TJX Cos. Inc. (NYSE:TJX)

The financial data over the analyzed periods presents notable fluctuations and trends in turnover ratios and cycle periods, reflecting operational dynamics.

Inventory Turnover

The inventory turnover ratio exhibits a generally variable pattern, with values oscillating between lows near 4.26 and highs reaching approximately 6.88. There is a recurring pattern of increases followed by declines, indicating fluctuating efficiency in inventory management across the periods. The turnover rate tends to spike around May and November of some years, then declines in subsequent quarters.

Receivables Turnover

Receivables turnover fluctuates considerably, ranging from roughly 60.88 to a peak exceeding 213 in a single period. Such spikes suggest episodic acceleration in collections. Despite short-term volatility, values mostly stabilize between 85 and 105 in the later quarters, indicating a relatively consistent pace of receivables collection in more recent periods.

Payables Turnover

Payables turnover is marked by significant variation, with ratios as low as approximately 4.13 and as high as 25.79. Early periods show pronounced spikes, but a trend toward stabilization is observed later, generally fluctuating between 6 and 10, which suggests improved predictability in payables management over time.

Working Capital Turnover

The working capital turnover ratio shows a distinctive upward trajectory, increasing from a low near 6.55 up to more than 32.24 in the latest period. This upward trend indicates increasingly efficient utilization of working capital to generate sales or revenue throughout the analyzed periods.

Average Inventory Processing Period

The average time to process inventory varies between approximately 53 and 86 days, evidencing operational inconsistencies or changes in inventory management. Periods with higher inventory days correspond to lower inventory turnover ratios, highlighting inverse movement between these measures.

Average Receivable Collection Period

The average collection period for receivables remains stable and low, generally between 2 to 6 days, suggesting effective and consistent collections practices that do not vary significantly across periods.

Operating Cycle

The operating cycle, combining inventory processing and receivables collection, fluctuates from about 58 to 90 days. It reflects the inventory trends more prominently due to the stability of the receivables collection period. Periods of extended inventory processing correspond with increased operating cycle lengths.

Average Payables Payment Period

The payment period for payables shows marked variability, from a low near 14 days to a high of 88 days. Early periods exhibit extended payment delays, followed by a tendency toward more moderate times ranging between 38 and 61 days, indicating changes in payment policies or supplier negotiations.

Cash Conversion Cycle

The cash conversion cycle ranges widely from negative values (approximately -11 days) to highs near 39 days. Negative cycles occur when payables payment periods exceed the sum of inventory processing and receivables collection, indicating a favorable cash flow timing. The cycle generally remains positive but relatively low, suggesting overall effective management of cash conversion.

The analysis of the quarterly financial data reveals several notable patterns and insights related to cost of sales, merchandise inventories, and inventory turnover ratios over the periods from May 2019 through May 2025.

Cost of Sales

The cost of sales exhibits a generally increasing trend over the observation period, with fluctuations consistent with seasonal and market dynamics. Initially, the cost rose steadily from 6,638 million USD in May 2019 to a peak of 8,742 million USD in February 2020, followed by a sharp decline in May 2020 to 4,414 million USD, likely reflecting disruptions or reduced activity.

Subsequent quarters show a recovery and growth pattern, with values climbing back to double-digit thousands by early 2023, culminating in a peak of 11,528 million USD in February 2024. Minor fluctuations occur afterward, ending at 9,246 million USD in May 2025, suggesting volatility but an overall upward trajectory in cost levels.

Merchandise Inventories

Merchandise inventory levels show variable movements with some pronounced shifts. Initial inventory values hovered around 5,000 million USD in mid-2019, increasing to over 6,200 million USD by late 2019 but then sharply dipping to approximately 3,744 million USD by August 2020. This decline may indicate inventory reduction efforts or sales demand fluctuations.

From late 2020 onward, inventories generally increased, culminating in a series of higher peaks around 8,300 million USD in late 2022 and early 2024, which suggests stock build-up possibly in anticipation of demand or to address supply chain considerations. Despite some volatility, inventory levels tend to show a gradual recovery and growth trend throughout the latter part of the timeline.

Inventory Turnover

Inventory turnover ratios reflect the efficiency with which inventory is managed relative to sales. Values fluctuate between approximately 4.26 and 6.88 across the reported periods. Notably, turnover was higher prior to mid-2020, indicating relatively faster inventory movement, followed by a decline during periods coinciding with market disturbances.

Turnover ratios recovered somewhat by early 2023, reaching values above 6.0 on multiple occasions, implying improved inventory cycling. However, there remains volatility indicative of operational and market challenges impacting inventory management efficiency over time.

