The TJX Cos. (TJX) rang up a 6% increase in fiscal second quarter sales to $13.5 billion, with net income up 11% to $1.1 billion and EPS up 13% to $0.96. Comparable-store sales of 4% were entirely driven by customer transactions, which increased at every division, highlights Ingrid Hendershot, editor of Hendershot Investments.
Operating margin of 10.9% expanded by 0.5 percentage points, primarily due to a benefit from lower freight costs and stronger sales, partially offset by higher incentive compensation accruals and a contribution to the TJX Foundation.
The TJX Cos. (TJX)
By division, Marmaxx sales jumped 7% to $8.4 billion, HomeGoods sales increased 4% to $2.1 billion, TJX Canada expanded 2% to $1.2 billion, and TJX International sales rose 4% to $1.7 billion. TJX marked a milestone in the second quarter by opening its 5,000th store. Management sees a runway for 6,300 stores across its current banners and geographies.
During the second quarter, TJX generated $1.6 billion of operating cash flow, representing a fancy 146% of reported net income. During the first half of fiscal 2025, TJX generated $2.4 billion in operating cash flow and $1.4 billion in free cash flow, up 9% from last year. TJX’s robust cash flow and strong balance sheet enable it to invest in growing the business while returning significant cash to shareholders.
During the quarter, TJX signed a definitive agreement to make an investment of about $360 million for a 35% ownership stake in privately held Brands for Less (BFL). BFL is based in Dubai and is the region’s only major off-price branded apparel, toys, and home fashions retailer. BFL currently operates over 100 stores, primarily in the UAE and Saudi Arabia, as well as an e-commerce business. The transaction is expected to be slightly accretive to EPS in fiscal 2026.
During the quarter, TJX returned $982 million to shareholders through share repurchases of $559 million at an average cost per share of $109.61 per share and dividends of $423 million. During the first half of fiscal 2025, TJX returned a total of $1.9 billion to shareholders through share repurchases of $1.1 billion and dividends of $800 million.
TJX also continues to expect to repurchase approximately $2 billion to $2.5 billion of TJX stock during the fiscal year ending Feb. 1, 2025.
Recommended Action: Buy TJX.
