Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, "Our first quarter performance was adversely affected by the unseasonable and harsh weather that prevailed throughout much of the United States and Canada in February and March. This caused sales to fall short of our objectives and led to greater than expected markdowns, which affected our bottom line. However, we were pleased to see sales rebound in April in concert with more seasonable weather. Importantly, during the first quarter, we were extremely disciplined in our inventory management, maintaining our liquidity and strong open-to-buy position, which is paramount to the health of our business.
"At The Marmaxx Group, the combined entity of T.J. Maxx and Marshalls, comparable store sales were flat against a 2% gain last year. Operating income was $209 million versus $218 million last year. Operating margin was 10.9% of sales. Marmaxx did a good job of managing inventories in a challenging retail environment, maintaining liquidity, which enabled these chains to take advantage of the exceptional off-price buys in the marketplace. We are very pleased with our current merchandise assortments in T.J. Maxx and Marshalls stores, which are fresh and exciting with new spring and summer fashions arriving every week at great values.
"In Canada, harsh weather persisted throughout much of the quarter and impacted Winners' comparable store sales, which increased 3% over a very strong 12% gain last year. As expected, Winners' profitability was also affected by the start up costs from the opening of HomeSense. Winners' operating income was $10 million and operating margin was 8% for the quarter, which were below prior year levels. We are very enthusiastic about HomeSense, which had an extremely encouraging start. This chain produced the strongest launch we've experienced with any of our new divisions. Ultimately, we believe HomeSense has the potential to be a 60-80 store chain.
"T.K. Maxx, in Europe, posted an 8% comparable store sales increase over 6% growth last year. Strong customer response at T.K. Maxx continues to drive the exceptional results we achieve at this business. T.K. Maxx earned over $1 million in the first quarter, exceeding our expectations and prior year results. We remain enthusiastic about expanding the T.K. Maxx division throughout the U.K. and Ireland, which we believe can ultimately support at least 250 stores.
"HomeGoods' comparable store sales gains in the first quarter benefited from the progress we have made with this division's distribution issues. HomeGoods' comparable store sales increased 4% over a 10% gain in the prior year. We continue to be pleased with customer response to HomeGoods as well as the ongoing strength of our new store openings. We are on track to open a major distribution center in the Midwest for HomeGoods, which will further bolster this chain's distribution capacity.
"A.J. Wright had an excellent quarter, posting a comparable store sales increase of 22% over a 25% increase last year. Both A.J. Wright's sales and profitability exceeded our expectations. We are very pleased with A.J. Wright's progress as we continue to develop our merchandise assortment and marketing for this chain. A.J. Wright had its strongest spring opening to date in March, which signals that this chain is beginning to take hold as more customers are learning about A.J. Wright. Long-term, we continue to view A.J. Wright as a meaningful expansion opportunity for TJX.
"While we continue to invest in our accelerated store opening program and the infrastructure needed to support it, we also pursued our share repurchase program aggressively. During the first quarter, we spent a total of $133 million and retired 4.5 million shares."
English concluded, "With the bulk of the year ahead of us, we are in a great inventory position to continue to take advantage of the abundance of off-price buys in the marketplace, pass great values onto our customers and compete effectively in promotional environments. I am very pleased with the continued strong customer acceptance of our off-price concepts across all our divisions and remain enthusiastic about our accelerated store opening program of 12% annual growth over the next several years."
The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The Company operates 665 T.J. Maxx stores, 546 Marshalls, 93 HomeGoods and 28 A.J. Wright stores in the United States. In Canada, the Company operates 123 Winners and 4 HomeSense stores, and in Europe, 76 T.K. Maxx stores. TJX's press releases and financial information are also available on the Internet at www.tjx.com.
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 fiscal 2002 first quarter results and its business. A real time webcast of the call will be available at www.tjx.com through May 22, 2001. A replay of the call will also be available by dialing 800-327-0535 through May 22, 2001. Additionally, TJX will release its May 2001 sales results on June 7, 2001 at approximately 8:15 a.m. EST. Concurrent with the press release, a recorded message with more detailed information regarding TJX's May sales results and its business will be available by calling (703) 736-7248 or via the Internet at www.tjx.com. That recording will remain available via the phone and Internet through Thursday, June 14, 2001.
