For the first nine months of fiscal 2001, net income was $403 million and diluted earnings per share were $1.38, 13% greater than $1.22 per share last year. Last year's $1.22 per share is before the one-time cumulative charge for the accounting change for layaway sales. Net sales for the nine month period reached $6.8 billion, a 9% increase over $6.3 billion last year.
Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, "We are pleased with our stronger than expected third quarter results, which were achieved despite the difficult retail environment. In addition, we saw extremely successful results in our new store openings across all of our divisions."
At The Marmaxx Group, the combined entity of T.J. Maxx and Marshalls, comparable store sales for the third quarter were up 3% compared to the prior year's 5% increase. Third quarter operating profit reached $249 million. Better than expected sales, strong merchandise margins, and savings in a number of expense categories offset the impact of higher freight and distribution costs. Marmaxx increased its inventory levels at the end of the quarter in preparation for its major holiday gift giving initiative. New Marmaxx stores continue to open very profitably and the Company's plans to open 60 new Marmaxx stores this year are on schedule.
Winners, in Canada, had another excellent quarter, driven by robust sales. Winners' third quarter comparable store sales outperformed its goals and increased 9% over 7% growth last year. Operating income increased 35% over last year to $26 million during the quarter, which was above TJX's objectives. Winners continues to achieve substantial comparable store sales gains in both apparel and home fashions. This division now expects to open 17 stores this year, a 17% increase in its store base. In 2001, the Company plans to introduce a new home concept to Canada.
T.K. Maxx, in Europe, had an exceptional quarter, posting a 10% comparable store sales increase over 8% growth last year. In the third quarter, T.K. Maxx achieved $6 million in operating profit, up 105% over last year and significantly exceeding the Company's objectives. TJX believes these results speak to the strength of T.K. Maxx's popularity, as they were achieved despite the fuel crisis in the U.K., which impaired transportation during September. TJX continues to roll-out this business rapidly throughout the U.K. and Ireland and will open 20 stores this year, representing a 37% increase in its store base.
At HomeGoods, exceptional performance from its new stores largely offset below-plan comparable store sales. This led to third quarter operating income of $1 million, which was the target the Company established at the beginning of the quarter, versus $2 million achieved in the prior year. HomeGoods' third quarter comparable store sales were flat compared to last year's 17% increase. Although HomeGoods is seeing exceptional performance in its new stores, the chain is experiencing increased pressure on its distribution capacity which has affected its inventory flow to stores. While the Company seeks additional permanent distribution capacity for this burgeoning division, TJX is adding to its third party processor capacity. The Company remains enthusiastic about the future of this division, which is on schedule to open 30 stores this year, growing its store base by 59%.
A.J. Wright, TJX's newest division, continues to achieve substantial comparable store sales gains, having posted a 16% increase in the third quarter. A.J. Wright's three new stores, which were introduced in the third quarter, opened very strongly. A.J. Wright's sales trends are promising and TJX continues to be optimistic about developing A.J. Wright and expanding the concept to new markets.
During the quarter, The Company continued to execute its current $1 billion share repurchase program, funding it with the internal cash flow generated by TJX's strong operations. On a year-to- date basis, TJX purchased a total of 20.7 million shares at a cost of $396 million.
English concluded, "We are aggressively addressing the challenges that currently face our transportation and distribution capabilities. Based on November's sales thus far, we are planning our business a bit more conservatively in the fourth quarter. That said, given our year-to-date performance and our exceptional new store openings, we continue to be very confident in the strength of all our divisions."
The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The Company operates 654 T.J. Maxx stores, 533 Marshalls, 69 HomeGoods and 22 A.J. Wright stores in the United States. In Canada, the Company operates 116 Winners, and in Europe, 72 T.K. Maxx stores.
At 11:00 a.m. EST today, Edmond English, President and Chief Executive Officer of The TJX Companies, will hold a conference call with stock analysts to discuss the Company's third quarter results and prospects for the fourth quarter. A real time webcast of the call will be available at www.tjx.com. A replay of the call will also be available at www.tjx.com and at (800) 386-5111 through November 21. Additionally, the Company expects to announce its November sales results on Thursday November 30, 2000 at 8:15 a.m. EST. Concurrent with the press release, a recorded message with more detailed information regarding TJX's November sales results will be available by calling (703) 736-7248 or via the Internet at www.tjx.com. The sales recording will remain available via the phone and Internet through Thursday, December 7.
