The TJX Cos., Inc. :TJX-US: Earnings Analysis: Q4, 2017 By the Numbers : February 28, 2017

The TJX Cos., Inc. reports financial results for the quarter ended January 31, 2017.

We analyze the earnings along side the following peers of The TJX Cos., Inc. – Gap, Inc. and Macy’s Inc (GPS-US and M-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 9,467.65 million, Net Earnings of USD 677.93 million.
  • Gross margins narrowed from 28.72% to 28.32% compared to the same period last year, operating (EBITDA) margins now 11.65% from 13.83%.
  • Year-on-year change in operating cash flow of 18.26% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings rose compared to same period last year, despite decline in operating and pretax margins.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2017-01-31 2016-10-31 2016-07-31 2016-04-30 2016-01-31
Relevant Numbers (Quarterly)
Revenues (mil) 9467.65 8291.69 7882.05 7542.36 8962.08
Revenue Growth (%YOY) 5.64 6.94 7.04 9.86 7.93
Earnings (mil) 677.93 549.79 562.17 508.35 666.47
Earnings Growth (%YOY) 1.72 -6.38 2.34 7.11 2.81
Net Margin (%) 7.16 6.63 7.13 6.74 7.44
EPS 1.03 0.83 0.84 0.76 0.99
Return on Equity (%) 61.35 50.09 50.05 45.99 61.58
Return on Assets (%) 21.1 17.92 19.24 17.53 22.7

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Market Share Versus Profits

Revenues History
Earnings History

TJX-US‘s change in revenue this period compared to the same period last year of 5.64% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that TJX-US is holding onto its market share. Also, for comparison purposes, revenues changed by 14.18% and earnings by 23.31% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings rose year-on-year. But this growth has not come as a result of improvement in gross margins or any cost control activities in its operations. Gross margins went from 28.32% to 28.72% for the same period last year, while operating margins (EBITDA margins) went from 11.65% to 13.83% over the same time frame.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

TJX-US‘s decline in gross margins has not produced any significant offsetting improvement in its working capital . This leads Capital Cube to conclude that the decline in gross margins are likely from operating issues and not trade-offs with the balance sheet. Working capital days are currently 29.03 days, compared to last year’s level of 25.33 days.

Gross Margin Versus Working Capital Days

Quadrant label definitions. Hover to know more

Customer Financed, Cash Starved, Supplier Financed, Cash Rich

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

TJX-US‘s change in operating cash flow of 18.26% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


Despite a decline in operating (EBIT) margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for The TJX Cos., Inc.

Company Profile

The TJX Cos., Inc. operates as an off-price apparel and home fashions retailer in the United States and worldwide. It operates through the following segments: Marmaxx, HomeGoods, TJX Canada, and TJX Europe. The Marmaxx segment sells family apparel including footwear and accessories, home fashions including home basics, accent furniture, lamps, rugs, wall décor, decorative accessories, giftware, and other merchandise. The HomeGoods segment offers home basics, giftware, accent furniture, lamps, rugs, wall décor, and decorative accessories. The TJX Canada segment operates the Winners, Marshalls, and HomeSense chains in Canada. The TJX Europe segment operates T.K. Maxx and HomeSense chains in Europe. The company was founded by Stanley Harris Feldberg and Sumner L. Feldberg in 1956 and is headquartered in Framingham, MA.

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