For the first half of fiscal 2002, net income was $236 million and diluted earnings per share were $.84, as compared to $245 million, or $.83 per share last year. Net sales for the six month period reached $4.8 billion, a 9% increase over $4.4 billion last year. Year-to-date consolidated comparable store sales increased 1% over last year.
Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, "Although our second quarter results were below our original expectations, the strong underlying fundamentals of our business have once again enabled us to compete effectively in what has been a very difficult and highly promotional retail environment. Our disciplined inventory management strategies have allowed us to take advantage of the many opportunities in the marketplace and continue to offer compelling values to our customers. The trend of our business going into the second half of the year is positive as we have seen strengthening in important apparel categories.
"At The Marmaxx Group, the combined entity of T.J. Maxx and Marshalls, comparable store sales for the second quarter increased by 2%. Second quarter operating profit rose slightly above last year. We were pleased that our business gained momentum in June and July after a slow start due to unseasonably cool weather in May. Apparel categories in general have picked up considerably. We are particularly pleased with the strong performance of junior's and children's apparel which bodes well for the back-to-school season. We are on track to achieve our plans to net 75 new stores between T.J. Maxx and Marshalls this year.
"Winners' Apparel, in Canada, posted a below-plan 3% comparable store sales increase in the second quarter and operating income was below last year. Winners' profit performance was affected by the negative margin impact of running with higher than anticipated inventories. We are focused on remedying this inventory liquidity issue in the months ahead.
"We are delighted with the immediate and strong customer response to our new Canadian home fashions concept, HomeSense. This business recorded sales during the second quarter which were 56% above what we anticipated.
"T.K. Maxx, our European division, posted an 8% comparable store sales increase over 9% growth last year and achieved a significant increase in operating income. We are seeing great performance in both new and existing T.K. Maxx stores. T.K. Maxx's popularity continues to grow and we are on track to open 30 stores this year in the U.K. and Ireland. This represents a 40% increase in T.K. Maxx's store base.
"HomeGoods posted a comparable store sales increase in the second quarter of 5% over a 5% increase last year. Profits in the second quarter were reduced by costs incurred to move HomeGoods to a liquid inventory position. We are very enthusiastic about our aggressive rollout of this chain as new stores continue to open very successfully. HomeGoods is on schedule to open 30 stores this year, growing its store base by 37%.
"A.J. Wright, one of our youngest divisions, had another successful quarter posting an above-plan 18% increase in comparable store sales over a strong gain last year. This resulted in improved bottom line performance. We remain very optimistic about expanding the A.J. Wright concept as we continue to build awareness and brand loyalty with the moderate income shopper.
"We continue to generate significant returns on investment and substantial amounts of cash. We are reinvesting a portion of these funds into our new stores, which continue to open very strongly. Our store base is increasing 12% annually on a consolidated basis and we are investing in our distribution center network to support this growth. In addition, beyond funding our growth, our strong cash flow enables us to aggressively execute our share repurchase program. During the second quarter, we spent a total of $127 million and retired 4 million shares. Over the last 6 months, we have spent a total of $260 million, retiring 8.5 million shares."
English concluded, "We are pleased with the positive sales trends we saw in the latter half of the quarter. As we begin the back- to-school selling season, key merchandise categories are performing well. Further, our overall inventories are in excellent shape, with great liquidity. This liquidity enables us to continue to buy smarter and offer the best value to our customers."
The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The Company operates 661 T.J. Maxx, 556 Marshalls, 99 HomeGoods and 31 A.J. Wright stores in the United States. In Canada, the Company operates 123 Winners and 6 HomeSense stores, and in Europe, 83 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, Inc. will hold a conference call with stock analysts to discuss the Company's fiscal 2002 second quarter results and its business. A real-time webcast of the call will be available at www.tjx.com through August 21, 2001. A replay of the call will also be available by dialing 888-446-2545 through August 21, 2001. Additionally, TJX will release its August 2001 sales results on September 6, 2001 at approximately 8:15 a.m. EST. Concurrent with the press release, a recorded message with more detailed information regarding TJX's August 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, September 13, 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 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
July 28, July 29,
2001 2000
Net sales $ 2,487,622 $ 2,258,174
Cost of sales, including buying and
occupancy costs 1,894,704 1,702,298