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
October 28, October 30,
2000 1999
(As Restated)
Net sales $2,461,411 $2,235,054
Cost of sales,
including buying and occupancy
costs 1,807,748 1,646,270
Selling, general and administrative
expenses 385,666 338,319
Interest expense, net 9,379 4,274
Income before income taxes and
cumulative effect of
accounting change 258,618 246,191
Provision for income taxes 100,344 94,474
Income before cumulative effect of
accounting change 158,274 151,717
Cumulative effect of accounting
change, net of income taxes - -
Net income $ 158,274 $ 151,717
Diluted earnings per share:
Income before cumulative effect
of accounting change $ .56 $ .48
Net income $ .56 $ .48
Cash dividends declared per share $ .04 $ .035
Weighted average shares for diluted
earnings per share computation 282,933,718 316,313,009
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
39 Weeks Ended
October 28, October 30,
2000 1999
(As Restated)
Net sales $6,827,701 $6,268,411
Cost of sales, including buying
and occupancy costs 5,064,086 4,650,310
Selling, general and administrative
expenses 1,088,097 979,476
Interest expense, net 17,206 5,504
Income before income taxes and
cumulative effect of
accounting change 658,312 633,121
Provision for income taxes 255,425 243,249
Income before cumulative effect of
accounting change 402,887 389,872
Cumulative effect of accounting
change, net of income taxes - (5,154)
Net Income $ 402,887 $ 384,718
Diluted earnings per share:
Income before cumulative effect
of accounting change $ 1.38 $ 1.22
Net income $ 1.38 $ 1.20
Cash dividends declared per share $ .12 $ .105
Weighted average shares for diluted
earnings per share computation 291,911,329 320,832,351
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
October 28, October 30,
2000 1999
(As Restated)
ASSETS
Current assets:
Cash and cash equivalents $ 55.5 $ 24.6
Accounts receivable and other
current assets 118.6 135.7
Merchandise inventories 1,949.7 1,677.6
Total current assets 2,123.8 1,837.9
Property, net of depreciation 878.3 823.9
Other assets 93.8 50.3
Deferred income taxes, net 41.0 32.4
Goodwill and tradename, net of
amortization 186.4 194.0
TOTAL ASSETS $ 3,323.3 $ 2,938.5
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 311.0 $ 108.0
Current installments of long-term
debt .2 100.5
Accounts payable 881.2 747.0
Accrued expenses and other current
liabilities 625.8 609.0
Federal and state income taxes payable 88.6 66.5
Total current liabilities 1,906.8 1,631.0
Long-term debt 319.4 120.1
Shareholders' equity 1,097.1 1,187.4
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 3,323.3 $ 2,938.5
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
39 Weeks Ended
October 28, October 30,
2000 1999
(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 402.9 $ 384.7
Cumulative effect of accounting
change, net of income taxes - 5.2
Depreciation and amortization 131.1 115.8
(Increase) in accounts receivable
and other current assets (27.7) (63.3)
(Increase) in merchandise inventories (720.1) (476.9)
Increase in accounts payable 265.6 129.9
Increase (decrease) in accrued
expenses and other current liabilities 21.6 (4.4)
Increase in federal and state income
taxes payable 46.7 14.8
Other (26.6) (22.0)
Net cash provided by operating
activities 93.5 83.8
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (181.3) (182.4)
Other (9.4) (4.2)
Net cash (used in) investing activities (190.7) (186.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term
debt, net 311.0 108.0
Principal payments on long-term debt (100.3) (.4)
Payments for repurchase of common stock (400.3) (418.2)
Cash dividends paid (33.5) (31.9)
Other 4.0 8.7
Net cash (used in) financing activities (219.1) (333.8)
Net (decrease) in cash and cash
equivalents (316.3) (436.6)
Cash and cash equivalents at beginning
of year 371.8 461.2
Cash and cash equivalents at end of
period $ 55.5 $ 24.6
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
13 Weeks Ended
October 28, October 30,
2000 1999
(As Restated)
Net sales:
Marmaxx $2,107,248 $1,965,553
Winners 161,019 131,472
T.K. Maxx 96,239 74,401
A.J. Wright 19,867 10,674
Off-price family apparel stores 2,384,373 2,182,100
Off-price home fashion
stores - HomeGoods 77,038 52,954
$2,461,411 $2,235,054
Operating income (loss):
Marmaxx $ 248,992 $ 234,605
Winners 26,018 19,222
T.K. Maxx 5,646 2,750
A.J. Wright (4,002) (3,777)
Off-price family apparel stores 276,654 252,800
Off-price home fashion
stores - HomeGoods 1,211 2,041
277,865 254,841
General corporate expense 9,216 3,724
Goodwill amortization 652 652
Interest expense, net 9,379 4,274
Income before income taxes and
cumulative effect of accounting
change $ 258,618 $ 246,191
Stores in operation end of period:
T.J. Maxx 654 625
Marshalls 533 498
Winners 116 99
HomeGoods 69 46
T.K. Maxx 72 53
A.J. Wright 22 11
Total 1,466 1,332
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
39 Weeks Ended
October 28, October 30,
2000 1999
(As Restated)
Net sales:
Marmaxx $5,909,129 $5,585,694
Winners 409,417 329,665
T.K. Maxx 254,225 192,153
A.J. Wright 51,605 26,745
Off-price family apparel stores 6,624,376 6,134,257
Off-price home fashion
stores - HomeGoods 203,325 134,154
$6,827,701 $6,268,411
Operating income (loss):
Marmaxx $ 658,250 $ 635,917
Winners 54,569 40,070
T.K. Maxx 4,683 147
A.J. Wright (11,549) (10,516)
Off-price family apparel stores 705,953 665,618
Off-price home fashion
stores - HomeGoods 1,854 386
707,807 666,004
General corporate expense 30,332 25,422
Goodwill amortization 1,957 1,957
Interest expense, net 17,206 5,504
Income before income taxes and
cumulative effect of accounting
change $ 658,312 $ 633,121
Stores in operation end of period:
T.J. Maxx 654 625
Marshalls 533 498
Winners 116 99
HomeGoods 69 46
T.K. Maxx 72 53
A.J. Wright 22 11
Total 1,466 1,332
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 periods 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 nine months ended October 28, 2000, the Company repurchased
20.7 million shares at a cost of $396.1 million. Since the
inception of the $1 billion stock repurchase program, the Company
has repurchased 18.0 million shares at a cost of $342.9 million.
3. The periods ending October 30, 1999, include a pre-tax gain of
$8.5 million associated with the Company's receipt of common stock
resulting from the demutualization of Manulife Financial.
