Stock Analysis on Net

TJX Cos. Inc. (NYSE:TJX)

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

TJX Cos. Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Net operating profit after taxes (NOPAT)1 5,082 4,636 3,803 3,612 270 3,536
Cost of capital2 12.88% 12.66% 12.35% 12.04% 11.85% 11.83%
Invested capital3 22,612 21,125 20,404 19,742 22,428 18,717
 
Economic profit4 2,169 1,961 1,283 1,234 (2,388) 1,322

Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 5,08212.88% × 22,612 = 2,169


Net Operating Profit After Taxes (NOPAT)
The net operating profit after taxes exhibits significant fluctuation over the observed periods. It starts at 3536 million USD in February 2020, dramatically declines to 270 million USD by January 2021, then recovers substantially over subsequent years, reaching 5082 million USD by February 2025. This trend indicates a period of major operational challenge or disruption around 2021, followed by a strong and consistent recovery.
Cost of Capital
The cost of capital shows a gradual upward trend, increasing from 11.83% in February 2020 to 12.88% in February 2025. This incremental rise suggests a slight increase in the company’s required return on investment or risk premium over time, possibly reflecting changes in market conditions, risk profile, or capital structure.
Invested Capital
Invested capital demonstrates variability with an initial increase from 18,717 million USD in February 2020 to 22,428 million USD in January 2021, followed by a decline to 19,742 million USD in January 2022. Afterward, the invested capital gradually increases again, reaching 22,612 million USD by February 2025. This pattern suggests fluctuating capital deployment, potentially linked to strategic investment decisions or asset management adjustments.
Economic Profit
Economic profit mirrors the fluctuations observed in NOPAT, with a positive value of 1322 million USD in February 2020, falling into negative territory (-2388 million USD) in January 2021, and returning to positive values thereafter. It increases consistently from 1234 million USD in January 2022 to 2169 million USD by February 2025. The negative economic profit in 2021 corresponds with the sharp decline in NOPAT and may indicate underperformance relative to the cost of capital during that year. The subsequent recovery signifies improved value creation over the later periods.

Net Operating Profit after Taxes (NOPAT)

TJX Cos. Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Net income 4,864 4,474 3,498 3,283 90 3,272
Deferred income tax expense (benefit)1 28 (8) 64 (44) (232) (6)
Increase (decrease) in deferred gift card revenue2 51 52 36 109 75 51
Increase (decrease) in equity equivalents3 79 44 100 65 (157) 44
Interest expense, excluding capitalized interest 76 79 84 120 194 59
Interest expense, operating lease liability4 357 319 253 220 245 268
Adjusted interest expense, excluding capitalized interest 433 398 337 339 439 327
Tax benefit of interest expense, excluding capitalized interest5 (91) (84) (71) (71) (92) (69)
Adjusted interest expense, excluding capitalized interest, after taxes6 342 315 267 268 346 258
Interest income (257) (249) (78) (4) (13) (49)
Investment income, before taxes (257) (249) (78) (4) (13) (49)
Tax expense (benefit) of investment income7 54 52 16 1 3 10
Investment income, after taxes8 (203) (197) (62) (4) (10) (39)
Net operating profit after taxes (NOPAT) 5,082 4,636 3,803 3,612 270 3,536

Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in deferred gift card revenue.

3 Addition of increase (decrease) in equity equivalents to net income.

4 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 9,912 × 3.60% = 357

5 2025 Calculation
Tax benefit of interest expense, excluding capitalized interest = Adjusted interest expense, excluding capitalized interest × Statutory income tax rate
= 433 × 21.00% = 91

6 Addition of after taxes interest expense to net income.

7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 257 × 21.00% = 54

8 Elimination of after taxes investment income.


The financial data reveals significant fluctuations and an overall upward trajectory in key profitability measures over the analyzed periods.

