TJX COMPANIES INC /DE/ [TJX] Filings

10-Q 1 tjx-20231028.htm 10-Q tjx-20231028

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(mark one)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended October 28, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 1-4908

The TJX Companies, Inc.

(Exact name of registrant as specified in its charter)


Delaware						04-2207613
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

770 Cochituate Road Framingham, Massachusetts						01701
(Address of principal executive offices)						(Zip Code)

(508) 390-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00 per share	TJX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The number of shares of registrant’s common stock outstanding as of November 17, 2023: 1,139,676,816

The TJX Companies, Inc.

TABLE OF CONTENTS


PART I
ITEM 1. Consolidated Financial Statements			3
Consolidated Statements of Income			3
Consolidated Statements of Comprehensive Income			4
Consolidated Balance Sheets			5
Consolidated Statements of Cash Flows			6
Consolidated Statements of Shareholders' Equity			7
Notes To Consolidated Financial Statements			9
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			21
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk			32
ITEM 4. Controls and Procedures			32

PART II
ITEM 1. Legal Proceedings			33
ITEM 1A. Risk Factors			33
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			33
ITEM 5. Other Information			33
ITEM 6. Exhibits			34

SIGNATURE			34

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

IN MILLIONS EXCEPT PER SHARE AMOUNTS


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales	$	13,265	$	12,167	$	37,806	$	35,416
Cost of sales, including buying and occupancy costs	9,139		8,624		26,423		25,418





Selling, general and administrative expenses	2,578		2,185		7,375		6,454
Impairment on equity investment	—		—		—		218



Interest (income) expense, net	(41)		(1)		(116)		29
Income before income taxes	1,589		1,359		4,124		3,297
Provision for income taxes	398		296		1,053		837
Net income	$	1,191	$	1,063	$	3,071	$	2,460
Basic earnings per share	$	1.04	$	0.92	$	2.68	$	2.10
Weighted average common shares – basic	1,144		1,161		1,148		1,169
Diluted earnings per share	$	1.03	$	0.91	$	2.65	$	2.08
Weighted average common shares – diluted	1,158		1,172		1,161		1,180

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

IN MILLIONS


	Thirteen Weeks Ended
	October 28, 2023		October 29, 2022
Net income	$	1,191	$	1,063
Additions to other comprehensive (loss), net of tax:
Foreign currency translation adjustments, net of related tax provision of $4 in fiscal 2024 and tax benefit of $9 in fiscal 2023	(102)		(65)
Reclassifications from other comprehensive (loss) to net income:

Amortization of prior service cost and deferred gains/(losses), net of related tax provisions of $0.2 in fiscal 2024 and $2 in fiscal 2023	0		4

Other comprehensive (loss), net of tax	(102)		(61)
Total comprehensive income	$	1,089	$	1,002


	Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022
Net income	$	3,071	$	2,460
Additions to other comprehensive (loss), net of tax:
Foreign currency translation adjustments, net of related tax provision of $3 in fiscal 2024 and tax benefit of $9 in fiscal 2023	(48)		(154)


Reclassifications from other comprehensive (loss) to net income:

Amortization of prior service cost and deferred gains/(losses), net of related tax provisions of $0.4 in fiscal 2024 and $5 in fiscal 2023	1		12

Other comprehensive (loss), net of tax	(47)		(142)
Total comprehensive income	$	3,024	$	2,318

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

IN MILLIONS, EXCEPT SHARE DATA


	October 28, 2023		January 28, 2023		October 29, 2022
Assets
Current assets:
Cash and cash equivalents	$	4,290	$	5,477	$	3,365