In summary, the data points to a company experiencing periods of volatility, particularly around early 2020, with significant impacts on costs and inventory levels. Recovery and growth phases are evident post-2020, with increasing cost bases and inventory accumulations alongside generally improving inventory turnover ratios. These trends reflect adaptive responses to external pressures and evolving market conditions, with inventory and cost management remaining critical focus areas.

The quarterly financial data reveals several notable patterns in net sales, accounts receivable, and receivables turnover ratios over the examined periods.

Net Sales

Net sales demonstrate a strong upward trend from May 2019 through February 2020, increasing steadily from approximately $9.3 billion to $12.2 billion. However, there is a sharp decline during the May 2020 quarter, with sales dropping to around $4.4 billion, likely impacted by external factors affecting revenue generation during this period. Following this low, net sales recover notably by August and October 2020, climbing back above $10 billion, and display consistent growth thereafter, reaching a peak of roughly $16.4 billion in February 2024. The sales figures fluctuate moderately after this peak but generally maintain elevated levels compared to earlier years.

Accounts Receivable, Net

Accounts receivable present a less consistent pattern. Initially, values range from approximately $393 million to $386 million from May 2019 through February 2020. A significant drop occurs in May 2020, likely reflecting the same external conditions that affected net sales, with receivables falling to around $172 million. Subsequent quarters see a rebound in receivables, increasing to over $600 million by May 2021. After this period, the figures oscillate mostly between $500 million and $600 million, with no clear long-term upward or downward trend evident. This stabilization suggests a controlled management of receivables correlating with the recovery and growth in sales.

Receivables Turnover Ratio

The receivables turnover ratio shows a distinct irregularity at the start of the data, with an abnormally high value reported in the August 2019 quarter. Subsequently, the ratio declines sharply and then stabilizes into a range between approximately 60 and 106 across the remaining periods. This range indicates a relatively efficient recovery of receivables relative to sales over most quarters. Notably, turnover ratios generally increase during later quarters, peaking between late 2023 and early 2024, which may reflect improved collections or a change in credit policies aligned with increased sales volumes.

In summary, the data indicates a sizable disruption in mid-2020 impacting both sales and receivables, followed by a robust recovery and growth phase. Accounts receivable levels have been managed effectively in relation to the recovery in net sales. The receivables turnover ratio, despite initial fluctuations, stabilizes and trends positively in recent quarters, supporting the conclusion of improved asset utilization and collection efficiency over time.

The analysis of the financial data reveals several notable trends and fluctuations across the reported periods.

Cost of Sales, Including Buying and Occupancy Costs

This metric shows a general upward trajectory over the examined quarters, albeit with some volatility. Starting from approximately 6,638 million USD, costs rose steadily to peak at around 10,732 million USD in January 2023. There were significant dips observed around May 2020 and subsequent quarters, likely reflecting external disruptions or operational adjustments. After the peak, values exhibit moderate fluctuations but remain generally elevated compared to the initial periods, ending near 9,246 million USD as of the latest period.

Accounts Payable

The accounts payable figures demonstrate considerable variability over time. The values ranged between approximately 1,071 million USD and over 6,143 million USD, with pronounced spikes and declines. Early periods show lower payable balances, with a substantial increase around October 2020. Despite fluctuations, the subsequent periods maintain accounts payable within a moderate range, fluctuating between roughly 3,794 million USD and 5,443 million USD. The general pattern suggests episodic increases, possibly linked to purchase volumes or payment timing strategies.

Payables Turnover Ratio

Data for the payables turnover ratio starts from the period ending November 2, 2019. The ratio exhibits a high degree of volatility, with values oscillating broadly between lows near 4.13 and highs above 25.79. The highest ratio is observed in May 2020, indicating a rapid payment cycle in that quarter. In other periods, this ratio fluctuates within a closer range of approximately 6 to 9, suggesting variable payment speeds relative to purchases. Overall, the turnover ratio lacks a clear trend but indicates shifts in payment management practices or supplier terms.

In summary, the cost of sales generally increased, reflecting growth or inflationary pressures, though interspersed with periods of decline. Accounts payable show a pattern of spikes and moderate stability, implying strategic management of liabilities. The payables turnover ratio's variability indicates inconsistent payment velocity, with certain quarters reflecting accelerated or decelerated payables processing.

The working capital exhibits significant fluctuations throughout the periods. Initially, from May 2019 to February 2020, there is a steady increase from 1,486 million to 1,740 million US dollars. A remarkable spike occurs in May 2020, reaching 5,627 million, followed by a decline and stabilization around the 2,000 to 3,000 million range in subsequent quarters up to May 2025. Notably, the working capital peaks early in the post-May 2020 period and then trends downward afterward.

