For the first nine months of fiscal 2003, net sales reached $8.5 billion, a 13% increase over $7.5 billion last year. Year-to-date comparable store sales increased 4%. Net income was $424 million, and diluted earnings per share were $.78, a 13% increase over last year's earnings per share from continuing operations. Excluding the $10 million after-tax charge, year-to-date earnings per share increased 16% over last year's earnings per share from continuing operations.
Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, "Our third quarter results reflect several positive aspects about our business. We continue to see very strong new store openings across all of our businesses. Although comparable store sales in September were soft due to unusually warm weather, our quick reaction to clear merchandise aggressively put us in an excellent position to continue to flow fresh, exciting merchandise to our stores. This paid off with above-plan sales in October, when weather turned seasonable and positions us extremely well for the holiday season. Further, we are particularly pleased with the performance of our Winners, HomeGoods and T.K. Maxx divisions, each of which saw tremendous growth in profitability.
"At The Marmaxx Group, the combined entity of T.J. Maxx and Marshalls, comparable store sales for the third quarter increased 1%. Third quarter operating profit was $218 million, which was below the prior year. The large part of this decline is due to the previously announced charge related to four California lawsuits. Also, unseasonably warm weather hurt September sales and caused us to be very aggressive in taking markdowns. Marmaxx's business rebounded nicely in October, when temperatures turned cooler, and this division's inventories are in excellent shape which positions us well for the fourth quarter.
"Winners, in Canada, achieved a 56% increase in operating income and a very strong operating margin of 14% in the quarter. While unseasonably warm weather caused Winners' comparable store sales to increase only modestly, its top line was close to plan due to the strong performance of its newer stores. Also, much improved inventory management led to Winners' significant gains in profitability. We are very pleased with Winners' performance and continue to be pleased with our customers' response to our Canadian home concept, HomeSense."
English continued, "T.K. Maxx, in Europe, had an excellent quarter. Comparable store sales in local currency were ahead of expectations, increasing 11% over last year and new stores continued to open strongly. Operating income reached $12 million, nearly six times that of the prior year, and above our expectations. We are delighted with results at this division.
"HomeGoods also had a terrific quarter, posting a strong 8% comparable store sales increase and excellent new store performance. Operating income at HomeGoods reached $12 million, significantly outpacing our objectives and almost eight times what it achieved last year. This division is firing on all cylinders and we are excited about the momentum that HomeGoods is building.
"A.J. Wright, one of our youngest concepts, achieved a comparable store sales gain of 5% in the third quarter on top of an 18% increase in the prior year. A.J. Wright's sales and bottom line did not meet our objectives in the quarter largely because all of A.J. Wright's stores are located in regions where weather was unseasonably warm during August and September. As at Marmaxx, A. J. Wright's business rebounded strongly late in the quarter when temperatures turned seasonable. A.J. Wright's new stores continue to perform very well and we continue to be very bullish about the growth prospects of this division.
"Our businesses continue to produce more than enough cash to fund the growth of our store base and the distribution infrastructure needed to support it. Our strong cash flow also enables us to pursue our aggressive share repurchase program. During the third quarter, we spent $110 million and retired 6 million shares. Over the last nine months, we have spent $392 million, retiring 21 million shares."
English concluded, "We will continue to focus on offering our customers compelling values on a rapidly changing assortment of merchandise. We are well positioned to make the best possible buying decisions and capitalize on the abundant opportunities in the marketplace. We are confident that our customers will continue to be rewarded with fresh, high-quality merchandise at excellent values throughout the holiday shopping season and we remain very enthusiastic about our prospects for growth."
The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The Company operates 714 T.J. Maxx stores, 625 Marshalls, 139 HomeGoods and 68 A.J. Wright stores in the United States. In Canada, the Company operates 145 Winners and 15 HomeSense stores, and in Europe, 120 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 2003 third quarter results and its business. A real-time webcast of the call will be available at www.tjx.com through November 19, 2002. A replay of the call will also be available by dialing 888-568-0353 through November 19, 2002. Additionally, TJX will release its November 2002 sales results on December 5, 2002 at approximately 8:15 a.m. EST. Concurrent with the press release, a recorded message with more detailed information regarding TJX's November 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, December 12, 2002.