Net Income
Net income shows a sharp decline from 3,272 million US dollars in early 2020 to just 90 million in early 2021, indicating a substantial drop in profitability during that period. However, from 2021 onwards, net income exhibited a strong recovery and consistent growth, rising to 3,283 million in early 2022 and steadily increasing each subsequent year to reach 4,864 million by early 2025.
Net Operating Profit After Taxes (NOPAT)
NOPAT follows a similar pattern to net income, with a considerable decrease to 270 million in early 2021 from 3,536 million in early 2020. After this low point, NOPAT experienced a robust rebound and a steady upward trend, increasing to 3,612 million in early 2022 and further climbing to 5,082 million by early 2025.
Trend Analysis
Both net income and NOPAT demonstrate a drastic downturn in the 2021 fiscal period, likely reflecting an extraordinary event or disruption impacting profitability. Following this period, both metrics recover strongly and exhibit sustained growth through to 2025, surpassing pre-2021 levels significantly. This recovery and growth suggest improved operational efficiency or favorable business conditions contributing to enhanced financial performance.

Cash Operating Taxes

TJX Cos. Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Provision (benefit) for income taxes 1,619 1,493 1,138 1,115 (1) 1,134
Less: Deferred income tax expense (benefit) 28 (8) 64 (44) (232) (6)
Add: Tax savings from interest expense, excluding capitalized interest 91 84 71 71 92 69
Less: Tax imposed on investment income 54 52 16 1 3 10
Cash operating taxes 1,628 1,532 1,128 1,229 320 1,199

Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).


The analysis of the annual financial data reveals notable fluctuations and an overall upward trend in key tax-related metrics over the observed periods.

Provision (benefit) for income taxes
The provision for income taxes displays significant variability across the years. Initially, a positive provision of 1134 million US dollars was observed in early 2020, followed by a sharp decline to a negative amount of 1 million US dollars in early 2021, indicating a tax benefit or reversal during that period. Subsequently, the provision returned to positive values, increasing from 1115 million US dollars in early 2022 to 1138 million in early 2023. The trend continued upward with a marked increase to 1493 million in early 2024 and further to 1619 million in early 2025. This pattern suggests recovery from an anomalous tax benefit year and a strengthening in tax expense recognition thereafter.
Cash operating taxes
Cash operating taxes follow a somewhat parallel trend to the provision for income taxes but with less volatility. There was a decline from 1199 million US dollars in early 2020 to 320 million in early 2021, reflecting a considerable reduction in cash tax payments during that year. From early 2021, cash operating taxes increased notably, reaching 1229 million in early 2022, before slightly decreasing to 1128 million in early 2023. A substantial rise is observed in early 2024 and 2025, climbing to 1532 million and 1628 million, respectively. This rising trend indicates increased cash outflows related to tax obligations in the later periods.

Overall, the data depicts a year of unusual tax benefits or adjustments in 2021, followed by steady increases in both tax provisions and cash taxes, culminating in higher tax expenses and payments by 2024 and 2025. This trend may reflect changes in earnings, tax regulations, or strategic tax planning impacting the company's tax-related financial metrics over the period analyzed.


Invested Capital

TJX Cos. Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Current portion of long-term debt 500 750
Long-term debt, excluding current portion 2,866 2,862 2,859 3,355 5,333 2,237
Operating lease liability1 9,912 9,680 9,385 9,152 9,421 9,228
Total reported debt & leases 12,778 12,542 12,744 12,507 15,503 11,464
Shareholders’ equity 8,393 7,302 6,364 6,003 5,833 5,948
Net deferred tax (assets) liabilities2 8 (24) (31) (141) (90) 130
Deferred gift card revenue3 824 773 721 685 576 501
Equity equivalents4 832 749 690 544 486 631
Accumulated other comprehensive (income) loss, net of tax5 609 532 606 687 606 673
Adjusted shareholders’ equity 9,834 8,583 7,660 7,235 6,925 7,252
Invested capital 22,612 21,125 20,404 19,742 22,428 18,717

Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of deferred gift card revenue.

4 Addition of equity equivalents to shareholders’ equity.

5 Removal of accumulated other comprehensive income.


Total Reported Debt & Leases
The total reported debt and leases increased significantly from 11,464 million USD in early 2020 to a peak of 15,503 million USD in early 2021. Following this peak, the debt level decreased notably to 12,507 million USD in early 2022 and then remained relatively stable around the 12,500 to 12,800 million USD range through early 2025.
Shareholders’ Equity
Shareholders’ equity exhibited a generally upward trend over the period. Starting at 5,948 million USD in 2020, there was a slight decline by early 2021 to 5,833 million USD, followed by a consistent increase thereafter. By early 2025, equity reached 8,393 million USD, marking a significant growth from the initial value.
Invested Capital
Invested capital followed a pattern similar to total debt and leases, rising sharply from 18,717 million USD in 2020 to 22,428 million USD in 2021. Subsequently, it decreased to 19,742 million USD in 2022 and then experienced gradual growth over the following years, reaching 22,612 million USD by 2025. This indicates a period of increased investment around 2021, followed by stabilization and moderate growth.

