Exhibit 99.1
The TJX Companies, Inc. Reports Third Quarter FY08 Results
FRAMINGHAM, Mass.--(BUSINESS WIRE)--Nov. 13, 2007--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 third quarter ended October 27, 2007. Net
sales from continuing operations for the third quarter of fiscal 2008
increased 6% to $4.7 billion, and consolidated comparable store sales
increased 3% over last year. Net income from continuing operations for
the third quarter was $249 million and diluted earnings per share from
continuing operations were $.54, a 13% increase over last year's $.48.
For the first nine months of fiscal 2008, net sales from
continuing operations were $13.2 billion, a 7% increase over last
year, and consolidated comparable store sales increased 3% over the
prior year. Net income from continuing operations was $471 million and
diluted earnings per share from continuing operations were $1.00,
compared to $1.12 in the prior year period. These year-to-date, fiscal
2008 earnings results reflect after-tax charges of $130 million, or
$.28 per share, related to the previously reported unauthorized
computer intrusion(s). Excluding these charges, adjusted diluted
earnings per share from continuing operations for the first nine
months of fiscal 2008 were $1.28, a 14% increase over $1.12 for the
prior year.
Carol Meyrowitz, President and Chief Executive Officer of The TJX
Companies, Inc., stated, "I am very pleased with our third quarter
performance. The 13% increase in earnings per share from continuing
operations was achieved on top of a very strong 50% increase last
year, clearly demonstrating our ability to deliver sustained earnings
growth, even in difficult environments and against tough comparisons.
These results were achieved through solid execution of the off-price
model, specifically our disciplined management of inventories and
open-to-buy, as well as our continued focus on cost reduction. While
sales were slightly below plan, we believe this was mostly due to
unseasonably warm weather through the majority of September and
October. Importantly, as the weather cooled towards the end of the
quarter, we saw a strong surge in sales and demand for cold weather
apparel. We enter the fourth quarter with very clean, fresh
inventories, and significantly more liquidity than at this time last
year, which positions us well to take advantage of a market full of
buying opportunities and flow great gift product throughout the
holiday selling season."
Sales by Business Segment
The Company's comparable store sales and net sales from continuing
operations by division, in the third quarter, were as follows:
Third Quarter Third Quarter
Comparable Store Net Sales ($
Sales in millions)
--------------------- -------------
FY2008 FY2007 FY2008 FY2007
- ---------------------------------- ---------- ---------- ------ ------
Marmaxx(a) -1% +5% $3,009 $2,947
- ---------------------------------- ---- ----- ---- ----- ------ ------
Winners/HomeSense +15% (US$) +11% (US$) $559 $477
+5% (C$) +5% (C$)
- ---------------------------------- ---- ----- ---- ----- ------ ------
T.K. Maxx +13% (US$) +17% (US$) $568 $481
+6% (GBP) +11% (GBP)
- ---------------------------------- ---- ----- ---- ----- ------ ------
HomeGoods +4% +5% $372 $336
- ---------------------------------- ---- ----- ---- ----- ------ ------
A.J. Wright 0% +4% $151 $148
- ---------------------------------- ---- ----- ---- ----- ------ ------
Bob's Stores -2% +2% $79 $83
- ---------------------------------- ---- ----- ---- ----- ------ ------
- ---------------------------------- ---- ----- ---- ----- ------ ------
TJX +3% +6% $4,737 $4,473
- ---------------------------------- ---- ----- ---- ----- ------ ------
(a)Combination of T.J. Maxx and Marshalls
Margins
During the third quarter of fiscal 2008, the Company's
consolidated pretax profit margin from continuing operations was 8.5%,
a 0.1 percentage point improvement over last year's strong
performance. The gross profit margin from continuing operations for
the fiscal 2008 third quarter was 25.2%, down 0.2 percentage points.
