Exhibit 99.1
The TJX Companies, Inc. Reports Second Quarter Fiscal 2005 Results
FRAMINGHAM, Mass.--(BUSINESS WIRE)--Aug. 17, 2004--The TJX Companies, Inc.
(NYSE: TJX), the leading off-price retailer of apparel and home fashions in the
U.S. and worldwide, today announced sales and earnings results for the second
quarter ended July 31, 2004. Net sales for the second quarter were $3.4 billion,
a 12% increase over last year, with consolidated comparable store sales
increasing 3% over the prior year. Net income was $118 million and diluted
earnings per share were $.24, which equalled last year's earnings per share.
For the first half of fiscal 2005, net sales were $6.8 billion, 16% over
last year, and year-to-date consolidated comparable store sales increased 6%
over last year. Net income was $286 million and diluted earnings per share were
$.57, up 24% over $.46 per share last year.
Edmond English, President and Chief Executive Officer of The TJX Companies,
Inc., commented, "While our second quarter results did not meet the expectations
we had set at the beginning of the year, I am pleased that year-to-date earnings
per share are in line with our original plan at the half-year mark. We
maintained our inventory discipline when sales trends softened during the second
quarter and took higher markdowns to keep merchandise turning and our stores
fresh. In this way, we stayed true to our mission of offering our customers
rapidly changing merchandise assortments and kept our stores ready for the flow
of new, fall product. As we enter the back half of the year, inventories are in
great shape, which positions us well to continue to take advantage of the
numerous buying opportunities in the marketplace.
"At The Marmaxx Group, the combination of T.J. Maxx and Marshalls, second
quarter sales increased 6% over last year and comparable store sales increased
2%. Segment profit was $203 million, up 6% over last year, but below our plan.
Merchandise margins improved over last year's margins, but did not reach our
targeted levels. While trends in men's and home fashions categories remained
weak, we are pleased that sales of footwear, accessories and jewelry, which are
departments that we are expanding, as well as women's apparel, continued to be
very strong. By the end of September, we expect to have completed the majority
of the 300 new jewelry/accessories expansions at T.J. Maxx and the 60-plus new
footwear departments at Marshalls that we plan for this year, which we believe
will benefit the third and fourth quarters. Marmaxx was extremely disciplined in
clearing summer merchandise and readying our stores for the fall selling season
and inventories are in very good shape. New T.J. Maxx and Marshalls stores
continue to perform well and we now expect to net a total of 50 stores this
year."
English continued, "HomeGoods' second quarter sales increased 15% and
comparable store sales decreased 1%. Bottom-line results were below last year
and our expectations. HomeGoods' second quarter results were impacted by
lighter-than-optimal summer, seasonal inventories, which had been in high demand
early in the season. That said, we continue to be bullish about this unique
concept, which offers great values on a rapidly changing assortment of home
fashions. At HomeGoods, we now expect to add 34 stores, which includes both the
freestanding and superstore format and represents a 17% increase in selling
square footage.
"At our Canadian divisions, Winners and HomeSense, second quarter sales
increased 19% above last year. Comparable store sales increased 12% in U.S.
dollars and a very strong 11% in local currency over the prior year. Winners'
segment profit for the quarter increased 16%. These results were primarily due
to this division's solid execution of its merchandising and inventory
strategies. Winners did a great job of transitioning seasons and saw strong
comparable store sales growth across most major merchandise categories. In
addition, we are pleased that our HomeSense concept continues to take hold in
Canada, as this young division grows its business. We are on schedule to add 8
Winners and 15 HomeSense stores by the end of 2004, increasing our selling
square footage by 13% in Canada this year.
"At T.K. Maxx, in the U.K. and Ireland, second quarter sales increased 31%
and comparable store sales increased 13% in U.S. dollars. In local currency,
T.K. Maxx's comparable store sales increased 1% over a 4% increase the prior
year, but were below plan. Segment profit increased 16% over the prior year, but
below our expectations, as a result of softer sales trends. Despite the second
quarter shortfall in sales, we remain very pleased with the growth of our T.K.
Maxx concept. New stores are performing well, there is enthusiastic response to
this concept in both existing and new markets, and there are plenty of real
estate opportunities for this division as it continues to expand in the U.K. and
Ireland. We are on track to grow this division's selling square footage by 26%
in 2004, adding a total of 25 stores."
English continued, "A.J. Wright posted a 23% increase in sales in the second
quarter and a comparable store sales increase of 2% over a very strong 11%
increase last year. We believe that our A.J. Wright customers are more sensitive
to economic conditions, which impacted this division's results. Due to soft
sales and related markdown activity, bottom-line results for this young division
were below last year and our expectations. We continue to be excited about the
growth potential for this concept, which offers great, off-price values to
moderate-income shoppers. This year, we are expanding A.J. Wright to California,
with five store openings. We believe this densely populated market holds great
growth opportunities for this concept. For the year, we are on schedule to
increase this division's selling square footage by 31%, adding 32 stores to A.J.
Wright's store base."
