Edmond English, President and Chief Executive Officer of The TJX Companies, Inc., commented, "We are very pleased with our above-plan performance this quarter which was driven by brisk customer traffic. Once again, we did an excellent job of managing inventories and maintaining liquidity in a challenging retail environment, which enabled us to take advantage of the exceptional off-price buying opportunities in the marketplace.
"The Marmaxx Group, the combined entity of T.J. Maxx and Marshalls, had an excellent quarter with above-plan sales and operating profit. Sales increased 13% and comparable store sales increased 7% over last year. Operating income was $250 million, a 19% gain over last year, and operating margin increased to 11.5% of sales. During the quarter, we saw strength in all geographic regions. In addition, apparel as well as home fashions performed extremely well. We are very pleased with our current merchandise assortments in T.J. Maxx and Marshalls stores, and the new spring and summer fashions arriving every week at great values.
"Winners in Canada also had an above-plan quarter in which sales increased 27%, comparable store sales rose 10% in local currency and operating income increased 29%. Winners also did an excellent job of managing inventories. We are very enthusiastic about the strength of our Winners business and with the continued roll-out of HomeSense, which added four new stores during the quarter and, once again, exceeded our expectations.
"T.K. Maxx, in Europe, posted an overall sales increase of 36%, but its 5% comparable store sales increase in local currency was below plan. T.K. Maxx recorded a $3.8 million operating loss in the first quarter, below our expectations and prior year results. We attribute this to merchandising issues in certain key categories which we have aggressively addressed. With the more meaningful quarters of the year ahead of T.K. Maxx, we continue to view this division's opportunities for 2002 optimistically."
English continued, "HomeGoods had a great quarter with sales rising 51% and comparable store sales gaining 11%. Operating income significantly exceeded our target and operating margin rose significantly. We continue to be pleased with customer response to HomeGoods as well as the ongoing strength of our newer stores. As our presence in the home fashions market grows, so does our enthusiasm for this unique concept and the potential of the HomeGoods chain.
"A.J. Wright had an excellent quarter, posting a sales gain of 100% and a comparable store sales increase of 21% over a 22% increase last year. Both A.J. Wright's sales and bottom line results exceeded our expectations. We are very pleased with A.J. Wright's expansion as we continue to find wide appeal for the off-price concept among more moderate-income shoppers. Long-term, we continue to view A.J. Wright as a meaningful growth vehicle for TJX.
"TJX's exceptional return on invested capital continues to provide more than enough cash for our store opening program and the infrastructure needed to support it. This cash further funded our share repurchase program. During the first quarter, we spent $102 million and retired 5.2 million shares, on a post-split basis, as we continue to aggressively pursue share repurchases."
English concluded, "We are off to a great start in 2002. Looking ahead, we view our inventory liquidity as the key to continuing to offer our customers the best quality merchandise at the best values. By maintaining large open-to-buy positions we can stay in front of market trends, take advantage of the outstanding buying opportunities and pass those values on to customers in the form of fresh, exciting merchandise. I am very pleased with the strong customer acceptance that our off-price concepts are receiving across all our divisions and remain enthusiastic about our ability to do well in both healthy and challenging economic environments."