The gross profit margin benefited from a 0.2 percentage point
improvement in merchandise margins, which was more than offset by a
mark-to-market adjustment on inventory-related foreign currency hedges
(which will reverse in the fourth quarter). Selling, general and
administrative costs as a percent of sales were 16.7%, a 0.2
percentage point improvement due to the Company's continued focus on
cost containment, partially offset by a planned increase in marketing
expense.
Inventory
Total inventories as of October 27, 2007, were $3.4 billion
compared with $3.2 billion at the same time in the prior year.
Consolidated inventories on a per-store basis, including the
warehouses, at October 27, 2007, were down 1% versus being up 5% at
the same time last year. Excluding the impact of foreign currency,
inventories were down 3% on a per-store basis. At the Marmaxx
division, the total inventory commitment, including the warehouses,
stores and merchandise on order, was down versus last year on a
per-store basis.
Share Repurchases
During the third quarter, the Company spent a total of $300
million to repurchase TJX stock, retiring 10.3 million shares. Year to
date, the Company has spent a total of $650 million to repurchase TJX
stock, retiring 22.7 million shares. The Company continues to expect
to repurchase $900 million of TJX stock during fiscal 2008, as
compared to $557 million of TJX stock that the Company repurchased
during fiscal 2007.
Discontinued Operations
The Company reports results from continuing operations, which
exclude the results of operations from 34 discontinued A.J. Wright
stores. These stores were closed during the fourth quarter of fiscal
2007 in order to reposition this business. Discontinued operations did
not impact earnings per share during the third quarter, as the net
income/(loss) from discontinued operations was immaterial.
Fourth Quarter and Fiscal 2008 Outlook
The Company has raised its expectation for fourth quarter fiscal
2008 earnings per share from continuing operations to $.58 to $.60,
which represents a 14% to 18% increase over $.51 per share in the
prior year. The increase in guidance primarily reflects the benefit of
favorable foreign exchange rates. The fiscal 2007 fourth quarter
results included a $.01 per share charge related to the unauthorized
computer intrusion(s). Excluding this charge, the Company's estimated
range for fiscal 2008 fourth quarter earnings per share from
continuing operations represents a 12% to 15% increase over prior
year's adjusted $.52. This outlook is based upon estimated
consolidated comparable store sales growth of 4%, of which
approximately 2% is due to the impact of foreign currency exchange
rates.
For the fiscal year ending January 26, 2008, the Company now
expects earnings per share from continuing operations in the range of
$1.58 to $1.60. Excluding charges incurred in the first and second
quarters of fiscal 2008 related to the unauthorized computer
intrusion(s) of $.28 per share, the Company expects fiscal 2008
earnings per share from continuing operations in the range of $1.86 to
$1.88, which represents a 14% to 15% increase over the $1.63 per share
from continuing operations in fiscal 2007. This outlook is based upon
estimated consolidated comparable store sales growth of 4% for the
full year.
Stores by Concept
During the third quarter, the Company added a total of 69 stores.
TJX increased square footage by 4% over the same period last year.
Store Locations Gross Square Feet
Third Quarter Third Quarter
(in millions)
--------------- -----------------
Beginning End Beginning End
- ------------------------------------ --------- ----- ------------ ----
T.J. Maxx 830 851 25.0 25.7
- ------------------------------------ --------- ----- ------------ ----
Marshalls 764 777 24.4 25.0
- ------------------------------------ --------- ----- ------------ ----
Winners 185 190 5.4 5.5
- ------------------------------------ --------- ----- ------------ ----
HomeSense 70 71 1.7 1.7
- ------------------------------------ --------- ----- ------------ ----
HomeGoods 273 287 6.7 7.1
- ------------------------------------ --------- ----- ------------ ----
T.K. Maxx 212 225 6.6 7.0
- ------------------------------------ --------- ----- ------------ ----
A.J. Wright 128 130 3.3 3.3
- ------------------------------------ --------- ----- ------------ ----
Bob's Stores 34 34 1.5 1.5
- ------------------------------------ --------- ----- ------------ ----
- ------------------------------------ --------- ----- ------------ ----
TJX 2,496 2,565 74.6 76.9
- ------------------------------------ --------- ----- ------------ ----
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 851 T.J. Maxx, 777 Marshalls, 287 HomeGoods, and 130 A.J.