Accounts receivable, net	560		563		571
Merchandise inventories	8,285		5,819		8,329
Prepaid expenses and other current assets	535		478		582
Federal, state and foreign income taxes recoverable	136		119		142
Total current assets	13,806		12,456		12,989
Net property at cost	6,262		5,783		5,573
Non-current deferred income taxes, net	152		158		174
Operating lease right of use assets	9,289		9,086		8,986
Goodwill	94		97		95
Other assets	748		769		611
Total assets	$	30,351	$	28,349	$	28,428
Liabilities
Current liabilities:
Accounts payable	$	5,425	$	3,794	$	4,993
Accrued expenses and other current liabilities	4,482		4,346		4,084
Current portion of operating lease liabilities	1,682		1,610		1,574
Current portion of long-term debt	—		500		500
Federal, state and foreign income taxes payable	51		55		83
Total current liabilities	11,640		10,305		11,234
Other long-term liabilities	908		919		906
Non-current deferred income taxes, net	133		127		74
Long-term operating lease liabilities	7,976		7,775		7,691
Long-term debt	2,861		2,859		2,858
Commitments and contingencies (See Note K)
Shareholders’ equity
Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued	—		—		—
Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,140,732,746; 1,155,437,908 and 1,156,263,970 respectively	1,141		1,155		1,156
Additional paid-in capital	—		—		—
Accumulated other comprehensive (loss) income	(653)		(606)		(829)
Retained earnings	6,345		5,815		5,338
Total shareholders’ equity	6,833		6,364		5,665
Total liabilities and shareholders’ equity	$	30,351	$	28,349	$	28,428

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

IN MILLIONS


	Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022
Cash flows from operating activities:
Net income	$	3,071	$	2,460
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	712		656

Impairment on equity investment	—		218
Loss on property disposals and impairment charges	46		7

Deferred income tax provision	13		35
Share-based compensation	114		95
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	1		(69)
(Increase) in merchandise inventories	(2,528)		(2,545)
(Increase) in income taxes recoverable	(17)		(28)
(Increase) in prepaid expenses and other current assets	(20)		(72)
Increase in accounts payable	1,666		647
Increase (decrease) in accrued expenses and other liabilities	161		(237)
(Decrease) in income taxes payable	(5)		(103)
Increase in net operating lease liabilities	75		2
Other, net	(32)		(7)
Net cash provided by operating activities	3,257		1,059
Cash flows from investing activities:
Property additions	(1,280)		(1,100)


Purchases of investments	(22)		(26)
Sales and maturities of investments	21		16

Net cash (used in) investing activities	(1,281)		(1,110)
Cash flows from financing activities:
Repayment of debt	(500)		—


Payments for repurchase of common stock	(1,687)		(1,800)
Cash dividends paid	(1,105)		(998)
Proceeds from issuance of common stock	203		115

Other	(29)		(32)
Net cash (used in) financing activities	(3,118)		(2,715)
Effect of exchange rate changes on cash	(45)		(96)
Net (decrease) in cash and cash equivalents	(1,187)		(2,862)
Cash and cash equivalents at beginning of year	5,477		6,227
Cash and cash equivalents at end of period	$	4,290	$	3,365

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

IN MILLIONS


	Thirteen Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, July 29, 2023	1,145	$	1,145	$	—	$	(551)	$	6,014	$	6,608
Net income	—	—		—		—		1,191		1,191

Other comprehensive (loss), net of tax	—	—		—		(102)		—		(102)
Cash dividends declared on common stock	—	—		—		—		(380)		(380)
Recognition of share-based compensation	—	—		44		—		—		44
Issuance of common stock under stock incentive plan and related tax effect	3	3		119		—		—		122
Common stock repurchased	(7)	(7)		(163)		—		(480)		(650)
Balance, October 28, 2023	1,141	$	1,141	$	—	$	(653)	$	6,345	$	6,833


	Thirteen Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, July 30, 2022	1,162	$	1,162	$	—	$	(768)	$	5,003	$	5,397
Net income	—	—		—		—		1,063		1,063

Other comprehensive (loss), net of tax	—	—		—		(61)		—		(61)
Cash dividends declared on common stock	—	—		—		—		(342)		(342)
Recognition of share-based compensation	—	—		37		—		—		37
Issuance of common stock under stock incentive plan and related tax effect	2	2		62		—		—		64
Common stock repurchased	(8)	(8)		(99)		—		(386)		(493)
Balance, October 29, 2022	1,156	$	1,156	$	—	$	(829)	$	5,338	$	5,665

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

IN MILLIONS


	Thirty-Nine Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, January 28, 2023	1,155	$	1,155	$	—	$	(606)	$	5,815	$	6,364
Net income	—	—		—		—		3,071		3,071

Other comprehensive (loss), net of tax	—	—		—		(47)		—		(47)
Cash dividends declared on common stock	—	—		—		—		(1,144)		(1,144)
Recognition of share-based compensation	—	—		114		—		—		114
Issuance of common stock under stock incentive plan and related tax effect	6	6		170		—		(1)		175
Common stock repurchased	(20)	(20)		(284)		—		(1,396)		(1,700)
Balance, October 28, 2023	1,141	$	1,141	$	—	$	(653)	$	6,345	$	6,833


