TJX Cos. Inc. (NYSE:TJX)

Current Income Tax Expense

The current income tax expense exhibits significant fluctuations over the analyzed periods. Starting at 1,140 million USD in early 2020, it sharply declined to 231 million USD in early 2021, representing a pronounced reduction. Subsequently, it rebounded to 1,159 million USD in early 2022 and remained relatively stable into early 2023 with 1,074 million USD. From early 2023 to early 2025, the current tax expense increased steadily, reaching 1,591 million USD by early 2025. This pattern indicates volatility initially, followed by a consistent upward trend in the most recent years.

Deferred Income Tax Expense

The deferred income tax amounts present more moderate but volatile movement. Initially, the deferred tax was a small benefit of 6 million USD in early 2020. It then transitioned into a significant deferred tax benefit of 232 million USD in early 2021. The figure subsequently moderated to a smaller deferred tax benefit of 44 million USD in early 2022, then shifted to a deferred tax expense of 64 million USD by early 2023. In the two most recent periods, the deferred tax fluctuated slightly, recording a minor tax benefit of 8 million USD followed by a tax expense of 28 million USD. The pattern suggests variability in deferred tax impacts, with no clear directional trend but oscillation around roughly zero.

Provision (Benefit) for Income Taxes

The overall provision for income taxes aligns broadly with the current tax expense movements, given the relatively small deferred amounts. The provision started at 1,134 million USD in early 2020, dropping nearly to zero (-1 million USD) in early 2021, indicating negligible tax expense or possibly a tax benefit during that period. It then increased sharply to 1,115 million USD in early 2022, remained steady and mildly increased to 1,138 million USD in early 2023, and further rose substantially to 1,619 million USD by early 2025. This progression suggests a return to higher tax liability levels after a pronounced dip in early 2021, consistent with fluctuations in current tax expense and reflecting overall increased earnings or taxable income in recent years.

The data reveals several notable trends in the income tax rates and related components over the analyzed periods.

U.S. Federal Statutory Income Tax Rate

Remained constant at 21% throughout the entire period, indicating stable federal tax policy applicable to the entity.

Effective State Income Tax Rate

Fluctuated significantly, with a marked spike in January 2021 reaching 28.1%, substantially higher than the other periods which mostly hovered around 4.2% to 4.6%. This sharp increase suggests an unusual event or adjustment impacting state taxes during that fiscal year.

Impact of Foreign Operations

Relatively stable across all years, maintaining a low percentage close to 1%, except for a substantial increase to 21.4% in January 2021, paralleling the spike observed in the effective state income tax rate. This suggests that foreign operations had an atypical tax effect solely in that year.

Excess Share-Based Compensation

Consistently negative contributions to the tax rate, generally around -1%, but with a pronounced deep drop to -59.4% in January 2021. This anomaly signals a significant, perhaps one-time, tax benefit or adjustment related to share-based compensation during that year.

Tax Credits

Absent in the earliest year, then present in small negative percentages from January 2021 onward, decreasing gradually from -8.9% to about -0.2%, indicating incremental utilization or recognition of tax credits over time.

Nondeductible/Nontaxable Items

Values oscillate near zero, ranging between -3.3% and 0.2%, with no clear trend, suggesting minor and fluctuating impacts on the overall tax rate from these items.

All Other

Generally minor fluctuations around zero, varying between -0.5% and 0.6%, reflecting negligible impact on tax rate variations.

Worldwide Effective Income Tax Rate

Excluding the unusual negative rate of -1.4% in January 2021, the effective tax rate exhibits relative stability around 25%, fluctuating slightly between 24.5% and 25.7% in the other years. The anomaly in 2021 corresponds temporally with the spikes in state income tax, foreign operations, and excess share-based compensation items, suggesting a one-time complex tax event significantly affecting the tax expense calculation that year.

In summary, the overall effective income tax rate demonstrates stability except for a pronounced anomaly in fiscal year 2021 characterized by elevated state and foreign tax impacts alongside a major reduction related to share-based compensation. The other components generally reflect steady and minor variations, indicating consistent underlying tax conditions outside that exceptional period.

