Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, "We are very pleased with our first quarter results, which were achieved over an extraordinarily strong first quarter last year, in which we achieved 58% earnings per share growth over the comparable prior year. Adverse weather conditions caused us to fall slightly below this year's sales goal for the quarter, but where weather was favorable, we beat our objectives significantly. Well-managed inventories and expense control helped us attain strong margins and contributed to TJX exceeding its earnings per share target for the quarter.
"At The Marmaxx Group, the combined entity of T.J. Maxx and Marshalls, comparable store sales increased by 2% and operating income increased 5% over the prior year's strong 31% increase. We continue to execute the fundamentals of this business extremely well. By maintaining liquid inventories and through tight expense control, Marmaxx achieved its operating margin objective, despite the unseasonably cold weather in the Northeast and Midwest regions of the United States throughout the quarter.
"Winners Apparel Ltd., in Canada, continues the excellent execution of its business, posting very strong first quarter results, which were far above our expectations. Winners achieved a comparable store sales increase of 12% over 10% growth last year. Further, operating income increased 61% over last year. We remain very pleased with the performance of this chain across all product classifications. Additionally, the comparable store sales increase of 24% in home fashions in the first quarter bodes very well for the new home concept we plan to bring to Canada in 2001.
"T.K. Maxx, in Europe, posted a 6% comparable store sales increase over 20% growth last year. We remain very pleased with our customers' response to our off-price concept at T.K. Maxx and, going forward, we will continue our rapid roll-out of this business throughout the U.K. and Ireland."
English continued, "HomeGoods posted an above-plan comparable store sales increase of 10% over an 11% increase last year. Operating income also exceeded our expectations. Our shift in merchandise focus from commodities to home fashions continues to drive customers to our stores. During the first quarter, we brought our first superstores to Puerto Rico, which were the best openings in the chain's history. We are very excited about our aggressive roll-out of the HomeGoods chain, which will further expand our presence in the booming home fashions market.
"At A.J. Wright, our newest division, we are very encouraged with business trends. A.J. Wright achieved a 25% comparable store sales increase for the quarter. During the quarter, we opened three A.J. Wright stores in the Philadelphia market very successfully. With continued strong comparable store sales gains and openings, A.J. Wright remains a great long-term growth vehicle for TJX.
"While we continue to invest heavily in growing our businesses, the significant cash generated by our high return on invested capital enables us to aggressively execute our share repurchase program as well. During the first quarter, we spent a total of $151.6 million and retired 7.4 million shares."
English concluded, "We're off to a good start in 2000, with TJX achieving solid first quarter results. Further, we ended the quarter with inventories in excellent shape, which puts us in a great position to benefit from the significant opportunities available to us throughout the rest of the year. We will continue with our aggressive growth plans for the future and are confident in our ability to achieve strong earnings growth, not only this year, but in the years ahead."
The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The Company operates 637 T.J. Maxx stores, 510 Marshalls, 55 HomeGoods and 18 A.J. Wright stores in the United States. In Canada, the Company operates 105 Winners, and in Europe, 57 T.K. Maxx stores. TJX's press releases and financial information are also available on the Internet at www.tjx.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Certain statements contained in this release are forward-looking and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: general economic conditions and consumer demand and consumer preferences and weather patterns in the U.S., Canada and Europe; competitive factors, including continuing pressure from pricing and promotional activities of competitors; impact of excess retail capacity and the availability of desirable store locations on suitable terms; the availability, selection and purchasing of attractive merchandise on favorable terms; import risks, including potential disruptions and duties, tariffs and quotas on imported merchandise, including economic and political problems in countries from which merchandise is imported; currency and exchange rate factors in the Company's foreign operations; risks in the development of new businesses and application of the Company's off-price strategies in foreign countries; acquisition and divestment activities and other factors that may be described in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