	Thirty-Nine Weeks Ended
	Common Stock
	Shares	Par Value $1		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
Balance, January 29, 2022	1,181	$	1,181	$	—	$	(687)	$	5,509	$	6,003
Net income	—	—		—		—		2,460		2,460

Other comprehensive (loss), net of tax	—	—		—		(142)		—		(142)
Cash dividends declared on common stock	—	—		—		—		(1,032)		(1,032)
Recognition of share-based compensation	—	—		95		—		—		95
Issuance of common stock under stock incentive plan and related tax effect	4	4		78		—		(1)		81
Common stock repurchased	(29)	(29)		(173)		—		(1,598)		(1,800)
Balance, October 29, 2022	1,156	$	1,156	$	—	$	(829)	$	5,338	$	5,665

The accompanying notes are an integral part of the unaudited consolidated financial statements.

THE TJX COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements and Notes thereto have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These Consolidated Financial Statements and Notes thereto are unaudited and, in the opinion of management, reflect all normal recurring adjustments, accruals and deferrals among periods required to match costs properly with the related revenue or activity, considered necessary by The TJX Companies, Inc. (together with its subsidiaries, “TJX”) for a fair statement of its Consolidated Financial Statements for the periods reported, all in conformity with GAAP consistently applied. The Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements, including the related notes, contained in TJX’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 (“fiscal 2023”).

These interim results are not necessarily indicative of results for the full fiscal year. TJX’s business, in common with the businesses of retailers generally, is subject to seasonal influences, with higher levels of sales and income generally realized in the second half of the year.

The January 28, 2023 balance sheet data was derived from audited Consolidated Financial Statements and does not include all disclosures required by GAAP.

Fiscal Year

TJX’s fiscal year ends on the Saturday nearest to the last day of January of each year. The current fiscal year ends February 3, 2024 (“fiscal 2024”) and is a 53-week fiscal year. Fiscal 2023 was a 52-week fiscal year. Fiscal 2025 will be a 52-week fiscal year and will end February 1, 2025.

Use of Estimates

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. TJX considers its accounting policies relating to inventory valuation, reserves for uncertain tax positions and loss contingencies to be the most significant accounting policies that involve management estimates and judgments. Actual amounts could differ from these estimates, and such differences could be material.

Equity Investment

In fiscal 2020, the Company acquired a minority ownership stake in privately held Familia, an off-price retailer of apparel and home fashions domiciled in Luxembourg that operates stores throughout Russia. During the first quarter of fiscal 2023, the Company announced that it had committed to divesting its minority investment, resulting in an impairment charge of $218 million representing the entire carrying value of the Company’s investment. Additionally, the Company realized a $54 million tax benefit when the Company completed the divestiture of this investment during the third quarter of fiscal 2023. See Note F—Fair Value Measurements for additional information.

Deferred Gift Card Revenue

The following table presents deferred gift card revenue activity:


In millions	October 28, 2023		October 29, 2022
Balance, beginning of year	$	721	$	685
Deferred revenue	1,283		1,259
Effect of exchange rates changes on deferred revenue	(4)		(9)
Revenue recognized	(1,342)		(1,318)
Balance, end of period	$	658	$	617

TJX recognized $426 million in gift card revenue for the three months ended October 28, 2023 and $412 million for the three months ended October 29, 2022. Gift cards are combined in one homogeneous pool and are not separately identifiable. As such, the revenue recognized consists of gift cards that were part of the deferred revenue balance at the beginning of the period as well as gift cards that were issued during the period.

Leases

Supplemental cash flow information related to leases is as follows:


	Thirty-Nine Weeks Ended
In millions	October 28, 2023		October 29, 2022
Operating cash flows paid for operating leases	$	1,508	$	1,453
Lease liabilities arising from obtaining right of use assets	$	1,595	$	1,697

Future Adoption of New Accounting Standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”). The Company has reviewed the new guidance and has determined that it will either not apply to TJX or is not expected to be material to its Consolidated Financial Statements upon adoption, and, therefore, the guidance is not disclosed.