The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The Company operates 701 T.J. Maxx, 589 Marshalls, 125 HomeGoods and 52 A.J. Wright stores in the United States. In Canada, the Company operates 137 Winners and 11 HomeSense stores, and in Europe, 105 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. EDT 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 2003 first quarter results and its business. A real-time webcast of the call will be available at www.tjx.com through May 21, 2002. A replay of the call will also be available by dialing 800-328-8413 through May 21, 2002. Additionally, TJX will release its May 2002 sales results on June 6, 2002 at approximately 8:15 a.m. EDT. 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 13, 2002.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Certain statements contained in this report 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 including effects of terrorist incidents and military actions and consumer demand and preferences; weather patterns in areas where we have 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; our ability to effectively manage inventory levels; 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 our foreign operations; expansion of our store base, development of new businesses and application of our off-price strategies in foreign countries; our acquisition and divestiture activities; our ultimate liability with respect to leases relating to discontinued operations including indemnification and other factors affecting or mitigating our liability; and other factors that are or may be described in the Company's filings with the Securities and Exchange Commission. We do not undertake to publicly update or revise our 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 27, April 28,
2002 2001
Net sales $2,665,687 $2,270,895
Cost of sales, including buying
and occupancy costs 1,988,830 1,686,616
Selling, general and administrative expenses 433,016 380,271
Interest expense, net 6,194 4,216
Income before provision for income taxes 237,647 199,792
Provision for income taxes 90,544 76,121
Net income $ 147,103 $ 123,671
Diluted earnings per share:
Net income $ .27 $ .22
Cash dividends declared per share $ .03 $ .0225
Weighted average shares for diluted
earnings per share computation 547,122,216 564,256,988
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
April 27, April 28,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $ 516.9 $ 304.7
Accounts receivable and other current assets 209.7 177.6
Current deferred income taxes 12.7 44.0
Merchandise inventories 1,528.8 1,642.7
Total current assets 2,268.1 2,169.0
Property and capital leases, net of
depreciation 1,220.4 925.6
Other assets 81.1 70.7
Non-current deferred income taxes, net 23.4 4.5
Goodwill and tradename, net of amortization 179.1 183.5
TOTAL ASSETS $3,772.1 $3,353.3
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ - $ 13.7
Accounts payable 858.2 745.0
Accrued expenses and other current
liabilities 467.6 448.3
Income taxes payable 115.1 97.5
Total current liabilities 1,440.9 1,304.5
Other long-term liabilities 274.0 166.7
Long-term debt 673.8 668.1
Shareholders' equity 1,383.4 1,214.0
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $3,772.1 $3,353.3
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
13 Weeks Ended
April 27, April 28,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $147.1 $123.7
Depreciation and amortization 49.4 48.7
Deferred income tax provision (benefit) 2.6 (1.1)
(Increase) in accounts receivable and
other current assets (50.4) (34.1)
(Increase) in merchandise inventories (66.2) (193.6)
Increase in accounts payable 93.8 101.4
Increase in income taxes payable 73.3 55.5
(Decrease) in accrued expenses and
other liabilities (60.2) (56.5)
Other, net (2.0) 2.7
Net cash provided by operating activities 187.4 46.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (70.8) (65.3)
Other .2 (3.0)
Net cash (used in) investing activities (70.6) (68.3)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term
debt, net - 13.7
Proceeds from borrowings of long-term debt - 347.6
Payments on short-term debt outstanding
from prior year - (39.0)
Payments for repurchase of common stock (90.9) (127.9)
Cash dividends paid (12.2) (11.2)
Other 9.7 10.9
Net cash (used in) provided by financing
activities (93.4) 194.1
Effect of exchange rate changes on cash .7 (.3)
Net increase in cash and cash equivalents 24.1 172.2
Cash and cash equivalents at beginning of year 492.8 132.5
Cash and cash equivalents at end of period $516.9 $304.7
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
13 Weeks Ended
April 27, April 28,
2002 2001
Net sales:
Marmaxx $2,172,887 $1,923,359
Winners (a) 162,328 127,398
T.K. Maxx 129,759 95,532
HomeGoods 150,834 99,610
A.J. Wright 49,879 24,996
$2,665,687 $2,270,895
Operating income (loss):
Marmaxx $ 250,104 $ 209,408
Winners (a) 13,066 10,168
T.K. Maxx (3,774) 1,272
HomeGoods 4,062 118
A.J. Wright (3,137) (4,099)
260,321 216,867
General corporate expense 16,480 12,207
Goodwill amortization - 652
Interest expense, net 6,194 4,216
Income before provision for income taxes $ 237,647 $ 199,792
Stores in operation end of period:
T.J. Maxx 701 665
Marshalls 589 546
Winners 137 123
HomeSense 11 4
T.K. Maxx 105 76
HomeGoods 125 93
A.J. Wright 52 28
Total 1,720 1,535
(a) Includes the operating results of the HomeSense stores.
The TJX Companies, Inc. Notes To Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. On April 10, 2002, TJX approved a two-for-one stock split
distributed on May 8, 2002 to shareholders of record on April 25,
2002. All earnings per share calculations and per share data have
been adjusted to give effect for the two-for-one stock split.
2. During the first quarter ended April 27, 2002, TJX repurchased
5.2 million shares (adjusted for the two-for-one stock split) of
its common stock, under its $1 billion stock repurchase program,
at a cost of $102.0 million. Since the inception of the $1
billion stock repurchase program, TJX has repurchased 70.7
million shares (adjusted for the two-for-one stock split) at a
cost of $907.7 million.
3. Certain amounts in the prior period's financial statements have
been reclassified to be consistent with the current year's
presentation.