English continued, "At Bob's Stores, which we acquired in December 2003,
total sales were $64 million, which was below our plan. While we expected Bob's
Stores to report a loss in the second quarter, the bottom-line impact of soft
sales and related markdowns was more than we anticipated. That said, Bob's
Stores continued to improve its inventory management discipline during the
quarter, making way for fresher, fall merchandise assortments. This was Bob's
Stores' second quarter as a TJX division and we continue to refine this
business, including working with promotional levels and merchandising
strategies. Our plan is to grow this business slowly and deliberately. We plan
to open two stores this fall and continue to view Bob's Stores as an excellent
long-term growth vehicle. Over the long term, we expect to expand this uniquely
positioned concept to 400 stores in the U.S.
"We continue to generate significant returns on investment, which gives us
the ability to grow our store base and the infrastructure to support it, while
simultaneously pursuing our sizable share repurchase program and maintaining our
strong financial position. During the second quarter, we spent a total of $171
million, retiring 7.3 million shares of TJX stock, which was more than we had
planned."
English concluded, "There are many factors that give me confidence in our
business. Our inventories are in great shape and we are in a very liquid
open-to-buy position, which allows us to continue to pursue our close-to-need
buying strategies and offer our customers the right fashions at the right
values. We are pleased with customers' enthusiastic response to our assortments
of women's fashions and our expanded footwear and jewelry/accessories
departments, all of which are important categories in the back half of the year.
We also are excited about our upcoming launches of e-commerce websites for our
T.J. Maxx and HomeGoods businesses, which we have planned for this fall. New
stores across all divisions are performing well, and our very strong financial
position continues to serve as a foundation upon which to grow our business this
year 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 753 T.J. Maxx, 684
Marshalls, 192 HomeGoods, and 108 A.J. Wright stores, as well as 31 Bob's
Stores, in the United States. In Canada, the Company operates 162 Winners and 32
HomeSense stores, and in Europe, 154 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 2005 second quarter results, operations
and business trends. The call will be webcast simultaneously at www.tjx.com. A
replay of the call will also be available by dialing (888) 300-0172 through
Tuesday, August 24, 2004. Additionally, TJX expects to release its August 2004
sales results on Thursday, September 2, 2004, 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, operations and business trends
will be available by calling (703) 736-7248 or via the Internet at www.tjx.com.
That sales recording will remain available via the phone through Thursday,
September 9, 2004. Archived versions of our recorded messages and conference
calls are available at www.tjx.com after they are no longer available by
telephone.
SAFE HARBOR STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: Various statements made in this release are forward-looking and involve a
number of risks and uncertainties. All statements that address activities,
events or developments that we intend, expect or believe may occur in the future
are forward-looking statements. The following are some of the factors that could
cause actual results to differ materially from the forward-looking statements:
our ability to continue successful expansion of our store base; risks of
expansion; our ability to successfully implement our opportunistic inventory
strategies and to effectively manage our inventories; consumer confidence,
demand, spending habits and buying preferences; effects of unseasonable weather;
competitive factors; factors affecting availability of store and distribution
center locations on suitable terms; factors affecting our recruitment and
employment of associates; factors affecting expenses; success of our acquisition
and divestiture activities; our ability to successfully implement technologies
and systems; our ability to continue to generate adequate cash flows; general
economic conditions; potential disruptions due to wars, natural disasters and
other events beyond our control; changes in currency and exchange rates; import
risks; adverse outcomes for any significant litigation; changes in laws and
regulations and accounting rules and principles; and other factors that may be
described in our 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 in such statements will not be realized.
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
Thirteen Weeks Ended
----------------------
July 31, July 26,
2004 2003
-------- --------
Net sales $3,414,287 $3,046,184
Cost of sales, including buying and
occupancy costs 2,629,207 2,327,058
Selling, general and administrative
expenses 584,751 510,818
Interest expense, net 6,993 7,228
-------- --------
Income before provision for income taxes 193,336 201,080
Provision for income taxes 75,094 77,818
-------- --------
Net income $ 118,242 $ 123,262
======== ========
Diluted earnings per share:
Net income $ .24 $ .24
Cash dividends declared per share $ .045 $ .035
Weighted average shares for diluted
earnings per share computation 499,183,659 514,340,496
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
Twenty-Six Weeks Ended
------------------------
July 31, July 26,
2004 2003
-------- -------
Net sales $6,767,024 $5,834,889
Cost of sales, including buying and