The financial data over the six-year period reveals several noteworthy trends and shifts across different financial items. These changes provide insight into the company’s evolving financial position and obligations.

Net Operating Loss Carryforward

This item shows a fluctuating but generally declining trend, decreasing from $58 million in 2020 to $104 million in 2025 after peaking at $172 million in 2021. This pattern indicates reducing unused tax loss credits, which may suggest improved profitability or changes in taxable income.

Reserves for Lease Obligations

Data on reserves for lease obligations is only available for 2020, at $3 million, with no subsequent values reported. This absence may imply reclassification or elimination of this reserve category.

Pension, Stock Compensation, Postretirement and Employee Benefits

This category shows variability, decreasing slightly from $290 million in 2020 to a low of $273 million in 2021, then increasing to $392 million by 2025. The overall increase suggests rising costs or obligations related to employee compensation and benefits over time.

Operating Lease Liabilities

Operating lease liabilities demonstrate a consistent upward trend, rising steadily from $2,384 million in 2020 to $2,634 million in 2025. This increase reflects growing lease obligations, likely due to new or extended lease agreements.

Accruals and Reserves

There is a significant increase in accruals and reserves from $55 million in 2020 to $300 million in 2025. This fivefold growth indicates a substantial rise in anticipated future liabilities or expenses, warranting attention to potential risk exposure.

Other (first occurrence)

The 'Other' category fluctuates over the period, with a marked decrease from $84 million in 2020 to $15 million in 2021, remaining relatively low thereafter, ending at $20 million in 2025. This volatility suggests changes in miscellaneous financial items included in this line.

Gross Deferred Tax Assets

The gross deferred tax assets demonstrate a steady upward movement, increasing from $2,874 million in 2020 to $3,450 million in 2025. This growth represents a strengthening of the company's future tax benefits.

Valuation Allowance

The valuation allowance increases initially from -$60 million to -$86 million by 2023 but then decreases significantly to -$51 million in 2025. This reduction indicates a decreasing likelihood that deferred tax assets will not be realized, a positive development regarding tax asset recoverability.

Deferred Tax Assets

Net deferred tax assets rise steadily from $2,814 million in 2020 to $3,399 million in 2025, indicating an increasing amount of recognized tax credits and deductible temporary differences benefiting the company.

Property, Plant and Equipment

The net values for property, plant, and equipment show a declining trend from -$558 million in 2020 to -$742 million in 2025, indicating either continuous depreciation or asset retirements exceeding acquisitions.

Capitalized Inventory

This item demonstrates a gradual increase in net value in the negative direction, from -$47 million to -$73 million, suggesting potential changes in inventory capitalization practices or valuation adjustments over time.

Operating Lease Right of Use Assets

The corresponding right of use assets for operating leases closely mirror the lease liabilities trend, decreasing from -$2,316 million in 2020 to -$2,540 million in 2025. This correlation reflects the accounting treatment of leased assets over the period.

Tradename/Intangibles

Intangible assets related to tradenames show a consistent decline from -$16 million to -$24 million, suggesting amortization or impairment of these assets during the years analyzed.

Undistributed Foreign Earnings

Undistributed foreign earnings fluctuate without a clear upward or downward trajectory; starting at -$2 million, increasing negatively to -$29 million in 2024, then improving to -$23 million in 2025. This variability could indicate changes in foreign subsidiary profits or repatriation strategies.

Other (second occurrence)

The second 'Other' category begins at -$6 million in 2020, experiences a peak negative value of -$19 million in 2021, and then stabilizes around -$5 million for the subsequent years. This pattern may represent volatile miscellaneous liabilities or adjustments.

Deferred Tax Liabilities

Deferred tax liabilities increase steadily from -$2,944 million in 2020 to -$3,407 million in 2025. This growth reflects increasing taxable temporary differences or future tax obligations.

Net Deferred Tax Asset (Liability)

The net deferred tax asset (liability) fluctuates notably over the period, moving from a net liability of -$130 million in 2020 to net assets in 2021 and 2022 of $90 million and $141 million respectively, before declining again to a slight net liability of -$8 million by 2025. This volatility indicates changes in the company's tax position, possibly driven by variations in temporary differences, valuation allowances, or changes in tax laws.