Net sales demonstrate a cyclical pattern with notable volatility. From May 2019 through February 2020, net sales increase steadily, from 9,278 million to 12,206 million US dollars. There is a sharp decline in May 2020 to 4,409 million, likely reflecting an extraordinary event impacting sales. The sales recover progressively from August 2020 onwards, peaking at various intervals such as January 2022 (13,854 million), January 2023 (14,520 million), and February 2024 (16,411 million). After these peaks, there are occasional dips in subsequent quarters, but the overall trend indicates recovery and growth beyond the pre-May 2020 levels.

Working capital turnover shows data only starting May 2020. At this point, the ratio is extremely high at 23.97, signifying very efficient use of working capital relative to net sales, possibly due to the abnormal reduction in net sales combined with the spike in working capital. Subsequently, the turnover ratio decreases sharply to 6.55 and fluctuates between approximately 6.91 and 8.72 up to August 2021. From October 2021 onwards, the turnover ratio improves steadily, reaching levels above 20 consistently from July 2022 through May 2025, with a peak ratio of 32.24 in February 2025. This suggests an enhanced utilization efficiency of working capital over time following the initial volatility.

Overall, the data reflects a disruptive event around May 2020, characterized by a dramatic spike in working capital and a concurrent plunge in net sales. Following this period, net sales recover gradually and surpass pre-event values, while working capital returns to a lower and more stable range. The working capital turnover ratio, initially extreme, stabilizes and improves significantly, indicating a return to and improvement in capital efficiency over the longer term.

The analysis of the inventory management metrics over the given periods reveals fluctuations in both inventory turnover and average inventory processing period. These two indicators exhibit an inverse relationship, which is consistent with theoretical expectations.

Inventory Turnover

The inventory turnover ratio starts at 6.13 in the period beginning May 2, 2020, then declines to 5.59 before rising to a peak of 6.88 in October 2020. This is followed by a decreasing trend, reaching a low of 4.26 in October 2022. Subsequent periods show a recovery, with turnover increasing to 6.36 by February 2024 before slightly declining to 5.56 by May 2025. The ratio exhibits cyclical behavior with alternating periods of improvement and decline, but no consistent long-term upward or downward trend is observed.

Average Inventory Processing Period

The average number of days inventory remains before sale tends to move inversely to inventory turnover, as expected. It starts at 60 days in May 2020, grows to a peak of 86 days in January 2023, signifying slower inventory movement and potential accumulation. Following this peak, the period declines to a minimum of 57 days in February 2024, indicating a more efficient inventory processing phase. However, by May 2025, the period extends again to 66 days, reflecting some volatility in inventory management efficiency across the periods.

Overall Trends and Insights

The data indicates a variable inventory management performance over the observed timeline. The early period shows relatively stable turnover and processing days, but significant volatility appears after mid-2020, perhaps influenced by external business or market conditions. The peak processing period and reduced turnover around late 2022 and early 2023 suggest challenges in inventory liquidation or increased procurement. The subsequent improvement in turnover and processing days points to adjustments in operations or market recovery. However, the later periods indicate that such improvements are not entirely sustained, reflecting ongoing adjustments or market fluctuations affecting inventory management effectiveness.

The data reveals notable fluctuations and subsequent stabilization in the receivables turnover and the average receivable collection period over the observed time frame.

Receivables Turnover

The receivables turnover ratio exhibits significant volatility initially, with values ranging dramatically from 108 up to 213.66 before declining sharply to nearly 60.88. Following this period of high variability, the ratio stabilizes, generally fluctuating between approximately 70 and 105. This indicates a return to more consistent collection efficiency in recent periods. The later values suggest a maintained relatively healthy receivables management, with turnover ratios consistently above 80 and often nearing or surpassing 90, which implies brisk collection of receivables.

Average Receivable Collection Period

The average collection period inversely mirrors the volatility in turnover. Initially, the number of days varies between 2 and 6, reflecting irregularities likely tied to the fluctuating turnover ratio. In subsequent periods, this measure stabilizes predominantly around 4 days, maintaining a tight range of 3 to 5 days across the latest intervals. This consistency signals effective credit and collection policies, enabling the company to collect receivables swiftly and reliably over time.

Overall Trends and Insights

The data overall suggests that after an early phase of inconsistency, possibly indicative of operational or market disruptions, the company's receivables management processes improved significantly. The stabilization of both turnover ratio and collection days implies refined efficiency in credit administration and cash flow management. Maintaining a low average collection period consistently near 4 days is a positive sign of prompt cash conversion from sales.

The analysis of the average inventory processing period, average receivable collection period, and operating cycle reveals distinct patterns over the observed quarters.

Average Inventory Processing Period

The inventory processing period exhibits notable variability, fluctuating between a low of 53 days (Nov 2, 2019) and a high of 86 days (Jan 28, 2023). Initial periods show values in the low 60s, with a downward trend to the mid-50s before increasing sharply to above 70 days in early 2020 and again rising to 86 days by the start of 2023. It subsequently declines and stabilizes around the 60s for the most recent quarters. These fluctuations suggest varying efficiency or seasonal impacts in inventory turnover.