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 including affects of terrorist incidents and military actions 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, actual liability for House2Home, Inc. lease obligations 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 26, October 27,
2002 2001
Net sales $ 3,044,950 $ 2,741,769
Cost of sales, including buying
and occupancy costs 2,290,136 2,059,996
Selling, general and administrative
expenses 508,341 431,721
Interest expense, net 7,313 8,537
Income from continuing operations
before provision for income taxes 239,160 241,515
Provision for income taxes 91,805 92,017
Income from continuing operations 147,355 149,498
Loss related to discontinued
operations, net of income taxes -- (40,000)
Net income $ 147,355 $ 109,498
Diluted earnings per share:
Income from continuing operations $ .28 $ .27
Net income $ .28 $ .20
Cash dividends declared per share $ .03 $ .0225
Weighted average shares for diluted
earnings per share computation 532,334,846 552,159,664
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
39 Weeks Ended
October 26, October 27,
2002 2001
Net sales $ 8,475,726 $ 7,500,286
Cost of sales, including buying
and occupancy costs 6,357,702 5,641,316
Selling, general and administrative
expenses 1,410,885 1,218,434
Interest expense, net 19,470 18,441
Income from continuing operations
before provision for income taxes 687,669 622,095
Provision for income taxes 263,584 237,018
Income from continuing operations 424,085 385,077
Loss related to discontinued
operations, net of income taxes -- (40,000)
Net income $ 424,085 $ 345,077
Diluted earnings per share:
Income from continuing operations $ .78 $ .69
Net income $ .78 $ .62
Cash dividends declared per share $ .09 $ .0675
Weighted average shares for diluted
earnings per share computation 540,520,644 558,278,018
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
Oct. 26, Oct. 27,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $ 191.2 $ 76.1
Accounts receivable and other current assets 201.3 168.7
Current deferred income taxes 14.2 32.0
Merchandise inventories 2,001.5 1,990.9
Total current assets 2,408.2 2,267.7
Property and capital leases, net of depreciation 1,335.8 1,093.5
Other assets 74.1 64.0
Non-current deferred income taxes, net -- 33.1
Goodwill and tradename, net of amortization 179.1 180.6
TOTAL ASSETS $ 3,997.2 $ 3,638.9
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ -- $ 351.3
Accounts payable 1,023.7 882.6
Accrued expenses and other current liabilities 584.2 494.5
Income taxes payable 87.7 71.3
Total current liabilities 1,695.6 1,799.7
Other long-term liabilities 261.5 265.1
Long-term debt 677.8 319.4
Shareholders' equity 1,362.3 1,254.7
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,997.2 $ 3,638.9
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
39 Weeks Ended
Oct. 26, Oct. 27,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 424.1 $ 345.1
Loss relating to discontinued operations -- 40.0
Depreciation and amortization 153.7 152.4
Deferred income tax provision 28.3 8.8
(Increase) in accounts receivable and
other current assets (43.4) (22.5)
(Increase) in merchandise inventories (531.9) (544.2)
Increase in accounts payable 255.8 240.0
Increase in income taxes payable 45.7 29.1
Increase (decrease) in accrued expenses
and other liabilities 46.5 (12.9)
Other, net 14.0 23.2
Net cash provided by operating activities 392.8 259.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (280.5) (297.1)
Other .4 (5.5)
Net cash (used in) investing activities (280.1) (302.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
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 (392.3) (326.9)
Cash dividends paid (44.3) (36.0)
Other 23.9 39.8
Net cash (used in) financing activities (412.7) (14.5)
Effect of exchange rate changes on cash (1.6) 1.7
Net (decrease) in cash and cash equivalents (301.6) (56.4)
Cash and cash equivalents at beginning of year 492.8 132.5
Cash and cash equivalents at end of period $ 191.2 $ 76.1
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
13 Weeks Ended
October 26, October 27,
2002 2001
Net sales:
Marmaxx $ 2,406,662 $ 2,271,893
Winners (a) 210,165 179,797
T.K. Maxx 185,585 126,307
HomeGoods 176,279 125,181
A.J. Wright 66,259 38,591
$ 3,044,950 $ 2,741,769
Operating income (loss):
Marmaxx $ 218,439 $ 244,266
Winners (a) 29,334 18,850
T.K. Maxx 12,225 2,149
HomeGoods 11,583 1,496
A.J. Wright (5,693) (3,108)
265,888 263,653
General corporate expense 19,415 12,950
Goodwill amortization -- 651
Interest expense, net 7,313 8,537
Income from continuing operations
before provision for income taxes $ 239,160 $ 241,515
Stores in operation end of period:
T.J. Maxx 714 681
Marshalls 625 573
Winners 145 129
HomeSense 15 7
T.K. Maxx 120 99
HomeGoods 139 109
A.J. Wright 68 40
Total 1,826 1,638
(a) Includes the operating results of HomeSense stores.
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
39 Weeks Ended
October 26, October 27,
2002 2001
Net sales:
Marmaxx $ 6,785,599 $ 6,269,190
Winners (a) 557,493 463,881
T.K. Maxx 472,868 333,818
HomeGoods 483,894 335,836
A.J. Wright 175,872 97,561
$ 8,475,726 $ 7,500,286
Operating income (loss):
Marmaxx $ 679,922 $ 646,586
Winners (a) 58,670 40,430
T.K. Maxx 15,265 6,408
HomeGoods 17,545 (2,392)
A.J. Wright (11,896) (10,183)
759,506 680,849
General corporate expense 52,367 38,358
Goodwill amortization -- 1,955
Interest expense, net 19,470 18,441
Income from continuing operations
before provision for income taxes $ 687,669 $ 622,095
Stores in operation end of period:
T.J. Maxx 714 681
Marshalls 625 573
Winners 145 129
HomeSense 15 7
T.K. Maxx 120 99
HomeGoods 139 109
A.J. Wright 68 40
Total 1,826 1,638
(a) Includes the operating results of HomeSense stores.
The TJX Companies, Inc. Notes To Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. All earnings per share calculations and per share data have been
adjusted to give effect for the two-for-one stock split
distributed on May 8, 2002.
2. During the third quarter ended October 26, 2002, TJX repurchased
5.9 million shares of its common stock, for a cost of $110.1
million. During the nine months ended October 26, 2002, TJX has
repurchased 20.5 million shares of its common stock, at a cost of
$392.3 million. Through October 26, 2002, under its current $1
billion multi-year stock repurchase program, TJX has repurchased
10.8 million shares at a cost of $198.1 million. The reference to
shares repurchased above have all been effected for the
two-for-one stock split.
3. The periods ending October 26, 2002, reflect an after-tax charge
of approximately $10 million, or $.02 per diluted share, for the
cost of a tentative settlement for claims relating to four
California lawsuits. The lawsuits allege that the Company
improperly classified store managers as exempt from California
overtime laws. The suits are similar to numerous suits filed
against retailers and others with operations in California. The
settlement is subject to final negotiation and submission to the
court for approval. The pre-tax cost of $16.0 million is reflected
in selling, general and administrative expenses, with virtually
the entire amount charged to the Marmaxx operating segment.
4. Certain amounts in the prior period's financial statements have
been reclassified to be consistent with the current year's
presentation.
