TJX COMPANIES INC /DE/ Q4 FY2025 earnings call

• Business Update: Impressive fourth quarter with sales, profitability, and EPS above expectations. Overall comp sales growth 5% driven by customer transactions across divisions. Full-year sales exceeded $56 billion and 5,000th store opened.
• Divisional Highlights: Each division achieved comp sales growth of 4% or above. Marmax, HomeGoods, TJX Canada, and TJX International all performed well.
• Key Differentiators: Valued leadership in multiple regions, wide demographic appeal, flexible business model, differentiated treasure hunt shopping experience, world-class buying team, long-term store potential (aiming for 7,000 stores), joint ventures in Mexico and Middle East, and strong corporate responsibility initiatives.

Fourth Quarter 2025

• Net sales reached $16.4 billion, a 5% increase vs adjusted last year. Consolidated comp sales grew 5%, driven by customer transactions. Pretax profit margin was 11.6%, up 70 basis points. Gross margin rose 100 basis points. Diluted EPS was $1.23, up 10% vs adjusted last year. Divisional performance: TJX Canada comp sales increased 10%, and TJX International comp sales were up 7%.

Full-Year Fiscal 2025

• Full-year net sales surpassed $56 billion. Consolidated comp store sales grew 4%, driven by customer transactions. Pretax profit margin was 11.5%, up 60 basis points. SG&A was 19.4%, up 10 basis points. Full-year EPS was $4.26, up 13% vs last year. Divisions: Marmax overall sales exceeded $34 billion with 4% comp growth; HomeGoods sales reached $9.4 billion with 4% comp growth; TJX Canada sales were $5.2 billion with 5% comp growth; TJX International sales exceeded $7 billion with 4% comp growth.

• Full-Year Fiscal 2026: Planning comp store sales growth 2%-3%. Consolidated sales expected $58.1B-$58.6B, up 3%-4%. Pretax profit margin 11.3%-11.4%, down 10-20 basis points. Gross margin 30.4%-30.5%, down 10-20 basis points. SG&A 19.3%, 10 basis points favorable. EPS $4.34-$4.43, up 2%-4%.
• First Quarter 2026: Comp sales expected 2%-3%. Consolidated sales $12.8B-$12.9B. Pretax profit margin 10%-10.1%, down 100-110 basis points. Gross margin 29.8%-29.9%, down 10-20 basis points.
• Capital Plans: Capex $2.1B-$2.2B, 130 net new stores, 500 remodels, 40 relocations.
• Cash Distributions: Dividend increased 13% to $0.425 per share, buyback $2B-$2.5B.

• Foreign Exchange: Unfavorable foreign exchange rates impact consolidated sales and margins.
• China Tariffs: Potential impact on future buys, but management confident in navigating.
• Weather: Adverse weather patterns can affect sales in specific regions.

Q: What drove the stronger performance in Canada and international?

A: Tactical execution, flow plan in gift-giving period, mix advantage in both regions. Expect them to continue outperforming due to seasoned management and strong execution.

Q: Expectations for merchandise margins and shrink?

A: Mark on strategy, favorable shrink improvement plans. Navigating tariffs by buyers focusing on retail price and working backwards on costs.

Q: Store growth and real estate plans?

A: Plan to add 130 net new stores, opportunities in various markets including smaller footprint stores. Joint ventures in Mexico and Middle East with growth plans.

Q: Q1 guidance and profitability?

A: Timing of expenses, one-time items like CARES Act benefit reversal, and inventory hedge impacts contribute to Q1 guidance, but last nine months expected to have flat to up pretax margin and higher EPS.