Wright stores, as well as 34 Bob's Stores, in the United States. In
Canada, the Company operates 190 Winners and 71 HomeSense stores, and
in Europe, 225 T.K. Maxx stores. TJX's press releases and financial
information are also available on the Internet at www.tjx.com.
Third Quarter Fiscal 2008 Earnings Conference Call
At 11:00 a.m. ET today, Carol Meyrowitz, President and Chief
Executive Officer of TJX, will hold a conference call with stock
analysts to discuss the Company's third quarter fiscal 2008 results,
operations and business trends. A real-time webcast of the call will
be available at www.tjx.com. A replay of the call will also be
available at www.tjx.com or by dialing (866) 367-5577 through Tuesday,
November 20, 2007.
November Fiscal 2008 Sales Recorded Call
Additionally, the Company expects to release its November 2007
sales results on Thursday, December 6, 2007, at approximately 8:15
a.m. ET. Concurrent with that press release, a recorded message with
more detailed information regarding TJX's November sales results,
operations and business trends will be available via the Internet at
www.tjx.com, or by calling (703) 736-7248 through Thursday, December
13, 2007.
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 are forward-looking
statements. The following are some of the factors that could cause
actual results to differ materially from the forward-looking
statements: the results and effects of the intrusion or intrusions
into our computer system including the losses and expenses we may
incur (which may be different from the amount we reserved and
estimated and which differences may be material) and consequences to
our business (including potential effects on our reputation and our
sales) and to the value of our company and related value of our stock;
the terms and completion of the settlement of the customer class
actions; our ability to successfully expand our store base and
increase same store sales; risks of expansion and costs of
contraction; 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; our
ability to execute the share repurchase program; 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; adequacy of
reserves; closing adjustments; 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)
Thirteen Weeks Ended
-----------------------
October 27, October 28,
2007 2006
----------- ----------
Net sales $ 4,737,491 $4,472,943
Cost of sales, including buying and occupancy
costs 3,541,498 3,334,085
Selling, general and administrative expenses 792,552 756,348
Provision for Computer Intrusion related costs - -
Interest (income) expense, net 3,053 6,784
----------- ----------
Income from continuing operations before
provision for income taxes 400,388 375,726
Provision for income taxes 150,927 144,907
----------- ----------
Income from continuing operations 249,461 230,819
Loss from discontinued operations, net of
income taxes - (207)
----------- ----------
Net income $ 249,461 $ 230,612
=========== ==========
Diluted earnings per share:
Income from continuing operations $ 0.54 $ 0.48
Net income $ 0.54 $ 0.48
Cash dividends declared per share $ 0.09 $ 0.07
Weighted average shares for diluted earnings
per share computation (in thousands) 464,534 479,491
The TJX Companies, Inc. and Consolidated Subsidiaries
Financial Summary
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
Thirty-Nine Weeks Ended
-------------------------
October 27, October 28,
2007 2006
----------- -----------
Net sales $13,158,870 $12,307,858
Cost of sales, including buying and
occupancy costs 9,936,410 9,291,257
Selling, general and administrative expenses 2,250,880 2,133,778
Provision for Computer Intrusion related
costs 215,922 -
Interest (income) expense, net (423) 15,956
----------- -----------
Income from continuing operations before
provision for income taxes 756,081 866,867
Provision for income taxes 285,480 333,362
----------- -----------
Income from continuing operations 470,601 533,505
Loss from discontinued operations, net of
income taxes - (928)
----------- -----------
Net income $ 470,601 $ 532,577
=========== ===========
Diluted earnings per share:
Income from continuing operations $ 1.00 $ 1.12
Net income $ 1.00 $ 1.12
Cash dividends declared per share $ 0.27 $ 0.21
Weighted average shares for diluted earnings
per share computation (in thousands) 472,286 480,242
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)
October 27, October 28,
2007 2006
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 388.1 $ 341.6
Accounts receivable and other current assets 436.4 335.4
