The TJX Companies, Inc. Reports Fiscal 2001 Year-End and Fourth Quarter Results
For the fiscal 2001 fourth quarter, diluted earnings per share were $.48, up 9% over last year's fourth quarter earnings of $.44 per share. Net income was $135 million. Net sales for the fiscal 2001 fourth quarter were $2.8 billion, up 9% over last year. Unlike many other retailers, TJX did not have a 53rd week in fiscal 2001 and, therefore, did not have the beneficial impact of an extra week in its fourth quarter.
Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, "Although we did not achieve our sales and profit objectives, the year 2000 was a solid one for The TJX Companies. We were able to achieve good growth in earnings per share in the face of a difficult retail environment. Moreover, we continue to earn a significant return on shareholders' equity, underscoring the strength of our operations and financial position. In 2000, our after-tax return on average shareholders' equity was 46%. We saw powerful customer acceptance of our off-price concepts in 2000, highlighted by another year of very strong new store openings across all our divisions. This gives us great confidence in our accelerated consolidated store opening program of 12% annual growth over the next several years."
At The Marmaxx Group, the internal combination of T.J. Maxx and Marshalls, comparable store sales for the year were up 2% compared to our 3% original plan and the prior year's 4% increase. Fiscal 2001 operating profit was $858 million or 10.4% of sales. Despite the highly promotional environment throughout most of 2000, our solid inventory management led to better-than-expected merchandise margins. This, along with savings in a number of expense categories, partially offset the impact of lower-than-planned sales. We have been particularly pleased with the continued excellent performance of our new T.J. Maxx and Marshalls stores. This strength was instrumental in our decision to accelerate our store opening plans at Marmaxx to 75 stores in 2001, versus our previous plan of 60 stores.
Winners, in Canada, had another excellent year, driven by strong sales. Winners posted an above-plan 8% comparable store sales gain in 2000 over an 8% increase last year. Operating income also surpassed our expectations, increasing 29% over last year's very strong 38% increase. We now expect to open 15 Winners stores in 2001, a 13% increase in its store base. Additionally, we plan to introduce our HomeSense division to Canada this year with seven stores. HomeSense is a HomeGoods-like concept that will offer a rapidly changing assortment of off-price home fashions to the Canadian market. Given the strong customer acceptance of HomeGoods in the U.S. as well as the wide customer appeal of Winners in Canada, we are enthusiastic about launching HomeSense.
T.K. Maxx, in Europe, had another successful year in 2000, recording a comparable store sales increase of 8% on top of a 12% increase last year. Further, in the U.K. and Ireland, T.K. Maxx earned just over $20 million in operating profit in 2000, more than twice what it earned last year. Recently, we announced we will close our three stores in the Netherlands which have not operated at the high level of profitability as T.K. Maxx stores in the U.K. and Ireland do. Netherlands operating losses and closing costs of just under $10 million are included in T.K. Maxx's divisional results and were largely offset by tax savings associated with closing the Netherlands stores. Although we are exiting the Netherlands, with our valuable learning experiences from both operational and merchandising perspectives, we continue to see continental Europe as a viable growth opportunity for T.K. Maxx. Given the significant growth and profit opportunities in the U.K. and Ireland, we will focus our immediate attention on expanding T.K. Maxx in these countries. T.K. Maxx will net 27 new stores in 2001, which will increase its store base by 36%.
HomeGoods' comparable store sales increased 3% over a 13% gain last year. Sales and profits were below plan in 2000 and HomeGoods earned $4.7 million in operating profit, a slight increase over last year's results. HomeGoods' new store openings in 2000 were stronger than we had anticipated. This placed increased pressure on HomeGoods' distribution capacity, which disrupted inventory flow and led to a top and bottom line shortfall at this division. However, customer response to the HomeGoods concept, as evidenced by the strength of its new store openings, affirms our confidence in this business. We will continue our roll-out of the chain, with 30 new stores planned for 2001, while working to address HomeGoods' distribution constraints.
A.J. Wright had a very good year, with its store base increasing by 67% from last year and comparable store sales increasing 19%. We continued to open A.J. Wright stores in several new markets in the U.S. and we are encouraged by the signs we are seeing with this developing concept. Currently, A.J. Wright plans to add 20 stores in 2001. Long-term, we continue to view A.J. Wright as a great opportunity to bring the off-price concept to the wide demographic moderate income customer.
Our strong financial position enabled us to continue to execute our $1 billion share repurchase program during the fourth quarter. During fiscal 2001, we spent $435 million, retiring over 22 million shares.
