Exhibit 99.1
The TJX Companies, Inc. Reports First Quarter Fiscal 2006 Results
FRAMINGHAM, Mass.--(BUSINESS WIRE)--May 17, 2005--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 first quarter ended April 30, 2005. Net sales
for the first quarter were $3.7 billion, a 9% increase over last year.
Consolidated comparable store sales increased 3% over last year's
strong 8% increase. Net income was $149 million and diluted earnings
per share were $.30 versus $.32 in the prior year.
Edmond English, President and Chief Executive Officer of The TJX
Companies, Inc., commented, "We knew the first quarter would be
challenging, since we were up against our most difficult comparisons
of the year, given last year's extremely strong comparable store sales
and margin performance. This challenge was further compounded by
unseasonable weather that prevailed across several major trading
areas, resulting in first quarter sales and earnings coming in
slightly below our expectations. That said, I am encouraged by several
aspects of our business. First, in regions with warm weather, our
business was very strong, which bodes well for the balance of the
season. Second, inventory and expense management has been strong.
Open-to-buy positions are more liquid than last year across virtually
all our businesses, allowing us to capitalize upon the abundant buying
opportunities in the market. Finally, I am encouraged by the progress
we are seeing at some of our younger businesses, and the specific
actions we have taken to improve their profitability and earnings
growth.
"At The Marmaxx Group, the combination of T.J. Maxx and Marshalls,
first quarter top-line results were in line with our expectations,
with sales increasing 6% and comparable store sales increasing 3%.
Segment profit was $268 million and segment profit margin was 10.4%,
both less than we had planned, but against exceptionally strong profit
performance last year when merchandise margins reached the highest
levels for the first quarter in the history of The Marmaxx Group.
Following a very strong February, sales weakened in March due to
difficult weather patterns, and we took aggressive markdowns to keep
our stores fresh. We are encouraged by robust sales in regions where
the weather was seasonable, especially on the West Coast and in
Florida. We also are pleased with continued strength in women's
sportswear and our expanded jewelry/accessories and footwear
departments, as well as improving trends in our men's and children's
categories."
English continued, "At our Canadian concepts, Winners and
HomeSense, first quarter sales increased 16% and comparable store
sales increased 7% above last year in U.S. dollars. In local currency,
which we believe more meaningfully reflects our operating performance,
comparable store sales decreased 1%, versus a strong 6% increase last
year. Winners' segment profit for the quarter was $12 million, which
was below our expectations. With unusually harsh weather in Canada,
Winners took aggressive markdowns to keep its stores current. I am
very pleased with the inventory discipline at Winners. As we enter the
second quarter, total inventories per store are well below last year's
levels, the open-to-buy position is in great shape, and we are in an
excellent position to continue flowing fresh apparel and home fashions
to our stores.
"At HomeGoods, sales in the first quarter increased 14% and
comparable store sales were flat versus a 4% increase last year.
Segment profit was $1 million, slightly below our plan. We are
encouraged that comparable store sales trends improved as we moved
through the quarter. As we enter the summer selling season, we are
seeing positive customer response to our merchandise mix and great
values on exciting home fashions.
"At T.K. Maxx, in the U.K. and Ireland, first quarter sales
increased 21% and comparable store sales increased 2% in U.S. dollars.
In local currency, comparable store sales decreased 1% against last
year's solid 5% gain. While T.K. Maxx was adversely impacted by the
ongoing difficult retail environment in the U.K., with profit below
plan, they did a good job of limiting their margin exposure through
disciplined inventory and expense management. In particular, I am very
pleased that T.K. Maxx actually increased its gross profit margin by
buying close to need and limiting markdowns."
English continued, "A.J. Wright's first quarter sales increased
26% over last year and comparable store sales increased 1% versus last
year's very strong 9% increase. Bottom-line results were flat with
last year and in line with our expectations. As A.J. Wright's store
base is heavily concentrated in the Northeast, the cold weather in
March and April had a significant impact on this division. Despite
softer sales, A.J. Wright did an excellent job of managing inventories
throughout the quarter. As we begin the second quarter, A.J. Wright
has solid opportunities to improve year-over-year performance.