Cost of Capital

TJX Cos. Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 139,559 139,559 ÷ 152,105 = 0.92 0.92 × 13.80% = 12.66%
Long-term debt, inclusive of current maturities3 2,634 2,634 ÷ 152,105 = 0.02 0.02 × 2.56% × (1 – 21.00%) = 0.04%
Operating lease liability4 9,912 9,912 ÷ 152,105 = 0.07 0.07 × 3.60% × (1 – 21.00%) = 0.19%
Total: 152,105 1.00 12.88%

Based on: 10-K (reporting date: 2025-02-01).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, inclusive of current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 110,216 110,216 ÷ 122,526 = 0.90 0.90 × 13.80% = 12.41%
Long-term debt, inclusive of current maturities3 2,630 2,630 ÷ 122,526 = 0.02 0.02 × 2.56% × (1 – 21.00%) = 0.04%
Operating lease liability4 9,680 9,680 ÷ 122,526 = 0.08 0.08 × 3.30% × (1 – 21.00%) = 0.21%
Total: 122,526 1.00 12.66%

Based on: 10-K (reporting date: 2024-02-03).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, inclusive of current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 88,229 88,229 ÷ 100,728 = 0.88 0.88 × 13.80% = 12.09%
Long-term debt, inclusive of current maturities3 3,114 3,114 ÷ 100,728 = 0.03 0.03 × 2.55% × (1 – 21.00%) = 0.06%
Operating lease liability4 9,385 9,385 ÷ 100,728 = 0.09 0.09 × 2.70% × (1 – 21.00%) = 0.20%
Total: 100,728 1.00 12.35%

Based on: 10-K (reporting date: 2023-01-28).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, inclusive of current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 72,864 72,864 ÷ 85,516 = 0.85 0.85 × 13.80% = 11.76%
Long-term debt, inclusive of current maturities3 3,500 3,500 ÷ 85,516 = 0.04 0.04 × 2.55% × (1 – 21.00%) = 0.08%
Operating lease liability4 9,152 9,152 ÷ 85,516 = 0.11 0.11 × 2.40% × (1 – 21.00%) = 0.20%
Total: 85,516 1.00 12.04%

Based on: 10-K (reporting date: 2022-01-29).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, inclusive of current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 79,775 79,775 ÷ 95,850 = 0.83 0.83 × 13.80% = 11.49%
Long-term debt, inclusive of current maturities3 6,654 6,654 ÷ 95,850 = 0.07 0.07 × 2.94% × (1 – 21.00%) = 0.16%
Operating lease liability4 9,421 9,421 ÷ 95,850 = 0.10 0.10 × 2.60% × (1 – 21.00%) = 0.20%
Total: 95,850 1.00 11.85%

Based on: 10-K (reporting date: 2021-01-30).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, inclusive of current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 56,052 56,052 ÷ 67,580 = 0.83 0.83 × 13.80% = 11.45%
Long-term debt, inclusive of current maturities3 2,300 2,300 ÷ 67,580 = 0.03 0.03 × 2.51% × (1 – 21.00%) = 0.07%
Operating lease liability4 9,228 9,228 ÷ 67,580 = 0.14 0.14 × 2.90% × (1 – 21.00%) = 0.31%
Total: 67,580 1.00 11.83%

Based on: 10-K (reporting date: 2020-02-01).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, inclusive of current maturities. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

TJX Cos. Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Selected Financial Data (US$ in millions)
Economic profit1 2,169 1,961 1,283 1,234 (2,388) 1,322
Invested capital2 22,612 21,125 20,404 19,742 22,428 18,717
Performance Ratio
Economic spread ratio3 9.59% 9.28% 6.29% 6.25% -10.65% 7.06%
Benchmarks
Economic Spread Ratio, Competitors4
Amazon.com Inc. 0.25% -5.41% -16.61% 3.41% 0.75%
Home Depot Inc. 9.61% 15.68% 19.66% 24.14% 14.97% 22.13%
Lowe’s Cos. Inc. 17.73% 20.52% 15.45% 23.58% 11.09% 7.40%

Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).