English concluded, "With widespread favorable customer response to our off-price concepts, we will be investing heavily in our store opening program and our distribution capacity to further realize the significant returns our businesses deliver. Ultimately, we believe that domestic and international markets could support over 4,000 stores from our existing concepts. Additionally, we plan to continue to execute our share buyback program. The $348 million gross proceeds from the convertible debt financing we completed in February 2001, along with our strong cash flow, will support these efforts. I remain very confident in our future growth prospects and am enthusiastic about 2001 and beyond."
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 stores, 535 Marshalls, 81 HomeGoods and 25 A.J. Wright stores in the United States. In Canada, the Company operates 117 Winners, and in Europe, 74 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 2001 year-end results and expectations for fiscal 2002. A real time webcast of the call will be available at www.tjx.com through March 7, 2001. A replay of the call will also be available by dialing 888-568-0878 through March 7, 2001. Additionally, TJX will provide a recording of more detailed divisional guidance for fiscal 2002 by calling (703) 736-7248 or via www.tjx.com, which will be available through March 7, 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
January 27, January 29,
2001 2000
Net sales $2,751,305 $2,526,936
Cost of sales, including buying and
occupancy costs 2,124,038 1,929,090
Selling, general and administrative
expenses 414,939 375,189
Interest expense, net 5,698 1,841
Income before income taxes and cumulative
effect of accounting change 206,630 220,816
Provision for income taxes 71,451 83,866
Income before cumulative effect of
accounting change 135,179 136,950
Cumulative effect of accounting change,
net of income taxes - -
Net income $ 135,179 $ 136,950
Diluted earnings per share:
Income before cumulative effect of
accounting change $ 0.48 $ 0.44
Net income $ 0.48 $ 0.44
Cash dividends declared per share $ 0.04 $ 0.035
Weighted average shares for diluted
earnings per share computations 282,515,324 308,281,445
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars in Thousands Except Per Share Amounts)
52 Weeks Ended
January 27, January 29,
2001 2000
Net sales $9,579,006 $8,795,347
Cost of sales, including buying
and occupancy costs 7,188,124 6,579,400
Selling, general and administrative
expenses 1,503,036 1,354,665
Interest expense, net 22,904 7,345
Income before income taxes and
cumulative effect of accounting
change 864,942 853,937
Provision for income taxes 326,876 327,115
Income before cumulative effect of
accounting change 538,066 526,822
Cumulative effect of accounting change,
net of income taxes - (5,154)
Net income $ 538,066 $ 521,668
Diluted earnings per share:
Income before cumulative effect of
accounting change $ 1.86 $ 1.66
Net income $ 1.86 $ 1.64
Cash dividends declared per share $ 0.16 $ 0.14
Weighted average shares for diluted
earnings per share computations 289,196,228 317,790,764
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
January 27, January 29,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $ 132.5 $ 371.8
Accounts receivable and other
current assets 136.5 99.2
Merchandise inventories 1,452.9 1,229.6
Total current assets 1,721.9 1,700.6
Property, net of depreciation 908.0 834.6
Other assets 70.0 55.8
Deferred income taxes, net 47.4 23.1
Goodwill and tradename, net of
amortization 185.0 190.9
TOTAL ASSETS $ 2,932.3 $ 2,805.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 39.0 $ -
Current installments of long-term
debt - 100.4
Accounts payable 645.7 615.7
Accrued expenses and other current
liabilities 501.9 428.1
Federal and state income taxes payable 42.2 43.0
Total current liabilities 1,228.8 1,187.2
Other long-term liabilities 165.4 179.2
Long-term debt 319.4 319.4
Shareholders' equity 1,218.7 1,119.2
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 2,932.3 $ 2,805.0
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
52 Weeks Ended
January 27, January 29,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 538.1 $ 521.7
Cumulative effect of accounting
change, net of income taxes - 5.2
Depreciation and amortization 175.8 160.4
(Increase) in accounts receivable and
other current assets (18.6) (23.7)
(Increase) in merchandise inventories (232.0) (26.9)