Non-current deferred tax assets

There was a significant increase from 12 million US$ in early 2020 to a peak of 185 million US$ by early 2022. After this peak, the assets declined to 158 million US$ in early 2023 before showing a moderate recovery to 172 million US$ in early 2024, and then decreasing again to 148 million US$ in early 2025. Overall, the trend demonstrates an initial sharp growth followed by fluctuations and a moderate downward adjustment toward the end of the reported period.

Non-current deferred tax liabilities

The liabilities experienced a rapid decline from 142 million US$ in early 2020 to 37 million US$ by early 2021, indicating a substantial reduction during this period. From 2021 onward, liabilities increased continuously, reaching 44 million US$ in early 2022 and then rising sharply to 127 million US$ in early 2023. This upward trend continued, reaching 148 million US$ in early 2024 and further climbing to 156 million US$ in early 2025. The data suggests a recovery phase following the initial reduction, with liabilities trending upwards consistently over the last four years.

Overall trends and observations

Both deferred tax assets and liabilities showed considerable volatility over the reporting horizon. Deferred tax assets grew sharply until 2022 before experiencing variable declines, while deferred tax liabilities decreased sharply in the first year before increasing steadily. This pattern might reflect shifts in underlying tax planning strategies, changes in temporary differences subject to deferred tax accounting, or variations in company operations affecting taxable temporary differences. The convergence in values in the later years indicates a narrowing gap between deferred tax assets and liabilities.

Analysis of the financial data over the reported periods reveals several notable trends and fluctuations in key financial metrics when comparing reported and adjusted figures.

Total Assets

Both reported and adjusted total assets exhibited an overall upward trajectory from 2020 through 2025, with a peak observed in 2021 followed by a slight decline in 2022 and 2023, before rising again in 2024 and 2025. The adjusted figures closely mirror the reported values, indicating consistency in asset valuation post adjustments related to income taxes. The growth from 2023 to 2025 suggests an expansion in asset base over recent years.

Total Liabilities

Total liabilities, both reported and adjusted, followed a similar pattern where there was a sharp increase from 2020 to 2021, a decrease through 2022 and 2023, followed by a moderate increase in 2024 and 2025. The adjusted liabilities are slightly lower than reported across all periods, suggesting the adjustments have marginally reduced the liability figure. The fluctuation points to possible variations in debt management or operational obligations during these years.

Shareholders’ Equity

Shareholders’ equity displayed a generally positive growth trend over the six-year span for both reported and adjusted data. Notably, there was a dip from 2020 to 2021, after which equity continuously increased through 2025. The adjustments to equity show some variation, particularly apparent in 2020 and 2021, but the adjusted equity aligns closely with reported figures in later years. The increase in equity from 2022 onwards reflects strengthening capital reserves or retained earnings accumulation.

Net Income

Net income trends demonstrate considerable volatility. Reported net income plummeted sharply from 3,272 million USD in 2020 to a mere 90 million USD in 2021, then rebounded robustly in the subsequent years, with consistent growth reaching 4,864 million USD by 2025. The adjusted net income similarly reflected this pattern but presented negative income (-142 million USD) in 2021, suggesting adjustment impacts that recognized additional expenses or tax-related reversals that year. The recovery post-2021 with sustained income increase points to improved profitability or operational efficiency.

Overall, the financial data indicates a significant disruption around 2021, likely linked to extraordinary events impacting net income sharply. Despite this, the subsequent years show recovery and growth in assets, equity, and profitability metrics. The close alignment between reported and adjusted figures suggests that deferred and reported tax adjustments offer refinements without fundamentally altering the company’s financial position trends.

The analysis of the annual reported and deferred income tax adjusted financial indicators reveals several notable trends and fluctuations over the examined periods.