Note B. Property at Cost

The following table presents the components of property at cost:


In millions	October 28, 2023		January 28, 2023		October 29, 2022
Land and buildings	$	2,097	$	2,043	$	1,984
Leasehold costs and improvements	4,163		3,874		3,744
Furniture, fixtures and equipment	7,843		7,400		7,190
Total property at cost	$	14,103	$	13,317	$	12,918
Less: accumulated depreciation and amortization	7,841		7,534		7,345
Net property at cost	$	6,262	$	5,783	$	5,573

Depreciation expense was $243 million for the three months ended October 28, 2023 and $217 million for the three months ended October 29, 2022. Depreciation expense was $707 million for the nine months ended October 28, 2023 and $651 million for the nine months ended October 29, 2022.

Non-cash investing activities in the cash flows consist of accrued capital additions of $168 million and $190 million as of the periods ended October 28, 2023 and October 29, 2022, respectively.

Note C. Accumulated Other Comprehensive (Loss) Income

Amounts included in Accumulated other comprehensive (loss) income are recorded net of taxes. The following table details the changes in Accumulated other comprehensive (loss) income for the twelve months ended January 28, 2023 and the nine months ended October 28, 2023:


In millions and net of immaterial taxes	Foreign Currency Translation		Deferred Benefit Costs		Accumulated Other Comprehensive (Loss) Income
Balance, January 29, 2022	$	(488)	$	(199)	$	(687)
Additions to other comprehensive (loss):
Foreign currency translation adjustments, net of taxes	(56)		—		(56)

Recognition of net gains/(losses) on benefit obligations, net of taxes	—		121		121

Reclassifications from other comprehensive (loss) to net income:

Amortization of prior service cost and deferred gains/(losses), net of taxes	—		16		16
Balance, January 28, 2023	$	(544)	$	(62)	$	(606)
Additions to other comprehensive (loss):
Foreign currency translation adjustments, net of taxes	(48)		—		(48)
Reclassifications from other comprehensive (loss) to net income:


Amortization of prior service cost and deferred gains/(losses), net of taxes	—		1		1
Balance, October 28, 2023	$	(592)	$	(61)	$	(653)

Note D. Capital Stock and Earnings Per Share

Capital Stock

TJX repurchased and retired 7.2 million shares of its common stock at a cost of approximately $653 million, including applicable excise tax, during the quarter ended October 28, 2023, on a “trade date” basis. During the nine months ended October 28, 2023, TJX repurchased and retired 20.4 million shares of its common stock at a cost of approximately $1.7 billion, on a “trade date” basis. TJX reflects stock repurchases in its consolidated financial statements on a “settlement date” or cash basis. TJX had cash expenditures under repurchase programs of $1.7 billion for the nine months ended October 28, 2023 and $1.8 billion for the nine months ended October 29, 2022. These expenditures were funded by cash on hand and cash generated from current and prior period operations.

In February 2023, the Company announced that its Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $2 billion of TJX common stock from time to time. Under this program, TJX had approximately $1.8 billion available for repurchase as of October 28, 2023.

All shares repurchased under the stock repurchase programs have been retired.

Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share:


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
Amounts in millions, except per share amounts	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Basic earnings per share:
Net income	$	1,191	$	1,063	$	3,071	$	2,460
Weighted average common shares outstanding for basic earnings per share calculation	1,144		1,161		1,148		1,169
Basic earnings per share	$	1.04	$	0.92	$	2.68	$	2.10
Diluted earnings per share:
Net income	$	1,191	$	1,063	$	3,071	$	2,460

Weighted average common shares outstanding for basic earnings per share calculation	1,144		1,161		1,148		1,169
Assumed exercise/vesting of stock options and awards	14		11		13		11
Weighted average common shares outstanding for diluted earnings per share calculation	1,158		1,172		1,161		1,180
Diluted earnings per share	$	1.03	$	0.91	$	2.65	$	2.08
Cash dividends declared per share	$	0.3325	$	0.295	$	0.9975	$	0.8850

The weighted average common shares for the diluted earnings per share calculation excludes the impact of outstanding stock options if the assumed proceeds per share of the option is in excess of the average price of TJX’s common stock for the related fiscal periods. Such options are excluded because they would have an antidilutive effect. There were 4.8 million options excluded for the thirteen weeks and thirty-nine weeks ended October 28, 2023. There were 11.2 million such options excluded for the thirteen weeks and thirty-nine weeks ended October 29, 2022.