"Bob's Stores' first quarter sales were slightly less than we had
anticipated. However, bottom-line results were in line with plan, and
we are pleased with the improvements we are seeing in merchandise
margins."
English continued, "We continue to generate significant returns on
investment, which gives us the ability to grow our businesses while
simultaneously pursuing our sizable share repurchase program and
maintaining our strong financial position. During the first quarter,
we spent a total of $263 million, which was more than we had planned,
retiring 11 million shares of TJX stock."
English concluded, "As we enter the second quarter, I am
encouraged by our business prospects. Our stores look great across all
of our divisions. Business was strong in regions where weather was
favorable. Our open-to-buy position is in even better shape than at
this time last year, giving us the continued ability to navigate
through the marketplace and take advantage of the many opportunities
to offer our customers excellent values on fresh, summer fashions."
The TJX Companies, Inc. is the leading off-price retailer of
apparel and home fashions in the U.S. and worldwide. The Company
operates 773 T.J. Maxx, 699 Marshalls, 220 HomeGoods, and 137 A.J.
Wright stores, as well as 34 Bob's Stores, in the United States. The
Company also operates two e-commerce sites, www.tjmaxx.com and
www.homegoods.com. In Canada, the Company operates 169 Winners and 44
HomeSense stores, and in Europe, 175 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 2006 first
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 800-873-2072 through Tuesday, May 24, 2005.
Additionally, TJX expects to release its May 2005 sales results on
Thursday, June 2, 2005, 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, 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, June 9, 2005. 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; effectiveness of
internal controls; 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)
13 Weeks Ended
------------------------
April 30, May 1,
2005 2004
---------- ----------
Net sales $3,651,830 $3,352,737
Cost of sales, including buying and
occupancy costs 2,781,529 2,518,346
Selling, general and administrative
expenses 621,547 553,474
Interest expense, net 6,036 6,583
---------- ----------
Income before provision for income taxes 242,718 274,334
Provision for income taxes 93,374 106,222
---------- ----------
Net income $ 149,344 $ 168,112
========== ==========
Diluted earnings per share:
Net income $ .30 $ .32
Cash dividends declared per share $ .06 $ .045
Weighted average shares for diluted
earnings per share computation
(See Note 1) 501,399,778 521,585,772
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
April 30, May 1,
2005 2004
--------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 177.8 $ 241.5
Accounts receivable and other current assets 357.1 331.2
Merchandise inventories (See Note 2) 2,460.4 2,010.2
-------- --------
Total current assets 2,995.3 2,582.9
-------- --------
Property and capital leases, net of depreciation 1,885.1 1,626.9
Other assets 113.6 115.3
Goodwill and tradename, net of amortization 183.6 183.6
-------- --------
TOTAL ASSETS $5,177.6 $4,508.7
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 35.0 $ -
Current installments of long-term debt 100.0 5.0
Accounts payable (See Note 2) 1,328.9 1,084.0
Accrued expenses and other current liabilities 969.3 663.5
-------- --------
Total current liabilities 2,433.2 1,752.5
-------- --------
Other long-term liabilities 491.7 369.4
Non-current deferred income taxes, net 151.4 136.9
Long-term debt 573.7 664.4
Shareholders' equity 1,527.6 1,585.5
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,177.6 $4,508.7
======== ========
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
13 Weeks Ended
------------------
April 30, May 1,
2005 2004
--------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $149.3 $168.1
Depreciation and amortization 78.8 67.4
Deferred income tax provision (2.4) 18.7
(Increase) in accounts receivable and other
current assets (108.5) (64.6)
(Increase) in merchandise inventories (See Note 2) (109.0) (78.9)
Increase in accounts payable (See Note 2) 53.0 128.7