Average Receivable Collection Period

The receivable collection period remains consistently low throughout the timeline, mostly oscillating between 3 and 6 days. After an initial value of 3 days, it briefly drops to 2 days (Aug 3, 2020) and then stabilizes predominantly at 4 days in the later periods. The consistency indicates strong receivables management with minimal collection delays.

Operating Cycle

The operating cycle aligns closely with the trends in the inventory processing period, ranging from as low as 58 days (Nov 2, 2019) to a maximum of 90 days (Jan 28, 2023). The overall pattern reflects an increase during early 2020, peaking in early 2023, then decreasing and settling in the mid-60s to low 80s range toward recent quarters. The moderate fluctuations parallel those seen in inventory processing, implying inventory turnover is the primary driver of changes in the operating cycle.

In summary, the company's working capital efficiency as measured by receivables remains stable and efficient. Inventory management, however, shows periods of volatility, impacting the operating cycle correspondingly. The latest trends suggest a return to more normalized inventory processing durations after peaks in earlier years.

The analysis of the "Payables turnover" and "Average payables payment period" ratios over the reported quarterly periods reveals notable fluctuations and cyclical patterns in the company's payables management.

Payables Turnover

Data on payables turnover begins from the period ending May 2, 2020. Initially, a high turnover of 25.79 is recorded, which then sharply decreases to 10.64 in the subsequent quarter.

Following this, turnover continues to decline reaching a low of 4.13 by the quarter ending January 30, 2021. After this trough, the ratio exhibits an overall upward trend with some volatility, generally fluctuating between approximately 6 and 9 from May 1, 2021, through to May 3, 2025.

The highest peaks within this period reach values slightly above 9, while the lowest values tend to hover around 6 to 7 in various quarters, indicating variability in how quickly the company settles its payables.

Average Payables Payment Period

The average payables payment period data, available from May 2, 2020, initially records 33 days, followed by a sharp decrease to 14 days in the next quarter, correlating inversely with the high payables turnover.

Subsequently, the payment period rises markedly, peaking at 88 days by the quarter ending January 30, 2021, which again matches the observed low payables turnover during the same period, reflecting slower payments to suppliers.

From May 1, 2021, onward, the average payment period demonstrates moderate fluctuations mostly ranging between approximately 37 and 53 days, with occasional deviations as seen in certain quarters (e.g., 59 days and 72 days). The trend appears relatively stable but with visible short-term increases and decreases throughout the series up to May 3, 2025.

Overall, the inverse relationship between payables turnover and average payment period is apparent throughout the periods analyzed, consistent with the typical financial principle that higher turnover corresponds to shorter payment periods. The sharp changes in early 2020 and early 2021 may indicate changes in supplier payment strategies or operational adjustments possibly linked to external factors. The stabilization in more recent quarters suggests a return to more consistent payment practices.

The analysis of the presented financial data reveals several notable trends in working capital management metrics over multiple quarters.

Average Inventory Processing Period

This metric demonstrates considerable fluctuation over the observed periods. Starting around 60 days, it experienced peaks and troughs, with notable highs such as 86 days in one quarter. There is no consistent upward or downward trend, but intermittent increases suggest variability in inventory turnover efficiency. The values near the end of the timeline settle around the low 60s, indicating moderate inventory holding durations.

Average Receivable Collection Period

This period remains relatively stable throughout the quarters reviewed, consistently averaging between 3 and 6 days. Such limited variation implies steady effectiveness in receivables management and timely collection of outstanding payments.

Average Payables Payment Period

The payable payment period shows significant variation, with periods as low as 14 days and as high as 88 days observed. There is a marked increase around the early 2020 quarters, reaching a peak, followed by a subsequent reduction and moderate oscillations in later periods. This variability suggests shifting strategies in supplier payment timing, potentially reflecting adjustments in cash flow management or changes in vendor negotiations.

Cash Conversion Cycle (CCC)

The cash conversion cycle exhibits fluctuations but remains primarily positive, with values mostly ranging from low twenties to mid-thirties in days. Notably, there is an instance of a negative CCC, indicating a period when the company was able to convert its investments in inventory and receivables back into cash more rapidly than it paid its payables. The overall pattern suggests the company maintains a relatively efficient cash flow cycle, balancing inventory, receivables, and payables timings.

In summary, receivables management appears consistent with limited variation, while inventory and payables periods experience more pronounced fluctuations. Such variability in inventory processing and payables payment periods may reflect operational and financial adjustments in response to market conditions or internal policies. The cash conversion cycle remains largely stable and positive, indicating effective overall working capital management across the periods analyzed.