Note E. Financial Instruments

As a result of its operating and financing activities, TJX is exposed to market risks from changes in interest and foreign currency exchange rates and fuel costs. These market risks may adversely affect TJX’s operating results and financial position. TJX seeks to minimize risk from changes in interest and foreign currency exchange rates and fuel costs through the use of derivative financial instruments when and to the extent deemed appropriate. TJX does not use derivative financial instruments for trading or other speculative purposes and does not use any leveraged derivative financial instruments. TJX recognizes all derivative instruments as either assets or liabilities in the Consolidated Balance Sheet and measures those instruments at fair value. The fair values of the derivatives are classified as assets or liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts. Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in the period of the change. For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of Accumulated other comprehensive (loss) income or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged.

Diesel Fuel Contracts

TJX hedges portions of its estimated notional diesel fuel requirements based on the diesel fuel expected to be consumed by independent freight carriers transporting TJX’s inventory. Independent freight carriers transporting TJX’s inventory charge TJX a mileage surcharge based on the price of diesel fuel. The hedge agreements are designed to mitigate the volatility of diesel fuel pricing, and the resulting per mile surcharges payable by TJX, by setting a fixed price per gallon for the period being hedged. During fiscal 2023, TJX entered into agreements to hedge a portion of its estimated notional diesel fuel requirements for fiscal 2024, and during the first nine months of fiscal 2024, TJX entered into agreements to hedge a portion of its estimated notional diesel fuel requirements for the first nine months of fiscal 2025. The hedge agreements outstanding at October 28, 2023 relate to approximately 50% of TJX’s estimated notional diesel fuel requirements for the remainder of fiscal 2024 and the first nine months of fiscal 2025. These diesel fuel hedge agreements will settle throughout fiscal 2024 and throughout the first ten months of fiscal 2025. TJX elected not to apply hedge accounting to these contracts.

Foreign Currency Contracts

TJX enters into forward foreign currency exchange contracts to obtain economic hedges on portions of merchandise purchases made and anticipated to be made by the Company’s operations in currencies other than their respective functional currencies. The contracts outstanding at October 28, 2023 cover merchandise purchases the Company is committed to over the next several months in fiscal 2024. Additionally, TJX’s operations in Europe are subject to foreign currency exposure as a result of their buying function being centralized in the U.K. Merchandise is purchased centrally in the U.K. and then shipped and billed to the retail entities in other countries. This intercompany billing to TJX’s European businesses’ Euro denominated operations creates exposure to the central buying entity for changes in the exchange rate between the Euro and British Pound. A portion of the inflows of Euros to the central buying entity provides a natural hedge for Euro denominated merchandise purchases from third-party vendors. TJX calculates any excess Euro exposure each month and enters into forward contracts of approximately 30 days' duration to mitigate this excess exposure.

TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt. The changes in fair value of these contracts are recorded in Selling, general and administrative expenses and are offset by marking the underlying item to fair value in the same period. Upon settlement, the realized gains and losses on these contracts are offset by the realized gains and losses of the underlying item in Selling, general and administrative expenses.

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at October 28, 2023:


In millions		Pay	Receive		Blended Contract Rate	Balance Sheet Location	Current Asset U.S.$		Current (Liability) U.S.$		Net Fair Value in U.S.$ at October 28, 2023
Fair value hedges:
Intercompany balances, primarily debt:

	€	60	£	52	0.8738	(Accrued Exp)	$	—	$	(0.1)	$	(0.1)
	A$	150	U.S.$	104	0.6937	Prepaid Exp	8.4		—		8.4
	U.S.$	69	£	55	0.8010	(Accrued Exp)	—		(2.0)		(2.0)
	£	150	U.S.$	186	1.2396	Prepaid Exp	3.9		—		3.9
	€	200	U.S.$	220	1.1008	Prepaid Exp	7.8		—		7.8

Economic hedges for which hedge accounting was not elected:
	Diesel fuel contracts	Fixed on 3.0M – 3.8M gal per month	Float on 3.0M – 3.8M gal per month		N/A	Prepaid Exp	2.7		—		2.7
Intercompany billings in TJX International, primarily merchandise:
	€	118	£	102	0.8646	(Accrued Exp)	—		(1.1)		(1.1)
Merchandise purchase commitments:
	C$	773	U.S.$	575	0.7440	Prepaid Exp	16.8		—		16.8
	C$	35	€	24	0.6826	Prepaid Exp / (Accrued Exp)	0.2		(0.1)		0.1
	£	365	U.S.$	458	1.2537	Prepaid Exp / (Accrued Exp)	14.7		(0.1)		14.6
	A$	58	U.S.$	39	0.6677	Prepaid Exp	1.9		—		1.9
	zł	581	£	110	0.1900	(Accrued Exp)	—		(3.6)		(3.6)

