For the first half of fiscal 2003, net sales were $5.4 billion, 14% over last year, and year-to-date consolidated comparable store sales increased 4% over last year. Net income was $277 million and diluted earnings per share were $.51, 21% above $.42 per share last year.
Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, "We are pleased with our second quarter results. Our disciplined inventory management enabled all of our businesses to achieve strong merchandise margins and each of our divisions met or exceeded our profit objectives. We continue to find plenty of opportunities in the marketplace and our inventory liquidity positions us extremely well to capitalize upon them and drive business in the second half of the year.
"At The Marmaxx Group, the combined entity of T.J. Maxx and Marshalls, second quarter sales increased 6% and comparable store sales were up 1%. Operating income grew by 10%. Both operating income and operating margin at Marmaxx exceeded our expectations due to very strong merchandise margins. Our new stores continue to perform extremely well and we are on track to net 74 new stores between T.J. Maxx and Marshalls this year.
"Winners, in Canada, had a very solid quarter, posting an overall sales increase of 18% with comparable store sales increasing by 8% in local currency. Operating income rose by 43% over last year as fresh and exciting merchandise assortments spurred sales and drove profits at this division. Store openings at Winners remain on track to expand its store base to 146 in 2002. Also, we continue to be delighted with the positive customer response to our new Canadian home fashions concept, HomeSense.
"T.K. Maxx, our European division, had a very strong quarter, increasing sales by 41% and posting comparable store sales of 4% in local currency over last year. Operating income at this division more than doubled over last year and exceeded our expectations. T.K. Maxx showed substantial improvement in its inventory management during the quarter, leading to a significant increase in merchandise margins and operating income. We saw continued strength in both new and existing T.K. Maxx stores and we are on track to open 22 stores this year in the U.K. and Ireland.
"HomeGoods had an excellent second quarter, posting a 41% increase in sales and a 5% increase in comparable store sales. Operating income at HomeGoods was well ahead of our goal and substantially better than last year. These results were driven by this division's solid execution of its merchandising and inventory strategies. HomeGoods is on schedule to net 30 new stores this year, growing its store base by 27%.
"A.J. Wright, one of our youngest divisions, had another successful quarter, posting a 10% increase in comparable store sales over a strong gain last year as well as an on-plan bottom line. This division's popularity continues to grow as it rapidly gains recognition among moderate-income shoppers. We remain on track to expand A.J.Wright's store base by 67% this year.
"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 11% annually on a consolidated basis. 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 $180 million and retired 9.5 million shares of TJX stock. Over the last 6 months, we have spent a total of $282 million, retiring 14.7 million shares."
English concluded, "There are several factors that give us confidence that we will continue to meet our objectives as we move through the back half of the year. Our new stores continue to perform extremely well, with the vast majority of those opened in the first half of the year exceeding our expectations. Inventories at all of our divisions are in excellent shape, giving us the ability to offer exciting merchandise at great values. We continue to see an abundance of great opportunities in the marketplace. Our track record shows that in softer economic times, we tend to attract new customers as they seek our compelling values."
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, 600 Marshalls, 132 HomeGoods and 56 A.J. Wright stores in the United States. In Canada, the Company operates 137 Winners and 11 HomeSense stores, and in Europe, 113 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, Inc. will hold a conference call with stock analysts to discuss the Company's fiscal 2003 second quarter results and its business. A real-time webcast of the call will be available at www.tjx.com through August 20, 2002. A replay of the call will also be available by dialing 800-925-3285 through August 20, 2002. Additionally, TJX will release its August 2002 sales results on September 5, 2002 at approximately 8:15 a.m. EDT. 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 12, 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
July 27, July 28,
2002 2001
Net sales $ 2,765,089 $ 2,487,622
Cost of sales, including buying
and occupancy costs 2,078,736 1,894,704
Selling, general and administrative
expenses 469,528 406,442
Interest expense, net 5,963 5,688
Income before provision for income taxes 210,862 180,788
Provision for income taxes 81,235 68,880
Net income $ 129,627 $ 111,908
Diluted earnings per share:
Net income $ .24 $ .20
Cash dividends declared per share $ .03 $ .0225