Current deferred income taxes, net 96.7 16.3
Merchandise inventories 3,364.5 3,246.3
----------- -----------
Total current assets 4,285.7 3,939.6
----------- -----------
Property and capital leases, net of
depreciation 2,236.5 2,055.6
Other assets 237.0 127.4
Goodwill and tradename, net of amortization 183.0 183.1
----------- -----------
TOTAL ASSETS $ 6,942.2 $ 6,305.7
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,819.1 $ 1,717.1
Accrued expenses and other current
liabilities 1,313.0 1,015.2
----------- -----------
Total current liabilities 3,132.1 2,732.3
----------- -----------
Other long-term liabilities 829.2 604.8
Long-term debt 839.3 794.7
Shareholders' equity 2,141.6 2,173.9
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 6,942.2 $ 6,305.7
=========== ===========
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Statements of Cash Flows
(Unaudited)
(In Millions)
Thirty-Nine Weeks Ended
------------------------
October 27, October 28,
2007 2006
---------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 470.6 $ 532.6
Depreciation and amortization 272.3 261.6
Deferred income tax provision (71.7) 16.2
Amortization of stock compensation 42.3 55.7
(Increase) in accounts receivable and other
current assets (110.1) (32.6)
(Increase) in merchandise inventories (710.0) (857.2)
Increase in accounts payable 399.6 389.3
Increase in accrued expenses and other
liabilities 246.1 81.4
Other 39.0 29.8
---------- -----------
Net cash provided by operating activities 578.1 476.8
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (406.1) (291.8)
Other 0.6 0.5
---------- -----------
Net cash (used in) investing activities (405.5) (291.3)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for repurchase of common stock (639.3) (429.0)
Proceeds from sale and issuance of common
stock 103.5 203.9
Cash dividends paid (112.3) (91.2)
Other 4.7 0.1
---------- -----------
Net cash (used in) financing activities (643.4) (316.2)
---------- -----------
Effect of exchange rate changes on cash 2.2 6.7
---------- -----------
Net (decrease) in cash and cash equivalents (468.6) (124.0)
Cash and cash equivalents at beginning of
year 856.7 465.6
---------- -----------
Cash and cash equivalents at end of period $ 388.1 $ 341.6
========== ===========
The TJX Companies, Inc. and Consolidated Subsidiaries
Selected Information by Major Business Segment
(Unaudited)
(In Thousands)
Thirteen Weeks Ended
-----------------------
October 27, October 28,
Net sales: 2007 2006
---------- ----------
Marmaxx $3,008,842 $2,947,106
Winners and HomeSense 558,903 477,334
T.K. Maxx 567,924 481,131
HomeGoods 371,775 335,972
A.J. Wright 151,274 148,499
Bob's Stores 78,773 82,901
---------- ----------
$4,737,491 $4,472,943
========== ==========
Segment profit or (loss):
Marmaxx $ 309,413 $ 313,799
Winners and HomeSense 68,493 60,700
T.K. Maxx 39,883 36,838
HomeGoods 25,088 17,601
A.J. Wright (2,272) (2,286)
Bob's Stores (2,933) (1,178)
---------- ----------
437,672 425,474
General corporate expense 34,231 42,964
Provision for Computer Intrusion related costs - -
Interest (income) expense, net 3,053 6,784
---------- ----------
Income from continuing operations before
provision for income taxes $ 400,388 $ 375,726
========== ==========
The TJX Companies, Inc. and Consolidated Subsidiaries
Selected Information by Major Business Segment
(Unaudited)
(In Thousands)
Thirty-Nine Weeks Ended
-------------------------
October 27, October 28,
Net sales: 2007 2006
----------- -----------
Marmaxx $ 8,553,973 $ 8,252,311
Winners and HomeSense 1,419,707 1,246,680
T.K. Maxx 1,495,032 1,235,891
HomeGoods 1,032,181 943,151
A.J. Wright 443,957 419,245
Bob's Stores 214,020 210,580
----------- -----------
$13,158,870 $12,307,858
=========== ===========
Segment profit or (loss):
Marmaxx $ 834,042 $ 791,583
Winners and HomeSense 142,884 130,263
T.K. Maxx 60,709 54,608
HomeGoods 44,174 30,333
A.J. Wright (6,968) (9,070)
Bob's Stores (12,978) (11,444)
----------- -----------
1,061,863 986,273
General corporate expense 90,283 103,450
Provision for Computer Intrusion related
costs 215,922 -
Interest (income) expense, net (423) 15,956
----------- -----------
Income from continuing operations before
provision for income taxes $ 756,081 $ 866,867
=========== ===========
The TJX Companies, Inc. and Consolidated Subsidiaries
Notes to Consolidated Condensed Statements
1. During the fourth quarter of fiscal 2007 TJX closed 34 of its
A.J. Wright stores and recorded the cost to close the stores, as well
as operating results of the stores, as discontinued operations.
