Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Aug. 02, 2025

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements and Notes thereto have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These Consolidated Financial Statements and Notes thereto are unaudited and, in the opinion of management, reflect all normal recurring adjustments, accruals and deferrals among periods required to match costs properly with the related revenue or activity, considered necessary by The TJX Companies, Inc. (together with its subsidiaries, “TJX”) for a fair statement of its Consolidated Financial Statements for the periods reported, all in conformity with GAAP consistently applied. All intercompany transactions have been eliminated in consolidation. Investments for which the Company exercises significant influence but does not have control are accounted for under the equity method. The Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements, including the related notes, contained in TJX’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025 (“fiscal 2025”).

These interim results are not necessarily indicative of results for the full fiscal year. TJX’s business, in common with the businesses of retailers generally, is subject to seasonal influences, with higher levels of sales and income generally realized in the second half of the year.

The February 1, 2025 balance sheet data was derived from audited Consolidated Financial Statements and does not include all disclosures required by GAAP.

Fiscal Year

TJX’s fiscal year ends on the Saturday nearest to the last day of January of each year. The current fiscal year ends January 31, 2026 (“fiscal 2026”) and is a 52-week fiscal year. Fiscal 2025 was a 52-week fiscal year. “Fiscal 2027” and “fiscal 2028” will both be 52-week fiscal years and will end January 30, 2027 and January 29, 2028, respectively.

Use of Estimates

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. TJX considers its accounting policies relating to inventory valuation, reserves for uncertain tax positions and loss contingencies to be the most significant accounting policies that involve management estimates and judgments. Actual amounts could differ from these estimates, and such differences could be material.

Deferred Gift Card Revenue

The following table presents deferred gift card revenue activity:


In millions	August 2, 2025		August 3, 2024
Balance, beginning of year	$	824	$	773
Deferred revenue	861		889
Effect of exchange rate changes on deferred revenue	9		(2)
Revenue recognized	(920)		(940)
Balance, end of period	$	774	$	720

TJX recognized $476 million in gift card revenue for the three months ended August 2, 2025 and $485 million for the three months ended August 3, 2024. Gift cards are combined in one homogeneous pool and are not separately identifiable. As such, the revenue recognized consists of gift cards that were part of the deferred revenue balance at the beginning of the period as well as gift cards that were issued during the period.

Equity Investments

Multibrand Outlet Stores

During fiscal 2025, the Company completed an investment for a 49% ownership stake in Multibrand Outlet Stores S.A.P.I. de C.V. (“MOS”), through a joint venture with Grupo Axo, S.A.P.I de C.V. (“Axo”). MOS is Axo’s off-price, physical store business in Mexico and includes a total of over 200 stores for its Promoda, Reduced, and Urban Store banners. TJX has the option to increase its ownership interest in the joint venture over the long term. TJX completed this investment for $193 million, inclusive of acquisition costs, during the third quarter of fiscal 2025.

For the six months ended August 2, 2025, the carrying value of the Company’s equity investment in MOS was $186 million, which exceeds its share of MOS’ net assets by approximately $148 million. This difference primarily consists of goodwill and tradenames. Tradenames are definite-lived intangible assets and are amortized straight-line over their useful lives of 10 years. The carrying value of this equity investment is adjusted for the Company’s share of MOS’s results, tradename amortization, cumulative translation adjustments and additional capital contributions. The cumulative translation adjustment is recorded in the Consolidated Balance Sheets as a component of Accumulated other comprehensive (loss) income.

Brands for Less

During fiscal 2025, the Company completed an investment for a 35% ownership stake in privately held Brands for Less (“BFL”), representing a non-controlling, minority position. BFL currently operates over 100 stores, primarily in the UAE and Saudi Arabia, as well as an e-commerce business, and is the region’s only major off-price branded apparel, toys and home fashions retailer. TJX completed this investment for $358 million, inclusive of acquisition costs, during the fourth quarter of fiscal 2025.

For the six months ended August 2, 2025, the carrying value of the Company’s equity investment in BFL was $336 million, which exceeds its share of BFL net assets by approximately $292 million. This difference primarily consists of goodwill and a tradename. The tradename is a definite-lived intangible asset and will be amortized straight-line over the useful life of 15 years. The carrying value of this equity investment is adjusted for the Company’s share of BFL’s results and tradename amortization.

Both investments are accounted for under the equity method of accounting and are recorded in Other assets on the Consolidated Balance Sheets. TJX reports the results of its share of the investments in MOS and BFL on a one-quarter lag, as their results are not expected to be available in time to be recorded in the concurrent period. Earnings from the investments in MOS and BFL are recorded in Selling, general & administrative expenses on the Consolidated Statements of Income. The earnings from these investments did not have a material impact on the Company’s results for the six months ended August 2, 2025.

Additionally, both equity investments are evaluated for indicators of impairment on a periodic basis or whenever events or circumstances indicate the carrying amount may be other-than-temporarily impaired. If the Company concludes that there is an other-than-temporary impairment of these equity investments, it will adjust the carrying amount of the investments to the current fair value. As of August 2, 2025, the Company determined that no impairments of its equity method investments existed.

Leases

Supplemental cash flow information related to leases is as follows:


	Twenty-Six Weeks Ended
In millions	August 2, 2025		August 3, 2024
Operating cash flows paid for operating leases	$	1,091	$	1,046
Lease liabilities arising from obtaining right of use assets	$	1,047	$	1,001

Future Adoption of New Accounting Standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, the Company has reviewed the new guidance and has determined that it will either not apply to TJX or is not expected to be material to its Consolidated Financial Statements upon adoption, and, therefore, the guidance is not disclosed.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued guidance related to improvements to income tax disclosures. The new standard updates the income tax disclosure related to the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. The standard also provides for further disclosure comparability. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company will adopt this standard for the fiscal 2026 Form 10-K and is currently evaluating the impact of the adoption of this standard on its financial statement disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued new guidance to enhance the disclosure of expenses by requiring further disaggregation of relevant expenses in a separate note to the financial statements. This standard is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this adoption on its consolidated financial statement disclosures and plans to adopt this standard for the fiscal 2028 Form 10-K.

SEC Rule Changes

In March 2024, the SEC adopted new rules phasing in for fiscal years beginning on or after January 1, 2025 that will require registrants to provide certain climate-related information in their registration statements and annual reports. In April 2024, the SEC determined to voluntarily stay the final rules pending certain legal challenges. In March 2025, the SEC withdrew its defense of the rules in the pending litigation and the Company is continuing to monitor the status.

Recently Adopted Accounting Standards

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued guidance related to improvements to reportable segment disclosures. The new standard improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis to enable investors to develop more decision-useful financial analyses. The Company adopted this standard as of February 1, 2025, on a retrospective basis. Refer to Note G—Segment Information for the impact upon adoption of the new required disclosures.