Selling, general and administrative
expenses 406,442 364,474
Interest expense, net 5,688 5,074
Income before provision for
income taxes 180,788 186,328
Provision for income taxes 68,880 72,295
Net income $ 111,908 $ 114,033
Diluted earnings per share:
Net income $ .40 $ .39
Cash dividends declared per share $ .045 $ .04
Weighted average shares for diluted
earnings per share computation 279,136,327 292,665,656
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
26 Weeks Ended
July 28, July 29,
2001 2000
Net sales $4,758,517 $4,366,290
Cost of sales, including buying
and occupancy costs 3,581,320 3,256,338
Selling, general and administrative
expenses 786,713 702,431
Interest expense, net 9,904 7,827
Income before provision for income taxes 380,580 399,694
Provision for income taxes 145,001 155,081
Net income $ 235,579 $ 244,613
Diluted earnings per share:
Net income $ .84 $ .83
Cash dividends declared per share $ .09 $ .08
Weighted average shares for diluted
earnings per share computation 80,631,636 296,385,164
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
July 28, July 29,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $ 138.6 $ 39.4
Accounts receivable and other
current assets 133.1 137.7
Merchandise inventories 1,854.6 1,690.9
Total current assets 2,126.3 1,868.0
Property and capital leases, net of
depreciation 1,017.5 859.1
Other assets 76.8 70.4
Deferred income taxes, net 37.5 35.0
Goodwill and tradename, net of
amortization 182.1 187.9
TOTAL ASSETS $3,440.2 $3,020.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 2.9 $ 297.4
Accounts payable 898.7 767.0
Accrued expenses and other
current liabilities 420.9 430.6
Federal and state income
taxes payable 40.8 21.4
Total current liabilities 1,363.3 1,516.4
Other long-term liabilities 198.7 186.7
Long-term debt 669.4 319.4
Shareholders' equity 1,208.8 997.9
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $3,440.2 $3,020.4
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
26 Weeks Ended
July 28, July 29,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $235.6 $244.6
Depreciation and amortization 99.9 82.9
Decrease (increase) in accounts
receivable and other current assets 3.1 (46.2)
(Increase) in merchandise inventories (405.3) (455.5)
Decrease (increase) in deferred
income taxes 9.9 (11.9)
Increase in accounts payable 254.9 148.7
(Decrease) in accrued expenses and
other liabilities (78.0) (32.5)
(Decrease) in federal and state income
taxes payable (1.3) (21.7)
Other 13.0 (3.9)
Net cash provided by (used in)
operating activities 131.8 (95.5)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (171.3) (114.6)
Other (4.8) (2.4)
Net cash (used in) investing activities (176.1) (117.0)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from current year borrowings
of short-term debt, net 2.9 297.4
Proceeds from borrowings of
long-term debt 347.6 -
Payments on short-term debt outstanding
from prior year (39.0) -
Principal payments on long-term debt (.1) (100.2)
Payments for repurchase of common stock (259.8) (298.7)
Cash dividends paid (23.7) (22.2)
Other 23.0 2.5
Net cash provided by (used in) financing
activities 50.9 (121.2)
Effect of exchange rate changes on cash (.5) 1.3
Net increase (decrease) in cash and cash
equivalents 6.1 (332.4)
Cash and cash equivalents at beginning
of year 132.5 371.8
Cash and cash equivalents at end of
period $138.6 $ 39.4
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
13 Weeks Ended
July 28, July 29,
2001 2000
Net sales:
Marmaxx $2,073,938 $1,955,477
Winners (a) 156,686 131,457
T.K. Maxx 111,979 85,510
HomeGoods 111,045 67,154
A.J. Wright 33,974 18,576
--------- ---------
$2,487,622 $2,258,174
Operating income (loss):
Marmaxx 192,912 190,985
Winners (a) 11,412 15,417
T.K. Maxx 2,987 709
HomeGoods (4,006) (445)
A.J. Wright (2,976) (3,596)
--------- ---------
200,329 203,070
General corporate expense 13,201 11,016
Goodwill amortization 652 652
Interest expense, net 5,688 5,074
Income before provision for income
taxes $ 180,788 $ 186,328
Stores in operation end of period:
T.J. Maxx 661 639
Marshalls 556 519
Winners 123 106
T.K. Maxx 83 64
HomeGoods 99 60
A.J. Wright 31 19
HomeSense 6 -
Total 1,559 1,407
(a) Includes the operating results of the new HomeSense stores.
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
26 Weeks Ended
July 28, July 29,
2001 2000
Net sales:
Marmaxx $3,997,297 $3,801,881
Winners (a) 284,084 248,398
T.K. Maxx 207,511 157,986
HomeGoods 210,655 126,287
A.J. Wright 58,970 31,738
--------- ---------
$4,758,517 $4,366,290
Operating income (loss):
Marmaxx 402,320 409,258
Winners (a) 21,580 28,551
T.K. Maxx 4,259 (963)
HomeGoods (3,888) 643
A.J. Wright (7,075) (7,547)
--------- ---------
417,196 429,942
General corporate expense 25,408 21,116
Goodwill amortization 1,304 1,305
Interest expense, net 9,904 7,827
Income before provision for income
taxes $ 380,580 $ 399,694
Stores in operation end of period:
T.J. Maxx 661 639
Marshalls 556 519
Winners 123 106
T.K. Maxx 83 64
HomeGoods 99 60
A.J. Wright 31 19
HomeSense 6 -
Total 1,559 1,407
(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 second quarter ended July 28, 2001, TJX repurchased 4.0
million shares of its common stock, under its $1 billion stock
repurchase program, at a cost of $127.1 million. For the six
months ended, TJX repurchased 8.5 million shares at a cost of
$259.8 million. Since the inception of the $1 billion stock
repurchase program, TJX has repurchased 28.0 million shares at a
cost of $641.4 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.
