Exhibit 99.1
The TJX Companies, Inc. Reports First Quarter FY07 EPS Up 21%
FRAMINGHAM, Mass.--(BUSINESS WIRE)--May 16, 2006--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 29, 2006. Net sales
for the first quarter were $3.9 billion, a 7% increase over last year
and consolidated comparable store sales increased 1% over last year.
Net income was $164 million, and diluted earnings per share were $.34,
a 21% increase over $.28 per share in the prior year. Results for the
first quarter were negatively impacted by a previously announced
one-time pretax charge of $7 million, or $.01 per share, related to a
workforce reduction (see below).
Ben Cammarata, Chairman and Acting Chief Executive Officer of The
TJX Companies, Inc., stated, "Our first quarter earnings per share
exceeded our expectations, despite our top line coming in just
slightly below our plan. Through buying more of our merchandise
opportunistically and close to need, we achieved
stronger-than-expected merchandise margins. These strong merchandise
margins, combined with below-plan expenses, resulted in significant
improvement in our pretax margins and bottom line. Moving into the
second quarter, we have significantly more liquidity in our inventory
position than at this time last year, which puts us in an excellent
position to take advantage of the abundant off-price opportunities
available towards the end of the season."
Sales by Business Segment
The Company's comparable store sales and net sales by division, in
the first quarter, were as follows:
First Quarter First Quarter
Comparable Store Net Sales
Sales ($ in millions)
------------------- -----------------------
FY2007 FY2006 FY2007 FY2006
- -------------------------- --------- --------- ----------- -----------
Marmaxx(a) +1% +3% $2,647 $2,564
- -------------------------- --- ----- --- ----- ----------- -----------
Winners/HomeSense +8% (US$) +7% (US$) $369 $313
+1% (C$) -1% (C$)
- -------------------------- --- ----- --- ----- ----------- -----------
T.K. Maxx -3% (US$) +2% (US$) $349 $318
+5% (GBP) -1% (GBP)
- -------------------------- --- ----- --- ----- ----------- -----------
HomeGoods +3% 0% $306 $259
- -------------------------- --- ----- --- ----- ----------- -----------
A.J. Wright +3% +1% $162 $139
- -------------------------- --- ----- --- ----- ----------- -----------
Bob's Stores +2% NA $63 $59
- -------------------------- --- ----- --- ----- ----------- -----------
- -------------------------- --- ----- --- ----- ----------- -----------
TJX +1% +3% $3,896 $3,652
- -------------------------- --- ----- --- ----- ----------- -----------
(a) Combination of T.J. Maxx and Marshalls
Margins
During the first quarter of Fiscal 2007, the Company's pretax
profit margin increased to 6.7% from 6.0% last year. The gross profit
margin increased 0.9 percentage points to 24.5%, primarily due to
improved merchandise margins. The SG&A ratio to sales increased by 0.2
percentage points to 17.7%, due to one-time costs related to the
workforce reduction (see below). Excluding this charge, the SG&A ratio
was flat to last year, with the deleveraging impact of the 1%
comparable store sales increase offset by effective cost management.
One-Time Charge Related to Workforce Reduction
The Company's first quarter Fiscal 2007 results were negatively
impacted by a $7 million, or $.01 per share, one-time pretax charge
related to the reduction in workforce at its corporate and divisional
offices announced earlier this year. This one-time charge consisted
primarily of severance and outplacement services. The Company
eliminated a total of approximately 250 positions (100 of which were
unfilled), which represented about 6% of its headquarters staff and,
at that time, also announced that 12 of its most senior executives had
agreed to 10% salary reductions. In total, the Company expects these
actions will result in a cost reduction of approximately $18 million
on an annualized basis. For fiscal 2007, the Company anticipates a net
benefit to pretax income of approximately $8 million, which reflects
$15 million in partial year savings from the cost reductions,
partially offset by the $7 million, one-time charge recorded in the
first quarter.
Stock Option Expense
As previously announced, in the fourth quarter of Fiscal 2006, the
Company early-adopted the Statement of Financial Accounting Standards
(SFAS) No. 123R related to accounting for stock based compensation and
also adjusted prior period financial statements to reflect the impact
of stock option expense. Consequently, the attached consolidated
financial statements and business segment results include the impact
of stock option expense for both current and prior periods.
Inventory
Total inventories as of April 29, 2006, were $2.6 billion compared
with $2.5 billion at the same time last year and, on a per-store
basis, including the warehouses, were down 7% from the prior year. At
the Marmaxx division, per-store inventories, including the warehouses,
were down 9% from last year's levels. Including merchandise on order,
Marmaxx's total inventory commitment was also down on a per-store
basis.
Share Repurchases
During the quarter, the Company spent a total of $177 million in
repurchases of TJX stock, retiring 7.2 million shares. It remains the
Company's plan to repurchase a total of $650 million of TJX stock in
Fiscal 2007.