occupancy costs 5,147,553 4,440,688
Selling, general and administrative
expenses 1,138,225 993,709
Interest expense, net 13,576 14,206
-------- -------
Income before provision for income taxes 467,670 386,286
Provision for income taxes 181,316 149,493
-------- -------
Net income $ 286,354 $ 236,793
======== =======
Diluted earnings per share:
Net income $ .57 $ .46
Cash dividends declared per share $ .09 $ .07
Weighted average shares for diluted
earnings per share computation 501,949,341 517,399,853
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
July 31, July 26,
2004 2003
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 135.6 $ 44.0
Accounts receivable and other current assets 320.5 241.5
Current deferred income taxes, net 6.2 11.3
Merchandise inventories 2,217.0 2,017.9
-------- --------
Total current assets 2,679.3 2,314.7
-------- --------
Property and capital leases, net of depreciation 1,644.7 1,489.7
Other assets 105.8 113.6
Goodwill and tradename, net of amortization 183.6 179.3
-------- --------
TOTAL ASSETS $ 4,613.4 $4,097.3
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 105.0 $ 15.0
Accounts payable 1,142.0 1,040.4
Accrued expenses and other current liabilities 737.6 607.8
-------- -------
Total current liabilities 1,984.6 1,663.2
-------- -------
Other long-term liabilities 373.1 347.4
Non-current deferred income taxes, net 156.1 68.8
Long-term debt 566.8 664.9
Shareholders' equity 1,532.8 1,353.0
-------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 4,613.4 $4,097.3
======== =======
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
Twenty-Six Weeks Ended
----------------------
July 31, July 26,
2004 2003
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 286.4 $ 236.8
Depreciation and amortization 135.7 112.1
Deferred income tax provision 36.5 32.5
(Increase) in accounts receivable and other
current assets (69.7) (61.0)
(Increase) in merchandise inventories (276.5) (444.3)
Increase in accounts payable 182.3 217.0
Increase (decrease) in accrued expenses and other
liabilities 31.7 (73.4)
Other, net 23.9 22.0
-------- -------
Net cash provided by operating activities 350.3 41.7
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (138.2) (188.2)
Other .3 .3
-------- -------
Net cash (used in) investing activities (137.9) (187.9)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for repurchase of common stock (315.8) (277.3)
Cash dividends paid (39.7) (33.5)
Other 34.1 8.8
-------- -------
Net cash (used in) financing activities (321.4) (302.0)
-------- -------
Effect of exchange rate changes on cash (1.8) (.1)
-------- -------
Net (decrease) in cash and cash equivalents (110.8) (448.3)
Cash and cash equivalents at beginning of year 246.4 492.3
-------- --------
Cash and cash equivalents at end of period $ 135.6 $ 44.0
======== =======
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
Thirteen Weeks Ended
-------------------------
July 31, July 26,
2004 2003
----------- ------------
Net sales:
Marmaxx $ 2,442,162 $ 2,301,463
Winners and HomeSense 292,566 245,794
T.K. Maxx 275,426 209,921
HomeGoods 222,079 192,975
A.J. Wright 118,262 96,031
Bob's Stores 63,792 -
----------- ------------
$ 3,414,287 $ 3,046,184
=========== ============
Segment profit or (loss):
Marmaxx $ 202,582 $ 191,800
Winners and HomeSense 21,101 18,138
T.K. Maxx 9,533 8,184
HomeGoods (626) 6,114
A.J. Wright (3,239) 1,839
Bob's Stores (8,231) -
----------- ------------
221,120 226,075
General corporate expense 20,791 17,767
Interest expense, net 6,993 7,228
----------- ------------
Income before provision for income taxes $ 193,336 $ 201,080
=========== ============
Stores in operation:
T.J. Maxx 753 727
Marshalls 684 649
Winners 162 154
HomeGoods 192 160
T.K. Maxx 154 132
A.J. Wright 108 84
HomeSense 32 21
Bob's Stores 31 -
----------- ------------
Total 2,116 1,927
=========== ============
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(In Thousands)
Twenty-Six Weeks Ended
----------------------
July 31, July 26,
Net sales: 2004 2003
---------- ---------
Marmaxx $4,863,386 $4,451,549
Winners and HomeSense 562,191 447,577
T.K. Maxx 538,673 387,174
HomeGoods 448,511 370,037
A.J. Wright 229,108 178,552
Bob's Stores 125,155 -
---------- ---------
$6,767,024 $5,834,889
========== ==========
Segment profit or (loss):
Marmaxx $ 474,496 $ 385,685
Winners and HomeSense 45,494 29,931
T.K. Maxx 11,476 9,100
HomeGoods 4,535 10,646
A.J. Wright (6,192) (506)
Bob's Stores (6,981) -
---------- ---------
522,828 434,856
General corporate expense 41,582 34,364
Interest expense, net 13,576 14,206
--------- ---------
Income before provision for income taxes $ 467,670 $ 386,286
========= =========
Stores in operation:
T.J. Maxx 753 727
Marshalls 684 649
Winners 162 154
HomeGoods 192 160
T.K. Maxx 154 132
A.J. Wright 108 84
HomeSense 32 21
Bob's Stores 31 -
--------- ---------
Total 2,116 1,927
========= =========
The TJX Companies, Inc. Notes To Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. During the second quarter ended July 31, 2004, 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 31, 2004, TJX repurchased
12.9 million shares at a cost of $308.6 million. During the second quarter ended
July 31, 2004, TJX repurchased 7.3 million shares of its common stock, at a cost
of $171.5 million. Through July 31, 2004, under its current $1 billion
multi-year stock repurchase program, TJX has repurchased 5.5 million shares at a
cost of $127.2 million.
2 . Certain amounts in the prior period's financial statements have been
reclassified to be consistent with the current year's presentation.
CONTACT: TJX Companies
Sherry Lang, 508-390-2323
Vice President
Investor and Public Relations