Increase (decrease) in accrued expenses and other
liabilities 113.7 (56.9)
Other, net 12.2 10.8
------ ------
Net cash provided by operating activities 187.1 193.3
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (100.6) (62.9)
Other .2 .2
------ ------
Net cash (used in) investing activities (100.4) (62.7)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term debt 35.0 -
Payments for repurchase of common stock (241.4) (133.8)
Cash dividends paid (21.6) (17.5)
Other 12.3 18.1
------ ------
Net cash (used in) financing activities (215.7) (133.2)
------ ------
Effect of exchange rate changes on cash (.4) (2.3)
------ ------
Net (decrease) in cash and cash equivalents (129.4) (4.9)
Cash and cash equivalents at beginning of year 307.2 246.4
------ ------
Cash and cash equivalents at end of period $177.8 $241.5
====== ======
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(Dollars In Thousands)
13 Weeks Ended
----------------------
April 30, May 1,
2005 2004
---------- ----------
Net sales:
Marmaxx $2,563,586 $2,421,224
Winners and HomeSense 313,097 269,625
T.K. Maxx 317,706 263,247
HomeGoods 258,627 226,432
A.J. Wright 139,371 110,846
Bob's Stores 59,443 61,363
---------- ----------
$3,651,830 $3,352,737
========== ==========
Segment profit or (loss):
Marmaxx $ 267,660 $ 271,914
Winners and HomeSense 12,344 24,393
T.K. Maxx (341) 1,943
HomeGoods 623 5,161
A.J. Wright (2,960) (2,953)
Bob's Stores (6,523) 1,250
---------- ----------
270,803 301,708
General corporate expense 22,049 20,791
Interest expense, net 6,036 6,583
---------- ----------
Income before provision for income taxes $ 242,718 $ 274,334
========== ==========
Stores in operation end of period:
T.J. Maxx 773 753
Marshalls 699 679
Winners 169 162
HomeGoods 220 185
T.K. Maxx 175 148
A.J. Wright 137 102
HomeSense 44 31
Bob's Stores 34 31
----- -----
Total 2,251 2,091
===== =====
The TJX Companies, Inc. Notes To Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. In our fourth quarter reporting period ended January 29, 2005, we
began to calculate diluted earnings per share in accordance with
EITF Issue No. 04-08, "The Effect of Contingently Convertible Debt
on Diluted Earnings per Share." This accounting pronouncement
impacts the company's treatment for earnings per share purposes,
of its $517.5 million zero coupon convertible subordinated notes
issued in February 2001. These notes are convertible into 16.9
million shares of common stock of TJX if the sale price of our
stock reaches certain levels or other contingencies are met. EITF
Issue No. 04-08 requires that shares associated with contingently
convertible debt be included in diluted earnings per share
computations regardless of whether contingent conversion
conditions have been met. EITF Issue No. 04-08 also requires that
diluted earnings per share for all prior periods be restated to
reflect this change. As a result, diluted earnings per share
reflect the assumed conversion of our convertible subordinated
notes. This change reduces first quarter diluted earnings per
share by $.01 per share for both the current and prior first
quarter reporting period.
2. Effective with the third quarter ended October 30, 2004, we began
to accrue for inventory purchase obligations at the time the
inventory is shipped rather than when received and accepted by
TJX. As a result, as of April 30, 2005 we have recorded a $179.6
million increase to merchandise inventory on our balance sheet, to
reflect this in-transit inventory, as well as an equal increase to
accounts payable at that date. Prior years have not been adjusted
for this change. This accrual for inventory in transit affects
only the reported levels of inventory and accounts payable on the
balance sheet, and has no impact on our operating results, cash
flows, liquidity or shareholders' equity.
3. During the first quarter ended April 30, 2005, TJX repurchased 11.0
million shares of its common stock, for a cost of $262.9 million.
Through April 30, 2005, under its current $1 billion multi-year
stock repurchase program, TJX has repurchased 28.7 million shares
at a cost of $669.4 million.
CONTACT: The TJX Companies, Inc.
Sherry Lang, Vice President
Investor and Public Relations
(508) 390-2323