EPS of $0.96 decreased by 21.8% from previous year
Gross margin of 30.4%
Net income of 1.10B
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The TJX Companies Inc (0LCE.L) QQ2 2025 Results: Revenue Decline, Margin Resilience and Strong Cash Generation in a Retail Off-Price Environment
Executive Summary
The TJX Companies Inc reported Q2 2025 revenue of $13.468 billion, down 17.93% year over year but up 7.93% quarter over quarter, reflecting softer demand versus the prior-year peak while showing QoQ momentum as promotional dynamics moderated. The company delivered a robust gross margin of 30.35% and strong operating profitability, with operating income of $1.422 billion and net income of $1.099 billion, translating to an EPS of $0.97 (diluted $0.96). Despite the top-line decline, TJX generated solid operating cash flow of $1.629 billion and free cash flow of $1.067 billion, ending the period with $5.25 billion in cash and cash equivalents and a net debt position of approximately $7.40 billion. Management continued to execute capital allocation initiatives, including a sizable share repurchase program (~$559 million) and a $423 million dividend, while capex remained disciplined at $563 million.
The balance sheet remains solid, with total assets of about $30.56 billion versus total liabilities of $22.77 billion and stockholders’ equity of roughly $7.78 billion. The company’s off-price model continues to support resilient cash generation and liquidity, even as revenue faces tougher year-over-year comparisons amid slower consumer spending. Investors should monitor traffic trends, inventory management, gross margin discipline, and international expansion progress (TK Maxx in Europe and Australia) for potential margin recovery and upside from international topline growth.
- Revenue: $13.468B; YoY change: -17.93%; QoQ change: +7.93%
- Gross Profit: $4.088B; YoY change: -17.03%; QoQ change: +9.30%; Gross margin: 30.35%
- Operating Income: $1.422B; YoY change: -22.80%; QoQ change: +6.12%; Operating margin: 10.56%
- Net Income: $1.099B; YoY change: -21.67%; QoQ change: +2.71%; EPS: $0.97 (diluted $0.96)
- EBITDA: $1.753B; EBITDARatio: 13.02%
- Cash Flow: Operating cash flow $1.629B; Free cash flow $1.067B
- Balance Sheet: Cash and cash equivalents $5.25B; Total debt $12.651B; Net debt $7.401B; Total assets $30.556B; Total liabilities $22.773B; Total equity $7.782B
- Capital Allocation: Common stock repurchased $559M; Dividends paid $423M; Net cash used in financing activities $882M; Capex $563M
- Liquidity/Leverage: Current ratio ~1.21; Debt to equity ~1.63; Debt to capital ~0.619; Interest coverage ~71x
- Relative Valuation (peers/benchmarks): Revenue and margin levels are consistent with a mature off-price retailer; valuation multiples indicate premium pricing relative to book value but reflect durable FCF generation and brand breadth.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
13.47B
-17.93%
7.93%
Gross Profit
4.09B
-17.03%
9.30%
Operating Income
1.42B
-22.80%
6.12%
Net Income
1.10B
-21.67%
2.71%
EPS
0.97
-21.77%
3.19%
Key Financial Ratios
currentRatio
1.21
grossProfitMargin
30.4%
operatingProfitMargin
10.6%
netProfitMargin
8.16%
returnOnAssets
3.6%
returnOnEquity
14.1%
debtEquityRatio
1.63
operatingCashFlowPerShare
$1.44
freeCashFlowPerShare
$0.94
dividendPayoutRatio
38.5%
priceToBookRatio
16.43
priceEarningsRatio
29.09
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: The earnings transcript provided with the data is empty. As a result, there are no management quotes or thematic highlights available in this feed. If a transcript or management quotes from the QQ2 2025 call are provided, we will integrate them by themes (strategy, operations, market conditions) with context and significance for investors.
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Forward Guidance
No explicit forward guidance was included in the provided materials for QQ2 2025. Investors should monitor upcoming management commentary for: a) trajectory of same-store sales and traffic trends as promo intensity moderates; b) gross margin management given promotional dynamics and mix shifts between apparel and home categories; c) progress of international expansion (TK Maxx in Europe and Australia) and its margin implications; d) balance sheet leverage and capital allocation cadence (additional buybacks vs. dividends vs. capex); and e) inventory levels and markdown effectiveness in a softer demand environment. Given TJX’s historical playbook, a focus on cash generation, disciplined cost control, and selective international growth remains central to the earnings trajectory. Key factors to watch: consumer sentiment and employment trends, promotional intensity, FX exposure from international operations, and supply chain efficiency.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0LCE.L Focus
30.35%
10.60%
14.10%
29.09%
0KEF.L
1.01%
52.30%
2.77%
11.62%
0J1R.L
41.00%
41.00%
-91.30%
14.34%
0M3Q.L
71.70%
38.40%
12.60%
31.75%
0JT5.L
47.40%
30.50%
13.50%
19.49%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
TJX remains a durable cash-flow machine within the consumer cyclicals universe, supported by a large-scale off-price platform and strong balance sheet. The QQ2 2025 results show a sizable revenue decline year over year, but margins and cash generation remained resilient, and the company continued to deploy capital through buybacks and dividends while maintaining a disciplined capex program. The key to upside is a re-acceleration in traffic and a favorable price/mix dynamic as promotional intensity moderates, coupled with continued progress in international expansion that could unlock higher-margin revenue streams. Valuation remains premium relative to book value and earnings, underpinned by robust FCF and a durable business model; investors should monitor next-quarter guidance, traffic trends, margin recovery signals, and the trajectory of international store openings and online integration to assess potential upside from base-case assumptions.
Key Investment Factors
Growth Potential
Expansion of international footprint (TK Maxx in Europe and Australia) and incremental growth in home/fashion categories; ongoing levers from private-label and clearer merchandise mix optimization; continued strong free cash flow supports balanced capital returns.
Profitability Risk
Macro consumer weakness weighing on traffic and spend; aggressive promotional environment compressing gross margins; currency and import cost volatility for international businesses; execution risk in expanding store footprint and e-commerce integration.
Financial Position
Strong cash generation with $5.25B cash; solid operating cash flow ($1.629B) and FCF ($1.067B); manageable capex ($0.563B) and buybacks ($0.559B); net debt of ~$7.40B with high interest coverage; solid liquidity to weather downturns and fund strategic initiatives.
SWOT Analysis
Strengths
Scale and breadth of off-price portfolio (TJX Maxx, Marshalls, HomeGoods, TJX Canada, TJX International) delivering broad consumer reach
Strong free cash flow generation and conservative capital allocation
Sticky off-price model with flexible inventory clearance
Healthy balance sheet with substantial cash reserves and high interest coverage
Weaknesses
Revenue decline driven by softer discretionary spend (YoY down ~18%)
Lower absolute margins versus peak promotional periods; margin pressure in a promotional environment
Concentration in certain geographies (US/Canada) with incremental exposure to international markets via TK Maxx
Dependence on consumer discretionary cycles and promotional pricing dynamics
Opportunities
International expansion (TK Maxx in Europe and Australia) and potential online/offline integration
Category diversification into home and soft goods with promotional efficiency
Private-label and exclusive assortments to improve margin mix
Shareholder returns supported by strong FCF and debt capacity
Threats
Macroconsumer downturns reducing traffic and basket size
Intense competition from online and discount retailers (e.g., omnichannel players)
FX volatility impacting international earnings and cost of goods
Inventory markdown risk in a stretched promotional cycle and potential supply chain disruptions