Accordingly, the financial statements for the prior periods ended
October 28, 2006 have been adjusted to reclassify the operating
results of the closed stores as discontinued operations.
2. TJX suffered an unauthorized intrusion or intrusions into
portions of its computer system that process and store information
related to credit and debit card, check and unreceipted merchandise
return transactions (the intrusion or intrusions, collectively, the
"Computer Intrusion"), which was discovered during the fourth quarter
of fiscal 2007, and the related theft of customer data, primarily
related to portions of the transactions at its stores (other than
Bob's Stores) during the periods 2003 through June 2004 and mid-May
2006 through mid-December 2006.
During the first six months of fiscal 2008 TJX incurred after-tax
charges of $23 million for costs related to the Computer Intrusion. In
addition, in the second quarter ended July 28, 2007 TJX recorded an
after-tax reserve of $107 million for its estimated exposure to
potential losses related to the Computer Intrusion. This reserve
reflects the Company's estimation of probable losses in accordance
with generally accepted accounting principles based on information
available to the Company and includes an estimation of total potential
cash liabilities, from pending litigation, proceedings, investigations
and other claims, as well as legal and other costs and expenses,
arising from the Computer Intrusion. Thus for the nine months ended
October 27, 2007, net income includes after-tax charges of $130
million ($216 million pre-tax), or $0.28 per share, for costs related
to the Computer Intrusion.
3. During the third quarter ended October 28, 2007, TJX
repurchased 10.3 million shares of its common stock at a cost of $300
million. On a year-to-date basis through October 28, 2007, TJX has
repurchased 22.7 million shares at a cost of $650 million. Repurchases
were suspended during most of the first quarter as a result of the
discovery of the Computer Intrusion. TJX records the repurchase of its
stock on a cash basis and the amounts reflected in the financial
statements may vary from the above due to the timing of when the
repurchases are settled. Of the $300 million of repurchases made
during the third quarter, $86 million completed a $1 billion stock
repurchase program initially approved in October 2005 and $214 million
of TJX common stock repurchases were made under the $1 billion stock
repurchase program approved by the Board of Directors in January 2007.
4. In June 2006, the FASB issued FASB Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109" (FIN 48). FIN 48 clarifies the accounting for
uncertainties in income taxes recognized in an enterprise's financial
statement. FIN 48 requires that TJX determine whether it is more
likely than not that a tax position will be sustained upon examination
by the appropriate taxing authority and if so, recognize the largest
amount of benefit greater than 50% likely of being realized upon
ultimate settlement. FIN 48 must be applied to all existing tax
positions upon initial adoption. TJX adopted FIN 48 in the first
quarter ended April 28, 2007 and the net impact of adoption on its
financial position was immaterial. However, in connection with the
adoption, certain amounts that were historically netted within other
liabilities were reclassified to other assets.
CONTACT: The TJX Companies, Inc.
Sherry Lang
Senior Vice President
Investor and Public Relations
(508) 390-2323