TJX, The TJX Companies, Inc.
The TJX Companies, Inc. is the leading off-price apparel and home fashions retailer in the United States and worldwide.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- A retailer, earning thin margins on high volume where inventory turns and scale decide the outcome.
- What moves the needle
- Sales per store and how fast inventory moves. What decides it: same-store sales, inventory turns, and whether thin margins survive a price war.
- Is it a good business?
- Return on capital has run high across the record (median 81%, above 15% in 10 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 7% of revenue reaches owners as cash, consistently. High, durable returns can mark a moat, but whether this one is real pricing power or an accounting artifact is the judgment the 10-K is for.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
The record, 2017–2026
realized figures from each filing, no estimates| 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMay 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $33.2B | $35.9B | $39.0B | $41.7B | $32.1B | $48.5B | $49.9B | $54.2B | $56.4B | $60.4B | $61.6B |
| Gross marginGross mgn | 29% | 29% | 29% | 28% | 24% | 28% | 28% | 30% | 31% | 31% | 31% |
| Operating marginOp. mgn | 12.8% | 12.3% | 12.2% | 10.7% | 0.9% | 9.3% | 9.5% | 11.2% | 11.6% | 12.2% | 7.7% |
| Net incomeNet inc. | $2.3B | $2.6B | $3.1B | $3.3B | $90M | $3.3B | $3.5B | $4.5B | $4.9B | $5.5B | $5.8B |
| EPS (diluted)EPS | $1.73 | $2.02 | $2.43 | $2.67 | $0.07 | $2.70 | $2.97 | $3.86 | $4.26 | $4.87 | $5.17 |
| Owner earningsOwner earn. | $2.6B | $2.0B | $3.0B | $2.8B | $4.0B | $2.0B | $2.6B | $4.3B | $4.2B | $4.9B | $5.5B |
| Owner earnings marginOE mgn | 7.8% | 5.5% | 7.6% | 6.8% | 12.4% | 4.1% | 5.3% | 8.0% | 7.4% | 8.1% | 8.9% |
| ROICROIC | 69% | 64% | 82% | 67% | 20% | 108% | 84% | 99% | 83% | 81% | 47% |
| Cash & investmentsCash+inv | $3.5B | $3.3B | $3.0B | $3.2B | $10.5B | $6.2B | $5.5B | $5.6B | $5.3B | $6.2B | $5.6B |
| Net debt / (cash)Net debt | ($1.2B) | ($1.0B) | ($797M) | ($980M) | ($4.4B) | ($2.9B) | ($2.1B) | ($2.7B) | ($2.5B) | ($3.4B) | ($2.7B) |
Owner’s Scorecard
Will it survive?
- Can it pay its interest? 60.3×ComfortableOperating income $4.8B ÷ interest expense $79M
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- ConservativeTotal debt $2.9B ÷ operating income $4.8B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash +$3.4BNet cashCash $6.2B − debt $2.9B
Cash and short-term investments exceed every dollar of debt by $3.4B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- TightDSO 4 + DIO 64 − DPO 40 days
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- ExceptionalNOPAT $3.6B ÷ invested capital $6.8B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- SolidOwner Earnings $4.9B = operating cash $6.9B − capex $2.0B
What an owner could take out without starving the business. That's 8% of revenue. Treating stock comp as the real expense it is (less $214M of SBC) leaves $4.7B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $6.9B ÷ net income $5.5B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns about halfDividends + buybacks $4.4B ÷ Owner Earnings $4.9B
Of $4.9B Owner Earnings, $4.4B (89%) went back to shareholders, $1.8B dividends, $2.5B buybacks. Net of $214M stock comp, the real buyback was about $2.3B. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.57×ExpandingCapex $2.0B ÷ depreciation $1.2B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2017–2026
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 10 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 13% (FY2017) → 12% (FY2026)
Margins held roughly steady across the record.
- Reinvestment, incremental ROIC 128%
Every extra dollar the company reinvested earned a high return, it is still compounding, not coasting on an old moat.