Weighted average shares for diluted
earnings per share computation 542,224,422 558,272,654
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
26 Weeks Ended
July 27, July 28,
2002 2001
Net sales $ 5,430,776 $ 4,758,517
Cost of sales, including buying
and occupancy costs 4,067,566 3,581,320
Selling, general and administrative
expenses 902,544 786,713
Interest expense, net 12,157 9,904
Income before provision for income taxes 448,509 380,580
Provision for income taxes 171,779 145,001
Net income $ 276,730 $ 235,579
Diluted earnings per share:
Net income $ .51 $ .42
Cash dividends declared per share $ .06 $ .045
Weighted average shares for diluted
earnings per share computation 544,711,559 561,263,272
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
July 27, July 28,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $ 292.6 $ 138.6
Accounts receivable and other current assets 212.1 140.1
Current deferred income taxes 13.4 32.0
Merchandise inventories 1,771.4 1,854.6
Total current assets 2,289.5 2,165.3
Property and capital leases, net of depreciation 1,267.2 1,017.5
Other assets 78.3 71.4
Non-current deferred income taxes, net 6.5 5.5
Goodwill and tradename, net of amortization 179.1 182.1
TOTAL ASSETS $ 3,820.6 $ 3,441.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ -- $ 2.9
Accounts payable 962.9 898.7
Accrued expenses and other current liabilities 509.2 422.3
Income taxes payable 77.9 40.8
Total current liabilities 1,550.0 1,364.7
Other long-term liabilities 271.0 198.9
Long-term debt 675.8 669.4
Shareholders' equity 1,323.8 1,208.8
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,820.6 $ 3,441.8
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
26 Weeks Ended
July 27, July 28,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 276.7 $ 235.6
Depreciation and amortization 101.5 99.9
Deferred income tax provision 19.1 9.9
(Increase) decrease in accounts
receivable and other current assets (52.6) 3.1
(Increase) in merchandise inventories (302.0) (405.3)
Increase in accounts payable 194.8 254.9
Increase (decrease) in income taxes payable 36.0 (1.3)
(Decrease) in accrued expenses and
other liabilities (24.9) (78.0)
Other, net (.6) 13.0
Net cash provided by operating activities 248.0 131.8
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (158.9) (171.3)
Other .3 (4.8)
Net cash (used in) investing activities (158.6) (176.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term
debt, net -- 2.9
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 (274.5) (259.8)
Cash dividends paid (28.4) (23.7)
Other 13.3 22.9
Net cash (used in) provided by
financing activities (289.6) 50.9
Effect of exchange rate changes on cash -- (.5)
Net (decrease) increase in cash and
cash equivalents (200.2) 6.1
Cash and cash equivalents at beginning of year 492.8 132.5
Cash and cash equivalents at end of period $ 292.6 $ 138.6
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
13 Weeks Ended
July 27, July 28,
2002 2001
Net sales:
Marmaxx $ 2,206,050 $ 2,073,938
Winners (a) 185,000 156,686
T.K. Maxx 157,524 111,979
HomeGoods 156,781 111,045
A.J. Wright 59,734 33,974
$ 2,765,089 $ 2,487,622
Operating income (loss):
Marmaxx $ 211,379 $ 192,912
Winners (a) 16,270 11,412
T.K. Maxx 6,814 2,987
HomeGoods 1,900 (4,006)
A.J. Wright (3,066) (2,976)
233,297 200,329
General corporate expense 16,472 13,201
Goodwill amortization -- 652
Interest expense, net 5,963 5,688
Income before provision for income taxes $ 210,862 $ 180,788
Stores in operation end of period:
T.J. Maxx 701 661
Marshalls 600 556
Winners 137 123
HomeSense 11 6
T.K. Maxx 113 83
HomeGoods 132 99
A.J. Wright 56 31
Total 1,750 1,559
(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 27, July 28,
2002 2001
Net sales:
Marmaxx $ 4,378,937 $ 3,997,297
Winners (a) 347,328 284,084
T.K. Maxx 287,283 207,511
HomeGoods 307,615 210,655
A.J. Wright 109,613 58,970
$ 5,430,776 $ 4,758,517
Operating income (loss):
Marmaxx $ 461,483 $ 402,320
Winners (a) 29,336 21,580
T.K. Maxx 3,040 4,259
HomeGoods 5,962 (3,888)
A.J. Wright (6,203) (7,075)
493,618 417,196
General corporate expense 32,952 25,408
Goodwill amortization -- 1,304
Interest expense, net 12,157 9,904
Income before provision for income taxes $ 448,509 $ 380,580
Stores in operation end of period:
T.J. Maxx 701 661
Marshalls 600 556
Winners 137 123
HomeSense 11 6
T.K. Maxx 113 83
HomeGoods 132 99
A.J. Wright 56 31
Total 1,750 1,559
(a) Includes the operating results of the new 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 second quarter ended July 27, 2002, TJX completed its
$1 billion stock repurchase program and announced that its Board
of Directors had approved a new multi-year program for the
repurchase of an additional $1 billion of TJX common stock. During
the six months ended July 27, 2002, TJX has repurchased 14.7
million shares (adjusted for the two-for-one stock split) of its
common stock, under its stock repurchase programs, at a cost of
$282.3 million. During the second quarter ended July 27, 2002, TJX
repurchased 9.5 million shares (post split) of its common stock
for a cost of $180.3 million.
3. Certain amounts in the prior period's financial statements have
been reclassified to be consistent with the current year's
presentation.
