion for fiscal 2025, an increase of 3% compared to $5.0 billion for fiscal 2024.

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.

The increase in net sales reflects a 5% increase in comp store sales and a 2% increase in non-comp store sales, partially offset by a negative foreign currency exchange rate impact of 2% and a negative 2% estimated year-over-year impact of the 53rd week in fiscal 2024.

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

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 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%.

Segment profit margin decreased to 13.5% for fiscal 2025 compared to a segment profit margin of 14.2% for fiscal 2024.

The decrease for fiscal 2025 was primarily driven by incremental store wage and payroll costs, third-party supply chain exit costs this year, and the unfavorable year-over-year impact related to an insurance claim recovery last year.

In fiscal 2026, we expect to open 12 new stores in Canada, which would increase selling square footage by approximately 2%.

TJX International

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dollars in millions February 1,

2024 January 28,

2025 February 3,

Net sales $ 7,181 $ 6,768

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Segment profit margin 5.9 % 4.9 %

Comp store sales (a)

Comp store sales

Stores in operation at end of period:

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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 $7.2 billion for fiscal 2025, an increase of 6% compared to $6.8 billion for fiscal 2024.

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 net sales reflects a 4% increase in comp store sales, a 3% increase from non-comp store sales and a positive foreign currency exchange rate impact of 1%, partially offset by a negative 2% estimated year-over-year impact of the 53rd week in fiscal 2024.

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.

E-commerce sales represented less than 4% of TJX International’s net sales for both fiscal 2025 and fiscal 2024.

Segment Profit Margin

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%.

Segment profit margin increased to 5.9% for fiscal 2025 compared to a segment profit margin of 4.9% for fiscal 2024.

This increase was due to higher merchandise margin, a favorable year-over-year impact from a prior year reserve related to a German COVID program receivable, partially offset by incremental store wage costs.

Merchandise margin reflects higher markon and lower markdowns.

In fiscal 2026, we expect to open 22 net new stores in Europe and 6 new stores in Australia, which would increase selling square footage by approximately 3%.

GENERAL CORPORATE EXPENSE

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In millions February 1,

2024 January 28,

2025 February 3,

General corporate expense $ 739 $ 708

General corporate expense for segment reporting purposes represents those costs not specifically related to the operations of our business segments.

General corporate expense for segment reporting purposes represents those costs not specifically related to the operations of our segments.

General corporate expenses are primarily included in SG&A expenses.

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

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

charitable foundation.

The increase in general corporate expense for fiscal 2025 was primarily driven by other administrative costs and share-based compensation costs, partially offset by the favorable year-over-year impacts related to the mark-to-market adjustments on inventory hedges.

ANALYSIS OF FINANCIAL CONDITION

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We monitor debt financing markets on an ongoing basis and from time to time may incur additional long-term indebtedness depending on prevailing market conditions, liquidity requirements, existing economic conditions and other factors.

In fiscal 2024, we have used, and in the future we may continue to use, operating cash flow and cash on hand to repay portions of our indebtedness, depending on prevailing market conditions, liquidity requirements, existing economic conditions, contractual restrictions and other factors.

Periodically, we have used, and in the future we may again 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.

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Operating Activities

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 $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.

Net cash provided by operating activities was $6.1 billion in both fiscal 2025 and fiscal 2024.

Our operating cash flows increased by $59 million compared to fiscal 2024 primarily due to a $390 million increase in net income, partially offset by a $215 million decrease in accrued expenses reflecting lower incentive compensation costs.

Investing Activities

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

In addition, fiscal 2025 cash outflows include the purchase of our equity method investments related to our joint venture with Grupo Axo and a minority ownership position in BFL.

Net cash used in investing activities include capital expenditures for the last two fiscal years as set forth in the table below:

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In millions February 1,

2024 January 28,

2025 February 3,

New stores $ 176 $ 153

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$ 1,918 $ 1,722

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 expect our capital expenditures in fiscal 2026 will be in the range of approximately $2.1 billion to $2.2 billion, including approximat ely $1.0 billion to $1.1 billion for our offices and distribution centers (including information technology systems) to support growth, approximatel y $0.9 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.

During fiscal 2025, we entered into a definitive agreement for a joint venture with Axo to hold a 49% ownership stake in MOS, Axo’s off-price, physical store business in Mexico.

We have the option to increase our ownership interest in the joint venture over the long term.

During the third quarter of fiscal 2025, we completed this investment for $193 million, which includes a purchase price of $179 million and acquisition costs of $14 million.

We and Axo both expect to make additional future investments in the joint venture to support the expected growth of the business.

During fiscal 2025, we entered into a definitive agreement to make an investment for a 35% ownership stake in privately held BFL, representing a non-controlling, minority position.

During the fourth quarter of fiscal 2025, we completed this investment for $358 million, which includes a purchase price of $344 million and acquisition costs of $14 million.

We funded these expenditures and investments with our existing cash balances and through internally generated funds.

Financing Activities

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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.

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.

For further information regarding long-term debt, see Note J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements.

Under our stock repurchase program, we paid $2.5 billion to repurchase and retire 22.3 million shares of our stock in fiscal 2025.

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

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 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 which totaled $1.50 per share in fiscal 2025 and $1.33 per share in fiscal 2024.

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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