- Owner earnings growth +8%/yr
Free cash to owners grew about 8% a year over the record.
- Worst year 2021 · 0.9% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −1.8%/yr
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2017–2026
Over the record, the business generated $45.6B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a mature cash machine, most of what it earns goes straight back to owners.
- Reinvested$13.1B · 29%
- Dividends$11.3B · 25%
- Buybacks$19.5B · 43%
- Retained (debt / cash)$1.8B · 4%
It reinvested $13.1B (29%) back into the business and returned $30.7B (67%) to owners, $11.3B in dividends, $19.5B in buybacks. Total debt rose $642M across the span.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio1,774:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
- Stock-based compensation$214M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
4 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $60.4B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.14×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $2.9B vs $1.8B WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +86%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $4.87/share and book value $9.03/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what The TJX Companies, Inc. has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $5.5B on 1120M diluted shares; net cash $2.7B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2026
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionBusiness
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“The retail apparel and home fashion business is highly competitive.”
From the recordOperating margin7.7% now (TTM), off a 12.8% peak (FY2017) - Concentrated dependenceRisk Factors
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“As our success depends on our ability to meet customer demand and expectations, we seek to identify consumer trends and preferences on an ongoing basis and to offer inventory and shopping experiences that meet those trends and preferences.”
From the recordOwner-earnings margin at stake (TTM)9% - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“Our 2.25% ten-year Notes due September 2026 will mature during our third quarter of fiscal 2027 and are included within our current maturities of long-term debt.”
From the recordBalance sheet (TTM)+$3.4B net cash · interest covered 60.3× - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“In addition, the global regulatory environment surrounding information security and privacy is increasingly demanding, and cybersecurity compromises and disruptions in our IT systems could result in regulatory enforcement actions, class actions, contract liability or other forms of material legal li…”
A judgment, not a number, weigh it against the filing yourself. - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“We are continuing to implement and consider additional measures that seek to mitigate the impact of tariffs.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2026 vs FY2025
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “We do not generally enter into arrangements with vendors that provide for rebates and allowances that could ultimately affect the value of inventory. 38 Reserves for Uncertain Tax Positions Our income and other tax returns and reports are regularly audited by federal, state and local tax authorities…”
- “We adjust our unrecognized tax liability or benefit and income tax expense in the period in which the uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when new information becomes available.”
- “The increase in segment profit margin for fiscal 2026 was driven by favorable merchandise margin, expense leverage on higher comp sales, lower supply chain and store costs and a net benefit from the credit card interchange fees litigation settlement and related expenses.”
- “Litigation Settlement Related to Credit Card Interchange Fees and Related Expenses During the fourth quarter of fiscal 2026, we entered into a settlement agreement to resolve litigation related to credit card interchange fees in which we were a plaintiff.”
- “These effects could include causing injury or serious harm to our Associates or customers; severely damaging or destroying one or more of our stores, distribution facilities, or office facilities; or disrupting the operations of, or requiring the closure of, third-party service providers, one or mor…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, nearest by economic model
No close industry peers in the catalog yet, so these are the nearest by economic model (retail & distribution), compared on owner economics. Don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| LOWLowe's Cos Inc. | $86.3B | 33% | 11.8% | 27% | 9% |
| TJXThe TJX Companies, Inc. | $60.4B | 31% | 7.9% | 53% | 8% |
| DGDollar General Corp | $42.7B | 31% | 5.2% | 14% | 6% |
| BBYBest BUY Co., Inc. | $41.7B | 22% | 3.3% | 41% | 3% |
| SBUXStarbucks Corporation | $37.2B | 77% | 7.9% | 143% | 7% |
| MCDMcdonald’s Corporation | $26.9B | — | 46.1% | 26% | 27% |
| SHWTHE Sherwin-williams Company | $23.6B | 49% | 17.7% | 23% | 11% |
| ROSTRoss Stores, Inc. | $22.8B | 28% | 11.9% | 66% | 10% |