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TJX Companies – A Profitable Business Structure

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Apr. 9 2015, Updated 12:38 p.m. ET

Key business segments

TJX Companies (TJX) operates through the following four divisions:

  • Marmaxx
  • HomeGoods
  • TJX Canada
  • TJX Europe

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Segment profitability

Among TJX Companies’ (TJX) business segments, Marmaxx is the largest. It consists of 2,094 stores under the T.J. Maxx and Marshalls brands in the United States.

In fiscal 2015, ending January 31, 2015, the Marmaxx segment accounted for 64.3% of the company’s total net sales of $29.0 billion and 69.6% of total segment profits. The Marmaxx segment’s profit margin remained unchanged at 14.6% in the year. The segment also includes six Sierra Trading Post stores, tjmaxx.com, and sierratradingpost.com.

The HomeGoods segment, which included 487 stores at the end of fiscal 2015, contributed 11.7% of net sales and 11.8% of total segment profits. The segment’s profit margin improved to 13.6% compared to 12.9% due to increased same-store sales and higher merchandise margins.

The US business of TJX Companies competes with the likes of Ross Stores (ROST), Burlington Stores (BURL), and Nordstrom (JWN) Rack stores. As of January 31, 2015, Ross Stores had 1,362 stores in the United States, and Burlington Stores had 541.

Luxury department store Nordstrom had 167 off-price Nordstrom Rack stores as of March 16, 2015. The consumer discretionary (XLY) sector, which includes retailers and department stores, makes up 18.8% of the iShares Russell 1000 Growth ETF (IWF).

In the next part of this series, we’ll take a look at TJX Companies’ two international segments.

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