1 Economic profit. See details »

2 Invested capital. See details »

3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,169 ÷ 22,612 = 9.59%

4 Click competitor name to see calculations.


Economic Profit
The economic profit exhibited significant volatility over the analyzed periods. Starting from a positive value of 1,322 million USD in early 2020, it sharply declined to a negative 2,388 million USD by early 2021. This negative result was followed by a recovery to positive figures in subsequent years, reaching 1,234 million USD in early 2022 and gradually increasing to 2,169 million USD by early 2025. The overall trend from 2021 onwards indicates a progressive improvement in economic profitability.
Invested Capital
The invested capital generally increased over the timeframe, starting at 18,717 million USD in early 2020 and rising to 22,612 million USD by early 2025. There was a notable peak in early 2021 at 22,428 million USD, followed by a dip in early 2022 to 19,742 million USD. After this decrease, invested capital resumed its upward trend, suggesting ongoing investment activities or asset growth.
Economic Spread Ratio
The economic spread ratio mirrored the fluctuations seen in economic profit. It began at 7.06% in early 2020, declined sharply to negative 10.65% in early 2021, indicating that the cost of capital exceeded returns during that period. Subsequently, the ratio recovered moderately to around 6.25%-6.29% in 2022 and 2023. From 2024 onwards, there was a notable improvement reaching 9.28% and further to 9.59% by early 2025, reflecting enhanced efficiency in capital utilization and improved profitability margins relative to the cost of capital.
Overall Insights
The data reveals a period of financial strain during early 2021, characterized by negative economic profit and economic spread ratio, indicating challenges in generating returns above the cost of capital during that year. However, the subsequent recovery and steady growth in both economic profit and the economic spread ratio, coupled with an upward trend in invested capital, suggest effective management of investments and improved operational performance over the later periods. The positive trend in the economic spread ratio in recent years highlights stronger economic value creation.

Economic Profit Margin

TJX Cos. Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Selected Financial Data (US$ in millions)
Economic profit1 2,169 1,961 1,283 1,234 (2,388) 1,322
 
Net sales 56,360 54,217 49,936 48,550 32,137 41,717
Add: Increase (decrease) in deferred gift card revenue 51 52 36 109 75 51
Adjusted net sales 56,411 54,269 49,972 48,659 32,212 41,768
Performance Ratio
Economic profit margin2 3.84% 3.61% 2.57% 2.54% -7.41% 3.17%
Benchmarks
Economic Profit Margin, Competitors3
Amazon.com Inc. 0.15% -3.05% -8.67% 1.46% 0.29%
Home Depot Inc. 4.39% 5.75% 6.91% 7.68% 5.63% 7.34%
Lowe’s Cos. Inc. 5.57% 6.17% 3.94% 6.41% 3.51% 2.74%

Based on: 10-K (reporting date: 2025-02-01), 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01).

1 Economic profit. See details »

2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × 2,169 ÷ 56,411 = 3.84%

3 Click competitor name to see calculations.


Adjusted Net Sales
The adjusted net sales exhibit a generally increasing trend over the period. Beginning at approximately 41.8 billion US dollars in early 2020, there is a notable decline to around 32.2 billion US dollars by early 2021. Following this dip, sales recover significantly, rising to nearly 48.7 billion US dollars in early 2022 and continuing upward to approximately 56.4 billion US dollars by early 2025. This indicates a strong recovery and growth trajectory in sales after the initial downturn.
Economic Profit
The economic profit values show a volatile pattern. The profit starts at about 1.3 billion US dollars in early 2020 but drops to a substantial negative value of approximately -2.4 billion US dollars in early 2021, indicating a significant loss during this period. Subsequently, the company returns to positive economic profit territory from 2022 onward, with steady improvements each year, reaching around 2.2 billion US dollars by early 2025. This suggests a recovery phase with effective profitability enhancement strategies after the financial setback experienced in 2021.
Economic Profit Margin
The economic profit margin trends align closely with the economic profit values. Starting at 3.17% in 2020, the margin sharply declines into negative territory at -7.41% in 2021, reflecting the loss reported during that year. Post-2021, the margin recovers steadily, rising to 2.54% in 2022 and increasing gradually each subsequent year to reach 3.84% by 2025. This trend reinforces the observation of improving operational efficiency and profitability over the later periods.