On Nov. 14, TJX Companies (NYSE:TJX), the parent company of T.J. Maxx, released third-quarter earnings for the period ended Oct. 28.

  • The balance sheet remains strong, and working capital accounts (accounts receivable, accounts payable, and inventory) continue to track sales growth.
  • Free cash flow continues to improve dramatically over last year as the company becomes more judicious in its expansion.
  • Same-store sales increased by 6% and 76 stores were added in Q3.
  • TJX has a total of 48 ratings in CAPS, with 90% of the ratings giving TJX a thumbs up.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q3 2006

Q3 2005

Change

Sales

$4,501,073

$4,041,912

11.4%

Net Profit

$230,612

$155,325

48.5%

EPS

$0.48

$0.32

50.0%

Diluted Shares

479,491

486,495

(1.4%)



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

25.42%

24.00%

1.42

Operating Margin

8.49%

6.62%

1.87

Net Margin

5.12%

3.84%

1.28

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$341,600

$201,019

69.9%

Accounts Rec.

$335,400

$395,800

(15.3%)

Inventory

$3,246,300

$2,913,469

11.4%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$1,717,100

$1,473,777

16.5%

Long-Term Debt

$794,700

$576,038

38.0%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

$476,800

$506,600

(5.9%)

Capital Expenditures

$291,800

$401,500

(27.3%)

Free Cash Flow

$185,000

$105,100

76.0%



Find out why Fools always follow the money.

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At the time of publication,Nathan Parmelee had no positions in any of the companies mentioned. Fool rules are here.