Increase (decrease) in accounts payable 34.1 (2.7)
Increase (decrease) in accrued expenses
and other liabilities 69.7 (14.2)
Increase (decrease) in federal and state
income taxes payable 15.3 (9.7)
Other (25.7) (14.9)
Net cash provided by operating
activities 556.7 595.2
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (257.0) (238.6)
Other (13.9) (5.8)
Net cash (used in) investing activities (270.9) (244.4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term
debt, net 39.0 -
Proceeds from borrowings of long-term
debt - 198.1
Principal payments on long-term debt (100.2) (.7)
Payments for repurchase of common stock (444.1) (604.6)
Cash dividends paid (44.7) (42.7)
Other 26.1 9.3
Net cash (used in) financing activities (523.9) (440.6)
Effect of exchange rate changes on cash (1.2) .4
Net (decrease) in cash and cash
equivalents (239.3) (89.4)
Cash and cash equivalents at beginning
of year 371.8 461.2
Cash and cash equivalents at end of
year $ 132.5 $ 371.8
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR
BUSINESS SEGMENT
(Unaudited)
(Dollars In Thousands)
13 Weeks Ended
January 27, January 29,
2001 2000
Net sales:
Marmaxx $2,319,339 $2,194,132
Winners 153,894 137,100
T.K. Maxx 134,837 106,506
HomeGoods 111,690 72,656
A.J. Wright 31,545 16,542
----------- -----------
$2,751,305 $2,526,936
Operating income (loss):
Marmaxx $ 200,108 $ 213,643
Winners 16,486 14,844
T.K. Maxx (1) 6,184 6,315
HomeGoods 2,846 4,195
A.J. Wright (3,463) (3,928)
----------- -----------
222,161 235,069
General corporate expense 9,181 11,760
Goodwill amortization 652 652
Interest expense, net 5,698 1,841
Income before income taxes and
cumulative effect of accounting
change $ 206,630 $ 220,816
Stores in operation end of period:
T.J. Maxx 661 632
Marshalls 535 505
Winners 117 100
T.K. Maxx 74 54
HomeGoods 81 51
A.J. Wright 25 15
Total 1,493 1,357
(1) Results for T.K. Maxx for the thirteen weeks ended January 27,
2001, include a charge of $6.3 million for the estimated cost of
closing its three stores in the Netherlands.
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR
BUSINESS SEGMENT
(Unaudited)
(Dollars In Thousands)
52 Weeks Ended
January 27, January 29,
2001 2000
Net sales:
Marmaxx $8,228,468 $7,779,826
Winners 563,311 466,765
T.K. Maxx 389,062 298,659
HomeGoods 315,015 206,810
A.J. Wright 83,150 43,287
---------- ----------
$9,579,006 $8,795,347
Operating income (loss):
Marmaxx $ 858,358 $ 849,560
Winners 71,055 54,914
T.K. Maxx (1) 10,867 6,462
HomeGoods 4,700 4,581
A.J. Wright (15,012) (14,444)
----------- ----------
929,968 901,073
General corporate expense 39,513 37,182
Goodwill amortization 2,609 2,609
Interest expense, net 22,904 7,345
Income before income taxes and cumulative
effect of accounting change $ 864,942 $ 853,937
Stores in operation end of period:
T.J. Maxx 661 632
Marshalls 535 505
Winners 117 100
T.K. Maxx 74 54
HomeGoods 81 51
A.J. Wright 25 15
Total 1,493 1,357
(1)Results for T.K. Maxx for the fifty-two weeks ended January 27,
2001, include a charge of $6.3 million for the estimated cost of
closing its three stores in the Netherlands.
The TJX Companies, Inc. Notes to Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. The Company decided to close the three stores operated by
T.K.Maxx in the Netherlands and has recorded a $6.3 million pre-tax
charge in the periods ended January 27, 2001. This pre-tax charge,
along with the fiscal 2001 Netherlands operating loss of $3.3 million,
were largely offset by $7.0 million of U.S. tax benefits associated
with the Company's write off of its total investment in its
2. During March 2000, the Company completed its $750 million stock
repurchase program and announced its intentions to repurchase an
additional $1 billion of its common stock over several years. During
the fiscal year ended January 27, 2001, the Company repurchased 22.2
million shares at a cost of $434.8 million. Since the inception of the
$1 billion stock repurchase program, the Company has repurchased 19.6
million shares at a cost of $381.6 million.
3. Certain amounts in the prior period's financial statements have
been reclassified to be consistent with the current year's
presentation.
4. On February 11, 2000, the Company adopted the provisions of the
SEC's Staff Accounting Bulletin No. 101 related to layaway sales,
effective as of January 31, 1999. The Company recorded a one-time,
non-cash, after-tax charge of $5.2 million in fiscal 2000 for the
cumulative effect of the accounting change.