	U.S.$	120	€	110	0.9190	(Accrued Exp)	—		(3.2)		(3.2)
Total fair value of derivative financial instruments							$	56.4	$	(10.2)	$	46.2

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at January 28, 2023:


In millions		Pay	Receive		Blended Contract Rate	Balance Sheet Location	Current Asset U.S.$		Current (Liability) U.S.$		Net Fair Value in U.S.$ at January 28, 2023
Fair value hedges:
Intercompany balances, primarily debt:

	€	60	£	53	0.8807	(Accrued Exp)	$	—	$	(0.3)	$	(0.3)
	A$	150	U.S.$	105	0.7003	(Accrued Exp)	—		(2.6)		(2.6)
	U.S.$	69	£	55	0.8010	(Accrued Exp)	—		(0.3)		(0.3)
	£	200	U.S.$	244	1.2191	(Accrued Exp)	—		(5.5)		(5.5)
	€	200	U.S.$	213	1.0652	Prepaid Exp / (Accrued Exp)	0.8		(7.0)		(6.2)
Economic hedges for which hedge accounting was not elected:
	Diesel fuel contracts	Fixed on 3.2M – 3.6M gal per month	Float on 3.2M– 3.6M gal per month		N/A	Prepaid Exp	3.9		—		3.9
Intercompany billings in TJX International, primarily merchandise:
	€	146	£	129	0.8834	Prepaid Exp	0.8		—		0.8
Merchandise purchase commitments:
	C$	705	U.S.$	525	0.7449	Prepaid Exp / (Accrued Exp)	2.2		(7.1)		(4.9)
	C$	23	€	16	0.7064	Prepaid Exp / (Accrued Exp)	0.4		(0.0)		0.4
	£	299	U.S.$	356	1.1916	Prepaid Exp / (Accrued Exp)	0.1		(15.4)		(15.3)
	zł	507	£	91	0.1788	(Accrued Exp)	—		(3.6)		(3.6)
	A$	104	U.S.$	71	0.6819	(Accrued Exp)	—		(3.3)		(3.3)
	U.S.$	85	€	82	0.9634	Prepaid Exp	4.3		—		4.3
Total fair value of derivative financial instruments							$	12.5	$	(45.1)	$	(32.6)

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at October 29, 2022:


In millions		Pay	Receive		Blended Contract Rate	Balance Sheet Location	Current Asset U.S.$		Current (Liability) U.S.$		Net Fair Value in U.S.$ at October 29, 2022
Fair value hedges:
Intercompany balances, primarily debt:

	€	60	£	51	0.8526	(Accrued Exp)	$	—	$	(0.8)	$	(0.8)
	A$	170	U.S.$	120	0.7034	Prepaid Exp	10.6		—		10.6
	U.S.$	75	£	55	0.7368	(Accrued Exp)	—		(11.2)		(11.2)
	£	200	U.S.$	247	1.2341	Prepaid Exp / (Accrued Exp)	20.8		(4.1)		16.7
	€	200	U.S.$	217	1.0862	Prepaid Exp / (Accrued Exp)	17.7		(0.5)		17.2

Economic hedges for which hedge accounting was not elected:
	Diesel fuel contracts	Fixed on 3.1M – 3.9M gal per month	Float on 3.1M – 3.9M gal per month		N/A	Prepaid Exp	18.4		—		18.4
Intercompany billings in TJX International, primarily merchandise:
	€	222	£	195	0.8769	Prepaid Exp	4.2		—		4.2


Merchandise purchase commitments:
	C$	710	U.S.$	542	0.7633	Prepaid Exp / (Accrued Exp)	22.2		(0.5)		21.7
	C$	16	€	12	0.7453	Prepaid Exp / (Accrued Exp)	0.2		(0.0)		0.2
	£	389	U.S.$	475	1.2201	Prepaid Exp / (Accrued Exp)	29.6		(3.0)		26.6
	A$	79	U.S.$	54	0.6843	Prepaid Exp	3.6		—		3.6
	zł	614	£	108	0.1760	(Accrued Exp)	—		(2.8)		(2.8)