13 Weeks Ended
April 29, May 1,
2000 1999
(As Restated)
Net sales $2,108,116 $1,930,506
Cost of sales, including buying and
occupancy costs 1,554,040 1,418,792
Selling, general and administrative
expenses 337,957 310,676
Interest expense (income), net 2,753 (734)
Income before income taxes and
cumulative effect of accounting
change 213,366 201,772
Provision for income taxes 82,786 79,498
Income before cumulative effect of
accounting change 130,580 122,274
Cumulative effect of accounting change,
net of income taxes - (5,154)
Net income $ 130,580 $ 117,120
Diluted earnings per share:
Income before cumulative effect
of accounting change $ .44 $ .38
Net income $ .44 $ .36
Cash dividends declared per share $ .04 $ .035
Weighted average shares for diluted
earnings per share computation 300,044,959 325,296,145
Stores in operation end of period:
T.J. Maxx 637 613
Marshalls 510 480
Winners 105 90
HomeGoods 55 38
T.K. Maxx 57 42
A.J. Wright 18 10
Total 1,382 1,273
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
April 29, May 1,
2000 1999
ASSETS (As Restated)
Current assets:
Cash and cash equivalents $ 236.0 $ 309.4
Accounts receivable and other
current assets 121.1 107.7
Merchandise inventories 1,560.3 1,464.0
Total current assets 1,917.4 1,881.1
Property, net of depreciation 843.7 763.8
Other assets 60.3 44.0
Deferred income taxes, net 29.0 27.4
Goodwill and tradename, net of
amortization 189.4 196.9
TOTAL ASSETS $ 3,039.8 $ 2,913.2
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 10.2 $ 10.6
Current installments of
long-term debt 100.3 .7
Accounts payable 837.4 771.7
Accrued expenses and other current
liabilities 570.9 601.4
Federal and state income taxes payable 112.7 101.7
Total current liabilities 1,631.5 1,486.1
Long-term debt 319.4 220.3
Shareholders' equity 1,088.9 1,206.8
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 3,039.8 $ 2,913.2
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
13 Weeks Ended
April 29, May 1,
2000 1999
(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 130.6 $ 117.1
Cumulative effect of accounting
change, net of income taxes - 5.2
Depreciation and amortization 40.6 37.2
(Increase) in accounts receivable and
other current assets (30.1) (35.1)
(Increase) in merchandise inventories (330.7) (263.3)
Increase in accounts payable 221.7 154.6
(Decrease) in accrued expenses and
other current liabilities (47.7) (36.5)
Increase in federal and state income
taxes payable 69.7 38.4
Other (1.9) (18.0)
Net cash provided by (used in) operating
activities 52.2 (.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (54.5) (43.6)
Proceeds from sale of other assets 9.2 -
Net cash (used in) investing activities (45.3) (43.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term
debt, net 10.2 10.6
Payments for repurchase of common
stock (141.4) (123.7)
Cash dividends paid (10.6) (9.7)
Other (.9) 15.0
Net cash (used in) financing
activities (142.7) (107.8)
Net (decrease) in cash and cash
equivalents (135.8) (151.8)
Cash and cash equivalents at beginning
of year 371.8 461.2
Cash and cash equivalents at end of
period $ 236.0 $ 309.4
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
13 Weeks Ended
April 29, May 1,
2000 1999
(As Restated)
Net sales:
Off-price family apparel stores $2,048,983 $1,892,233
Off-price home fashion stores 59,133 38,273
$2,108,116 $1,930,506
Operating income (loss):
Off-price family apparel stores $ 225,784 $ 210,652
Off-price home fashion stores 1,088 (666)
226,872 209,986
General corporate expense 10,100 8,296
Goodwill amortization 653 652
Interest expense (income), net 2,753 (734)
Income before income taxes and
cumulative effect of accounting
change $ 213,366 $ 201,772
The TJX Companies, Inc. Notes To Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. On February 11, 2000, the Company announced that it had adopted
the provisions of the SEC's Staff Accounting Bulletin No. 101 related
to layaway sales. The accounting change was effective as of January
31, 1999, and accordingly, the Company restated its earnings for the
first three-quarters of the fiscal year ended January 29, 2000. The
Company recorded a one-time, non-cash, after-tax charge of $5.2
million in the first quarter of fiscal 2000 for the cumulative effect
of the accounting change. The prior period presented in these
Condensed Financial Statements are restated and include the impact of
the accounting change.
2. During March 2000, the Company completed its $750 million stock
repurchase program and announced its intentions to repurchase an
additional $1 billion of common stock over several years. During the
first quarter ended April 29, 2000, the Company repurchased 7.4
million shares at a cost of $151.6 million. Since the inception of the
$1 billion stock repurchase program, the Company has repurchased 4.7
million shares at a cost of $98.3 million.