Second Quarter and Fiscal 2007 Outlook
For the second quarter of Fiscal 2007, the Company expects
earnings per share in the range of $.24 to $.26, an increase of 4% -
13% over $.23 per share in the prior year. This forecast is based on
various assumptions, including estimated consolidated comparable store
sales growth of approximately 3%.
For the fiscal year ended January 27, 2007, the Company continues
to expect earnings per share in the range of $1.42 to $1.46 as
compared to $1.41 in the prior year. Prior year earnings per share
include a net benefit of $.12 per share from one-time items
(non-recurring tax items, partially offset by certain third quarter
events, detailed in the Company's Fiscal 2006 Form 10-K). Excluding
these items, the Company expects current year earnings per share to be
up 10% to 13% over the pro forma $1.29 earnings per share earned in
Fiscal 2006. This is based on various assumptions, including
consolidated comparable store sales growth in the 2% to 3% range.
Stores by Concept
During the first quarter, the Company added a total of 33 stores.
TJX increased square footage by 8% over the same period last year.
Store Locations Gross Square Feet
First Quarter First Quarter
(in millions)
------------------- -------------------
Beginning End Beginning End
- ------------------------------ ------------ ------ ------------ ------
T.J. Maxx 799 805 23.8 24.0
- ------------------------------ ------------ ------ ------------ ------
Marshalls 715 725 22.7 23.1
- ------------------------------ ------------ ------ ------------ ------
Winners 174 178 5.2 5.3
- ------------------------------ ------------ ------ ------------ ------
HomeSense 58 60 1.4 1.5
- ------------------------------ ------------ ------ ------------ ------
HomeGoods 251 254 6.2 6.3
- ------------------------------ ------------ ------ ------------ ------
T.K. Maxx 197 201 5.9 6.0
- ------------------------------ ------------ ------ ------------ ------
A.J. Wright 152 156 3.9 4.0
- ------------------------------ ------------ ------ ------------ ------
Bob's Stores 35 35 1.6 1.6
- ------------------------------ ------------ ------ ------------ ------
- ------------------------------ ------------ ------ ------------ ------
TJX 2,381 2,414 70.6 71.7
- ------------------------------ ------------ ------ ------------ ------
About The TJX Companies, Inc.
The TJX Companies, Inc. is the leading off-price retailer of
apparel and home fashions in the U.S. and worldwide. The Company
operates 805 T.J. Maxx, 725 Marshalls, 254 HomeGoods, and 156 A.J.
Wright stores, as well as 35 Bob's Stores, in the United States. In
Canada, the Company operates 178 Winners and 60 HomeSense stores, and
in Europe, 201 T.K. Maxx stores. TJX's press releases and financial
information are also available on the Internet at www.tjx.com.
Fiscal 2007 First Quarter Earnings Conference Call
At 11:00 a.m. ET today, Ben Cammarata, Chairman and Acting Chief
Executive Officer, and Carol Meyrowitz, President of TJX, will hold a
conference call with stock analysts to discuss the Company's first
quarter Fiscal 2007 results, operations and business trends. A
real-time webcast of the call will be available at www.tjx.com or by
dialing (866) 457-5717 through Tuesday, May 23, 2006.
May Fiscal 2007 Sales Recording
Additionally, the Company expects to release its May 2006 sales
results on Thursday, June 1, 2006, at approximately 8:15 a.m. ET.
Concurrent with that press release, a recorded message with more
detailed information regarding TJX's May sales results, operations and
business trends will be available via the Internet at www.tjx.com, or
by calling (703) 736-7248 through Thursday, June 8, 2006.
Archived versions of the Company's recorded messages and
conference calls are available at www.tjx.com after they are no longer
available by telephone.