	U.S.$	88	€	85	0.9635	Prepaid Exp / (Accrued Exp)	0.3		(4.0)		(3.7)
Total fair value of derivative financial instruments							$	127.6	$	(26.9)	$	100.7

The impact of derivative financial instruments on the Consolidated Statements of Income is presented below:


		Amount of Gain (Loss) Recognized in Income by Derivative
	Location of Gain (Loss) Recognized in Income by Derivative	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
In millions		October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Fair value hedges:
Intercompany balances, primarily debt	Selling, general and administrative expenses	$	26	$	24	$	29	$	57
Economic hedges for which hedge accounting was not elected:

Diesel fuel contracts	Cost of sales, including buying and occupancy costs	2		(1)		(6)		53
Intercompany billings in TJX International, primarily merchandise	Cost of sales, including buying and occupancy costs	(2)		(6)		2		(6)

Merchandise purchase commitments	Cost of sales, including buying and occupancy costs	49		65		27		113
Gain recognized in income		$	75	$	82	$	52	$	217

Note F. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date or “exit price”. The inputs used to measure fair value are generally classified into the following hierarchy:


Level 1:						Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2:						Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3:						Unobservable inputs for the asset or liability

The following table sets forth TJX’s financial assets and liabilities that are accounted for at fair value on a recurring basis:


In millions	October 28, 2023		January 28, 2023		October 29, 2022
Level 1
Assets:
Executive Savings Plan investments	$	366.6	$	371.6	$	342.6
Level 2
Assets:

Foreign currency exchange contracts	$	53.7	$	8.6	$	109.2
Diesel fuel contracts	2.7		3.9		18.4
Liabilities:
Foreign currency exchange contracts	$	10.2	$	45.1	$	26.9

Investments designed to meet obligations under the Executive Savings Plan are invested in registered investment companies traded in active markets and are recorded at unadjusted quoted prices.

Foreign currency exchange contracts and diesel fuel contracts are valued using broker quotations, which include observable market information. TJX does not make adjustments to quotes or prices obtained from brokers or pricing services but does assess the credit risk of counterparties and will adjust final valuations when appropriate. Where independent pricing services provide fair values, TJX obtains an understanding of the methods used in pricing. As such, these instruments are classified within Level 2.

The fair value of TJX’s general corporate debt was estimated by obtaining market quotes given the trading levels of other bonds of the same general issuer type and market perceived credit quality. These inputs are considered to be Level 2 inputs. The fair value of long-term debt as of October 28, 2023 was $2.5 billion compared to a carrying value of $2.9 billion primarily due to the recent increase in interest rates. The fair value of long-term debt as of January 28, 2023 was $2.6 billion compared to a carrying value of $2.9 billion. The fair value of the current portion of long-term debt as of January 28, 2023 was $497 million compared to a carrying value of $500 million. The fair value of long-term debt as of October 29, 2022 was $2.5 billion compared to a carrying value of $2.9 billion. The fair value of the current portion of long-term debt as of October 29, 2022 was $493 million compared to a carrying value of $500 million. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements that might affect TJX’s ability to settle these obligations. For additional information on long-term debt, see Note I—Long-Term Debt and Credit Lines.

TJX’s cash equivalents are stated at cost, which approximates fair value due to the short maturities of these instruments.

Certain assets and liabilities are measured at fair value on a nonrecurring basis, whereas the majority of assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of an impairment. For the periods ended October 28, 2023, January 28, 2023 and October 29, 2022, the Company did not record any material impairments to long-lived assets.

During the first quarter of fiscal 2023, the Company announced its intention to divest from its position in its minority investment in Familia and re-characterized this investment as held-for-sale valued as a Level 3 position. Given the lack of an active market or observable inputs, the Company derived an exit price which indicated that this investment had no market value. As a result, the Company recorded a $218 million charge in the first quarter of fiscal 2023, which represented the entirety of its investment. See Note A—Basis of Presentation and Summary of Significant Accounting Policies for additional information.

Note G. Segment Information

TJX operates four main business segments. In the United States, the Marmaxx segment operates T.J. Maxx, Marshalls, tjmaxx.com and marshalls.com and the HomeGoods segment operates HomeGoods and Homesense. The TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and the TJX International segment operates T.K. Maxx and Homesense, as well as tkmaxx.com, tkmaxx.de, and tkmaxx.at in Europe and T.K. Maxx in Australia. In addition to the Company’s four main business segments, Sierra operates retail stores and sierra.com in the U.S. The results of Sierra are included in the Marmaxx segment. In the third quarter of fiscal 2024, the Company closed its HomeGoods e-commerce business.