Net Profit Margin

The reported net profit margin demonstrated volatility, dropping sharply from 7.84% in 2020 to 0.28% in 2021, before recovering steadily to reach 8.63% in 2025. The adjusted net profit margin showed a similar pattern but with a slightly larger decline into negative territory in 2021 (-0.44%) before rebounding to 8.68% by 2025. This suggests a pronounced temporary setback likely influenced by extraordinary or non-recurring tax effects, with subsequent recovery and gradual improvement in profitability margins.

Total Asset Turnover

The total asset turnover ratios, both reported and adjusted, closely mirrored each other over the periods. After a decrease to approximately 1.04–1.05 in 2021, the turnover steadily improved to around 1.78 by 2025. This indicates a recovery in the efficiency of asset utilization following the dip in 2021, with relatively stable and slightly higher productivity in later years.

Financial Leverage

Reported financial leverage experienced an increase from 4.06 in 2020 to a peak of about 5.28 in 2021, followed by a consistent decline to 3.78 by 2025. The adjusted leverage followed a similar trajectory, rising to 5.34 in 2021 and then declining to 3.76 in 2025. The higher leverage ratio in 2021 suggests greater reliance on debt or liabilities during this period, which was gradually reduced over subsequent years, potentially indicating deleveraging or balance sheet strengthening efforts.

Return on Equity (ROE)

Reported ROE figures exhibit considerable fluctuation, plummeting from 55.01% in 2020 to 1.55% in 2021, then sharply rebounding to 57.95% by 2025. Adjusted ROE mirrors this trend but includes a negative value (-2.47%) in 2021, reinforcing the impact of tax adjustments on profitability during that year. The subsequent recovery and growth to above 58% suggest strong return generation on shareholders’ equity after the disruption.

Return on Assets (ROA)

ROA trends closely follow those of ROE and net profit margins. The reported ROA dropped dramatically from 13.55% in 2020 to 0.29% in 2021, then steadily increased to 15.32% by 2025. Adjusted ROA also went negative (-0.46%) in 2021 but recovered thereafter to reach 15.48%. The pattern underscores a temporary decline in asset profitability likely linked to tax-related disruptions in 2021, with a strong rebound and improving efficiency in asset utilization subsequently.

Overall, the data indicate that 2021 was an anomalous year marked by significant adverse impacts on profitability and efficiency ratios, likely influenced by extraordinary tax-related adjustments. Following this period, all examined indicators reflect a recovery trajectory, with margins, asset turnover, leverage, and returns on equity and assets improving to levels that either met or exceeded those observed prior to 2021. This suggests successful resolution of the temporary issues and strengthened financial performance in the more recent periods.

Reported Net Income

The reported net income exhibited significant fluctuation over the periods analyzed. In 2020, it stood at approximately $3.27 billion, then dramatically declined to $90 million in 2021. Following this sharp decrease, income rebounded strongly to $3.28 billion in 2022 and continued to increase steadily, reaching $4.86 billion in 2025.

Adjusted Net Income

The adjusted net income mirrored the trend of reported net income but showed some differences in magnitude. It started at $3.27 billion in 2020, dropped to a negative value of $142 million in 2021, indicating an adjusted loss for that year. The figure then recovered significantly, rising to $3.24 billion in 2022 and further increasing to approximately $4.89 billion by 2025. The adjusted net income suggests that after accounting for deferred income tax effects, the company experienced a loss only in 2021 but resumed strong earnings growth thereafter.

Reported Net Profit Margin

The reported net profit margin reflected a notable decline in 2021, with the margin decreasing from 7.84% in 2020 to a very low 0.28%. After this drop, margins improved consistently, rising to 6.76% in 2022 and increasing to 8.63% by 2025. This indicates that profitability relative to revenue was severely impacted in 2021 but steadily recovered and strengthened over the subsequent years.

Adjusted Net Profit Margin

The adjusted net profit margin followed a similar trajectory as the reported margin but showed a negative margin of -0.44% in 2021, reflecting the adjusted net loss for that year after tax adjustments. After 2021, the margin improved progressively, reaching 6.67% in 2022 and increasing to 8.68% by 2025. This progression implies a turnaround in operational profitability once the unusual tax-related adjustments were accounted for.