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 preferences; weather patterns in areas where the Company has concentrations of stores; competitive factors, including pressure from pricing and promotional activities of competitors; the impact of excess retail capacity and the availability of desirable store and distribution center locations on suitable terms; recruiting quality sales associates; the availability, selection and purchasing of attractive merchandise on favorable terms; potential disruptions in supply and duties, tariffs and quotas on imported merchandise, as well as economic and political problems in countries from which merchandise is imported; currency and exchange rate factors in foreign operations; expansion of the Company's store base, development of new businesses and application of the Company's off-price strategies in foreign countries; the Company's acquisition and divestiture activities; and other factors that are or 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 28, April 29,
2001 2000
Net sales $2,270,895 $2,108,116
Cost of sales, including buying and
occupancy costs 1,686,616 1,554,040
Selling, general and administrative
expenses 380,271 337,957
Interest expense, net 4,216 2,753
Income before provision for income
taxes 199,792 213,366
Provision for income taxes 76,121 82,786
Net income $ 123,671 $ 130,580
Diluted earnings per share:
Net income $ .44 $ .44
Cash dividends declared per share $ .045 $ .04
Weighted average shares for diluted
earnings per share computation 282,128,494 300,044,959
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
April 28, April 29,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $ 304.7 $ 236.0
Accounts receivable and other
current assets 170.4 121.1
Merchandise inventories 1,642.7 1,560.3
Total current assets 2,117.8 1,917.4
Property, net of depreciation 925.6 843.7
Other assets 77.0 60.3
Deferred income taxes, net 48.5 29.0
Goodwill and tradename, net of
amortization 183.5 189.4
TOTAL ASSETS $ 3,352.4 $ 3,039.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 13.7 $ 10.2
Current installments of long-term
debt .1 100.3
Accounts payable 745.0 837.4
Accrued expenses and other
current liabilities 447.3 388.1
Federal and state income taxes payable 97.5 112.7
Total current liabilities 1,303.6 1,448.7
Other long-term liabilities 166.7 182.8
Long-term debt 668.1 319.4
Shareholders' equity 1,214.0 1,088.9
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 3,352.4 $ 3,039.8
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
13 Weeks Ended
April 28, April 29,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 123.7 $ 130.6
Depreciation and amortization 48.7 40.6
(Increase) in accounts receivable
and other current assets (34.1) (29.8)
(Increase) in merchandise inventories (193.6) (326.6)
Increase in accounts payable 101.4 219.6
(Decrease) in accrued expenses and other
current liabilities (56.5) (49.3)
Increase in federal and state income
taxes payable 55.5 69.7
Other 1.6 (3.2)
Net cash provided by operating
activities 46.7 51.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (65.3) (54.5)
Other (3.0) 6.3
Net cash (used in) investing activities (68.3) (48.2)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from current year borrowings
of short-term debt, net 13.7 10.2
Payments on short-term debt outstanding
from prior year (39.0) -
Proceeds from borrowings of long-term
debt 347.6 -
Payments for repurchase of common stock (127.9) (141.4)
Cash dividends paid (11.2) (10.6)
Other 10.9 2.0
Net cash provided by (used in) financing
activities 194.1 (139.8)
Effect of exchange rate changes on cash (.3) .6
Net increase (decrease) in cash and cash
equivalents 172.2 (135.8)
Cash and cash equivalents at beginning
of year 132.5 371.8
Cash and cash equivalents at end of
period $ 304.7 $ 236.0
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
13 Weeks Ended
April 28, April 29,
2001 2000
Net sales:
Marmaxx $1,923,359 $1,846,404
Winners (a) 127,398 116,941
T.K. Maxx 95,532 72,476
HomeGoods 99,610 59,133
A.J. Wright 24,996 13,162
$2,270,895 $2,108,116
Operating income (loss):
Marmaxx $ 209,408 $ 218,273
Winners (a) 10,168 13,134
T.K. Maxx 1,272 (1,672)
HomeGoods 118 1,088
A.J. Wright (4,099) (3,951)
216,867 226,872
General corporate expense 12,207 10,100
Goodwill amortization 652 653
Interest expense, net 4,216 2,753
Income before provision for income
taxes $ 199,792 $ 213,366
Stores in operation end of period:
T.J. Maxx 665 637
Marshalls 546 510
Winners 123 105
T.K. Maxx 76 57
HomeGoods 93 55
A.J. Wright 28 18
HomeSense 4 -
Total 1,535 1,382
(a) Includes the operating results of the new HomeSense stores.
The TJX Companies, Inc. Notes To Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. During the first quarter ended April 28, 2001, TJX repurchased
4.5 million shares of its common stock, under its $1 billion stock
repurchase program, at a cost of $132.7 million. Since the inception
of the $1 billion stock repurchase program, TJX has repurchased 24.1
million shares at a cost of $514.3 million.
2. On February 13, 2001 TJX issued $517.5 million zero coupon
convertible subordinated notes due February 2021 and raised gross
proceeds of $347.6 million. The issue price of the notes represents a
yield to maturity of 2% per year. The notes are convertible into 8.5
million shares of common stock if specified conditions are met. The
holders of the notes have the right to require TJX to purchase the
notes at the end of the first, third, sixth and twelfth year following
the issuance date. TJX intends to use the proceeds to fund an
accelerated store roll-out program, investment in its distribution
network, its common stock repurchase program and for general corporate
purposes.
3. Certain amounts in the prior period's financial statements have
been reclassified to be consistent with the current year's
presentation.