All of TJX’s stores, with the exception of HomeGoods and HomeSense/Homesense, sell family apparel and home fashions. HomeGoods and HomeSense/Homesense offer home fashions.

TJX evaluates the performance of its segments based on “segment profit or loss,” which it defines as pre-tax income or loss before general corporate expense, interest (income) expense, net and certain separately disclosed unusual or infrequent items. “Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used by other entities. This measure of performance should not be considered an alternative to net income or cash flows from operating activities as an indicator of TJX’s performance or as a measure of liquidity.

Presented below is financial information with respect to TJX’s business segments:


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
In millions	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales:
In the United States:
Marmaxx	$	8,107	$	7,455	$	23,376	$	21,562
HomeGoods	2,208		1,948		6,185		5,840
TJX Canada	1,317		1,285		3,578		3,615
TJX International	1,633		1,479		4,667		4,399
Total net sales	$	13,265	$	12,167	$	37,806	$	35,416
Segment profit:
In the United States:
Marmaxx	$	1,134	$	1,003	$	3,246	$	2,840
HomeGoods	228		172		547		344
TJX Canada	223		204		532		528
TJX International	88		98		158		216
Total segment profit	1,673		1,477		4,483		3,928
General corporate expense	125		119		475		384

Impairment on equity investment	—		—		—		218

Interest (income) expense, net	(41)		(1)		(116)		29
Income before income taxes	$	1,589	$	1,359	$	4,124	$	3,297

Note H. Pension Plans and Other Retirement Benefits

Presented below is financial information relating to TJX’s funded defined benefit pension plan (“qualified pension plan” or “funded plan”) and its unfunded supplemental pension plan (“unfunded plan”) for the periods shown:


	Funded Plan				Unfunded Plan
	Thirteen Weeks Ended				Thirteen Weeks Ended
In millions	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	8	$	13	$	1	$	0
Interest cost	18		15		2		1
Expected return on plan assets	(20)		(23)		—		—
Amortization of net actuarial loss and prior service cost	0		5		0		1


Total expense	$	6	$	10	$	3	$	2

	Funded Plan				Unfunded Plan
	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
In millions	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Service cost	$	25	$	36	$	2	$	1
Interest cost	54		44		5		3
Expected return on plan assets	(60)		(67)		—		—
Amortization of net actuarial loss and prior service cost	0		14		1		3


Total expense	$	19	$	27	$	8	$	7

TJX’s policy with respect to the funded plan is to fund, at a minimum, the amount required to maintain a funded status of 80% of the applicable pension liability (the Funding Target pursuant to the Internal Revenue Code section 430) or such other amount as is sufficient to avoid restrictions with respect to the funding of nonqualified plans under the Internal Revenue Code. The Company does not anticipate any required funding in fiscal 2024 for the funded plan. The Company anticipates making contributions of $4 million to provide current benefits coming due under the unfunded plan in fiscal 2024.

The amounts included in Amortization of net actuarial loss and prior service cost in the table above have been reclassified in their entirety from Accumulated other comprehensive (loss) income to the Consolidated Statements of Income, net of related tax effects, for the periods presented.

In the second quarter of fiscal 2024, the Company announced that it would offer eligible former TJX Associates who have not yet commenced their qualified pension plan benefit an opportunity to receive a voluntary lump sum payout of their vested pension plan benefit. At the end of the offer period, the payout amount, based on participation rate, did not meet the threshold to record a non-cash settlement charge.

Note I. Long-Term Debt and Credit Lines

The table below presents long-term debt as of October 28, 2023, January 28, 2023 and October 29, 2022. All amounts are net of unamortized debt discounts.


In millions and net of immaterial unamortized debt discounts	October 28, 2023		January 28, 2023		October 29, 2022
General corporate debt:
2.500% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount)	$	—	$	500	$	500
2.250% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount)	998		997		997
1.150% senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18% after reduction of unamortized debt discount)	499		499		499
3.875% senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89% after reduction of unamortized debt discount)	496		496		496
1.600% senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61% after reduction of unamortized debt discount)	500		500		500
4.500% senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52% after reduction of unamortized debt discount)	383		383		383
Total debt	2,876		3,375		3,375
Current maturities of long-term debt, net of debt issuance costs	—