Overall Observations

The data reveal a pronounced earnings and profitability disruption in 2021, both on a reported and adjusted basis, which can be attributed to significant tax adjustments affecting net income. From 2022 onward, the company demonstrated a robust recovery and consistent growth in both net income and profit margins. The adjusted figures provide a clearer picture of operational performance by excluding volatile tax impacts, highlighting a temporary and isolated loss in 2021. The improving trends suggest strengthening financial health and profitability momentum through to 2025.

The data reveals several notable trends in the reported and adjusted financial metrics over the six-year period:

Total Assets

Both reported and adjusted total assets show an overall increasing trend from 2020 through 2025. Reported total assets rose from $24,145 million in early 2020 to $31,749 million by early 2025, reflecting significant growth. Adjusted total assets follow a similar trajectory, increasing from $24,133 million to $31,601 million over the same period. The difference between reported and adjusted assets is minimal, indicating that adjustments for income tax do not materially affect the asset base.

Total Asset Turnover

The reported total asset turnover ratio shows variability over the years but maintains a general upward trend from 2021 onward. Initially, the ratio drops sharply from 1.73 in 2020 to 1.04 in 2021 but subsequently recovers, increasing to 1.78 by 2025. The adjusted total asset turnover mirrors this trend closely, beginning at 1.73 in 2020, dipping to 1.05 in 2021, and then rising to 1.78 by 2025. This suggests a rebound in the efficiency with which assets generate revenue after the dip observed in 2021.

Insights

The sharp decline in asset turnover in 2021, coinciding with an increase in total assets, may indicate that asset growth outpaced revenue generation temporarily, reducing efficiency. However, from 2022 onwards, asset turnover improves alongside steady asset growth, demonstrating enhanced utilization of assets to generate sales. The close alignment of reported and adjusted figures signifies that the adjustments related to income tax do not substantially distort the operational efficiency metrics. Overall, the company exhibits strengthening asset growth and recovering efficiency in asset use over the analyzed period.

Assets Trends

The reported total assets demonstrate an overall upward trend from 24,145 million US dollars in 2020 to 31,749 million US dollars in 2025, with a slight dip observed between 2021 and 2023. Adjusted total assets follow a similar pattern, increasing from 24,133 million US dollars in 2020 to 31,601 million US dollars in 2025, maintaining close alignment with the reported figures throughout the period.

Shareholders' Equity Trends

Reported shareholders’ equity shows steady growth over the timeframe, rising from 5,948 million US dollars in 2020 to 8,393 million US dollars by 2025. The adjusted shareholders’ equity mirrors this trend, though it starts slightly higher at 6,078 million US dollars in 2020 and ends marginally above the reported figure at 8,401 million US dollars in 2025. Notably, a slight decline in adjusted equity occurred in 2021 before resuming growth thereafter.

Financial Leverage Trends

Reported financial leverage ratio peaks at 5.28 in 2021, indicating higher leverage during that year, then steadily decreases to 3.78 by 2025. Adjusted financial leverage follows a very similar trajectory, peaking at 5.34 in 2021 and declining to 3.76 by 2025. This pattern suggests a strategic reduction in leverage following the peak year, improving financial stability.

Comparative Insights

The adjusted financial data tends to closely track the reported data, with only minor differences observed. These differences are consistent and do not significantly alter the overall trend analysis. Both datasets affirm a phase of asset growth interrupted by minor contractions, steady increases in shareholder equity, and a clear deleveraging trend beginning after 2021.

Summary

Overall, the data indicates that the company has expanded its asset base and increased equity capital over the five-year span while progressively reducing financial leverage after 2021. The alignment between reported and adjusted figures confirms the reliability of these trends. The deleveraging effort likely reflects a strategic approach to strengthen financial health and reduce risk exposure.

The financial data over the observed periods reveals notable fluctuations and trends in reported and adjusted income, equity, and return on equity (ROE) metrics.

Net Income

Reported net income experienced a significant decline in the period ending January 30, 2021, plummeting from 3,272 million US dollars to only 90 million US dollars. This sharp decrease was temporary as net income rebounded strongly in subsequent years, reaching 4,864 million US dollars by February 1, 2025. Adjusted net income mirrored this trend but showed a slightly more pronounced negative value in January 30, 2021, posting -142 million US dollars. From 2022 onwards, adjusted net income rose consistently, reaching 4,892 million US dollars by the last period.