Forward-looking Statements
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, including
projections of earnings per share and same store sales, 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 and increase same store sales; risks of
expansion; our ability to successfully implement our opportunistic
inventory strategies and to effectively manage our inventories;
successful advertising and promotion; 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 and protect
data; our ability to continue to generate adequate cash flows;
availability and cost of financing; general economic conditions,
including gasoline prices; 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 29, April 30,
2006 2005
---------- ----------
Net sales $3,896,483 $3,651,830
Cost of sales, including buying and
occupancy costs 2,942,783 2,788,769
Selling, general and administrative
expenses 689,545 637,245
Interest expense, net 3,759 6,036
---------- ----------
Income before provision for income taxes 260,396 219,780
Provision for income taxes 96,587 84,199
---------- ----------
Net income $ 163,809 $ 135,581
========== ==========
Diluted earnings per share:
Net income $ .34 $ .28
Cash dividends declared per share $ .07 $ .06
Weighted average shares for diluted
earnings per share computation 484,947,472 497,114,568
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
April 29, April 30,
2006 2005
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 279.9 $ 177.8
Accounts receivable and other current assets 422.6 357.1
Merchandise inventories (See Note 2) 2,555.3 2,460.4
-------- --------
Total current assets 3,257.8 2,995.3
-------- --------
Property and capital leases, net of depreciation 2,022.0 1,885.1
Other assets 156.4 113.6
Goodwill and tradename, net of amortization 183.4 183.6
-------- --------
TOTAL ASSETS $5,619.6 $5,177.6
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ - $ 35.0
Current installments of long-term debt - 100.0
Accounts payable (See Note 2) 1,450.9 1,328.9
Accrued expenses and other current liabilities 884.2 969.3
-------- --------
Total current liabilities 2,335.1 2,433.2
-------- --------
Other long-term liabilities 566.1 491.7
Non-current deferred income taxes, net - 52.0
Long-term debt 789.6 573.7
Shareholders' equity 1,928.8 1,627.0
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,619.6 $5,177.6
======== ========
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
13 Weeks Ended
--------------------
April 29, April 30,
2006 2005
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 163.8 $ 135.6
Depreciation and amortization 86.0 78.8
Deferred income tax provision (10.0) (11.6)
Amortization of stock compensation expense 19.5 24.1
(Increase) in accounts receivable and other
current assets (108.4) (108.5)
(Increase) in merchandise inventories (175.6) (109.0)
Increase in accounts payable 128.9 53.0
Increase (decrease) in accrued expenses and other
liabilities (70.0) 116.5
Other, net 16.6 8.2
------ ------
Net cash provided by operating activities 50.8 187.1
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (96.0) (100.6)
Other .2 .2
------ ------
Net cash (used in) investing activities (95.8) (100.4)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term debt - 35.0
Payments for repurchase of common stock (164.9) (241.4)
Cash dividends paid (27.7) (21.6)
Other 46.7 12.3
------ ------
Net cash (used in) financing activities (145.9) (215.7)
------ ------
Effect of exchange rate changes on cash 5.2 (.4)
------ ------
Net (decrease) in cash and cash equivalents (185.7) (129.4)
Cash and cash equivalents at beginning of year 465.6 307.2
------ ------
Cash and cash equivalents at end of period $ 279.9 $ 177.8
======= =======
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(Dollars In Thousands)
13 Weeks Ended
-----------------------
April 29, April 30,
2006 2005
---------- ----------
Net sales:
Marmaxx $2,646,702 $2,563,586
Winners and HomeSense 368,810 313,097
T.K. Maxx 349,320 317,706
HomeGoods 305,832 258,627
A.J. Wright 162,481 139,371
Bob's Stores 63,338 59,443
---------- ----------
$3,896,483 $3,651,830
========== ==========
Segment profit or (loss):
Marmaxx $ 269,519 $ 257,485
Winners and HomeSense 28,086 9,892
T.K. Maxx (201) (2,236)
HomeGoods 8,534 (666)
A.J. Wright (2,915) (4,173)
Bob's Stores (6,229) (6,986)
---------- ----------
296,794 253,316
General corporate expense 32,639 27,500
Interest expense, net 3,759 6,036
---------- ----------
Income before provision for income taxes $ 260,396 $ 219,780
========== ==========
Stores in operation end of period:
T.J. Maxx 805 773
Marshalls 725 699
Winners 178 169
HomeGoods 254 220
T.K. Maxx 201 175
A.J. Wright 156 137
HomeSense 60 44
Bob's Stores 35 34
----- -----
Total 2,414 2,251
===== =====
The TJX Companies, Inc. Notes To Consolidated
and Consolidated Subsidiaries Condensed Financial Statements
1. In the fourth quarter of the fiscal year ended January 28, 2006 The
TJX Companies, Inc. elected to early adopt the provisions of
Statement of Financial Accounting Standards (SFAS) No. 123R,
"Accounting for Stock Based Compensation." SFAS No. 123R requires
that the cost of equity-based awards be recognized in the
financial statements. In addition, TJX elected the modified
retrospective transition method which requires that all prior
period financial statements be adjusted to the pro forma amounts
previously disclosed in the company's notes to its financial
statements. Thus the previously reported results for the thirteen
weeks ended April 30, 2005 have been adjusted to reflect the
effect of adopting SFAS No. 123R.
2. We accrue for inventory purchase obligations at the time the
inventory is shipped rather than when received and accepted by
TJX. As a result, merchandise inventories include an estimate for
"inventory-in-transit" of $273.2 million as of April 29, 2006 and
$179.6 million as of April 30, 2005. A liability for a comparable
amount is included in accounts payable for the respective period.
3. During the first quarter ended April 29, 2006, TJX repurchased 7.2
million shares of its common stock at a cost of $177 million, not
all of which had settled prior to the end of the quarter. Through
April 29, 2006, under its current $1 billion multi-year stock
repurchase program, TJX has spent $183.6 million on the repurchase
of 7.4 million shares of TJX common stock.
CONTACT: The TJX Companies, Inc.
Sherry Lang, Vice President
Investor and Public Relations
(508) 390-2323