Shareholders’ Equity

Reported shareholders’ equity exhibited relatively stable values with minor fluctuations, starting at 5,948 million US dollars in February 2020 and slightly dipping to 5,833 million US dollars in January 2021. Thereafter, equity values indicated steady growth through the periods, increasing to 8,393 million US dollars by February 2025. The adjusted shareholders’ equity followed a similar pattern but started at a slightly higher base of 6,078 million US dollars in 2020 and showed a more pronounced dip in January 2021 to 5,743 million US dollars before rising steadily to 8,401 million US dollars in 2025, closely aligning with the reported figures.

Return on Equity (ROE)

The reported ROE sharply declined from an exceptionally high 55.01% in February 2020 to a minimal 1.55% in January 2021, reflecting the steep drop in net income during that year. Following this, ROE levels recovered gradually, reaching a peak of 61.27% in February 2024 before a slight decrease to 57.95% in the final period. Adjusted ROE presented a similar downward spike to -2.47% in January 2021. From 2022 onward, adjusted ROE showed consistent improvement, peaking slightly higher than reported values at 61.36% in 2024 and maintaining a close margin at 58.23% in 2025.

Overall, the data indicates a significant one-year disruption in earnings and equity metrics around January 2021, followed by a strong recovery trend through subsequent periods. The close alignment of reported and adjusted figures post-2021 suggests effective management of annual reported and deferred income tax adjustments. The impressive recovery in ROE underscores improved profitability and efficient equity utilization in the latter years.

Net Income Trends

Reported net income experienced significant fluctuation over the periods, starting at 3,272 million USD in early 2020, dropping sharply to 90 million USD in early 2021, then recovering consistently to reach 4,864 million USD by early 2025. Adjusted net income follows a similar pattern but presents a negative value of -142 million USD in early 2021, indicating the impact of adjustments related to deferred income tax or unusual items during that period. From 2022 onwards, adjusted net income demonstrates steady growth, closely paralleling reported figures and suggesting a recovery phase and improved earnings quality.

Total Assets Trends

Reported total assets show an overall increasing trend over the six-year period, rising from 24,145 million USD in 2020 to 31,749 million USD in 2025. There was a peak in early 2021 at 30,814 million USD, followed by a slight decrease in the next two years before increasing again. Adjusted total assets display a very similar trend and magnitude, reflecting that adjustments made to total assets were minimal and consistent over time. The general upward trend indicates asset growth despite some fluctuations.

Return on Assets (ROA) Trends

Reported ROA dropped drastically from 13.55% in 2020 to only 0.29% in early 2021, mirroring the sharp decline in net income during that period. It then steadily improved, reaching 15.32% by early 2025, reflecting increasing profitability relative to asset base. Adjusted ROA demonstrates a more negative dip, going down to -0.46% in early 2021, further indicating that adjustments negatively impacted profitability during that year. From 2022 forward, adjusted ROA recovers and remains slightly higher than reported ROA, ending at 15.48% in 2025, which indicates that the adjustments generally have a positive impact on the measured efficiency in latter years.

Insights on Adjustments

The gap between reported and adjusted figures in net income and ROA is most notable in 2021, where adjustments lead to a negative net income and ROA, pointing to significant deferred tax or other accounting effects that diminished profitability for that period. From 2022 onwards, the difference narrows, and adjustments appear to support a higher and more stable profitability measurement. Adjustments to total assets are minimal and consistent, indicating that asset valuation changes are less significant for overall reporting.

Overall Summary

The data reveal a strong recovery after a significant downturn in 2021, with income and profitability metrics improving steadily through 2025. Asset growth is moderate but consistent. Adjustments primarily influence reported profitability metrics rather than asset values and seem to emphasize the impact of tax or accounting policies in transitional periods. By the end of the examined period, both reported and adjusted figures indicate robust financial performance and efficient asset utilization.