The TJX Companies, Inc. Reports Fiscal 2014 EPS Growth of 15% over 24% Increase Last Year on an Adjusted Basis; Announces New $2.0 Billion Stock Repurchase Program; Plans 21% Increase in Dividend
Net sales for the 52-week fiscal year were
For the 13-week fourth quarter ended
Meyrowitz continued, “We begin a new fiscal year in an excellent
position to pursue our near- and long-term opportunities. Our
inventories are extremely lean, which affords us enormous flexibility to
buy into the plentiful opportunities we see in the marketplace for
branded merchandise. We have many exciting initiatives planned this
year, and above all, will continue to offer consumers amazing values on
great fashions and brands! As we approach
Increase in Shareholder Distributions
The Company also announced today its plan to repurchase approximately
The Company also intends to increase the regular quarterly dividend on
its common stock to be declared in
Sales by Business Segment
The Company’s comparable store sales and net sales by division for the full year were as follows:
Full Year | Full Year | |||||||
Comparable Store Sales1 | Net Sales ($ in millions)2,3 | |||||||
FY2014 |
FY2013 |
FY2014 |
FY2013 |
|||||
In the U.S.: | ||||||||
Marmaxx4,5 | +3% | +6% | $17,930 | $17,011 | ||||
HomeGoods | +7% | +7% | $2,994 | $2,657 | ||||
International: | ||||||||
TJX Canada | 0% | +5% | $2,878 | $2,926 | ||||
TJX Europe | +6% | +10% | $3,622 | $3,284 | ||||
TJX | +3% | +7% | $27,423 | $25,878 |
1Comparable store sales outside the U.S. calculated on a
constant currency basis, which removes the effect of changes in currency
exchange rates. For FY2013, comparable store sales are for the 52-week
period ended
The Company’s comparable store sales and net sales by division, in the fourth quarter, were as follows:
Fourth Quarter | Fourth Quarter | |||||||
Comparable Store Sales1 | Net Sales ($ in millions)2,3 | |||||||
FY2014 |
FY2013 |
FY2014 |
FY2013 |
|||||
In the U.S.: | ||||||||
Marmaxx4,5 | +3% | +4% | $5,014 | $4,985 | ||||
HomeGoods | +4% | +5% | $875 | $826 | ||||
International: | ||||||||
TJX Canada | -2% | +3% | $767 | $856 | ||||
TJX Europe | +9% | +7% | $1,153 | $1,057 | ||||
TJX | +3% | +4% | $7,809 | $7,724 |
1Comparable store sales outside the U.S. calculated on a
constant currency basis, which removes the effect of changes in currency
exchange rates. For the Fiscal 2013 fourth quarter, comparable store
sales are for the 13-week period ended
Impact of Foreign Currency Exchange Rates
Changes in foreign currency exchange rates affect the translation of sales and earnings of the Company’s international businesses into U.S. dollars for financial reporting purposes. In addition, ordinary-course, inventory-related hedging instruments are marked to market at the end of each quarter. Changes in currency exchange rates affect the magnitude of these translations and adjustments, and can have a material impact when there is significant volatility in currency exchange rates.
The movement in foreign currency exchange rates had a neutral impact on
consolidated net sales growth for the full Fiscal 2014 year versus the
prior year. The overall net impact of foreign currency exchange rates
had a
The movement in foreign currency exchange rates had a neutral impact on
consolidated net sales growth in the fourth quarter of Fiscal 2014
versus the prior year’s fourth quarter. The overall net impact of
foreign currency exchange rates had a
A table detailing the impact of foreign currency on TJX pretax earnings and margins, as well as those of its international businesses, can be found in the Investor Information section of the Company’s website, tjx.com.
Margins
For the full year Fiscal 2014, the Company’s consolidated pretax profit margin was 12.1%, a 0.2 percentage point increase over the prior year’s 11.9% margin, which included an approximately 0.2 percentage point benefit from the 53rd week in Fiscal 2013. On a 52-week adjusted basis, pretax profit margins increased 0.4 percentage points.
The gross profit margin for Fiscal 2014 was 28.5%, up 0.1 percentage points over the prior year. Selling, general and administrative costs as a percent of sales were 16.3%, a 0.1 percentage point improvement over the prior year’s ratio. Again, last year’s results included the benefit of the 53rd week in Fiscal 2013.
For the fourth quarter of Fiscal 2014, the Company’s consolidated pretax profit margin was 12.0%, a 0.5 percentage point decrease compared with the prior year’s 12.5% margin, which included an approximately 0.6 percentage point benefit from the extra week in the fourth quarter of Fiscal 2013. On a 13-week adjusted basis, pretax profit margins increased 0.1 percentage points.
The gross profit margin for the fourth quarter of Fiscal 2014 was 27.6%, down 1.0 percentage points versus the prior year. This decline primarily reflects the benefit from the extra week last year. Gross margins were also impacted by a decrease in merchandise margins as the Company aggressively priced merchandise in a highly promotional holiday selling environment and took markdowns in January to end the year with very clean inventories. Selling, general and administrative costs as a percent of sales were 15.6%, a 0.4 percentage point improvement over the prior year’s ratio, due to year-over-year favorability from certain one-time expenses detailed in the fourth quarter last year.
Inventory
Total inventories as of
Full Year and First Quarter Fiscal 2015 Outlook
For the fiscal year ending
For the first quarter of Fiscal 2015, the Company expects diluted
earnings per share to be in the range of
The Company’s earnings guidance for the first quarter and full year Fiscal 2015 assumes that currency exchange rates will remain unchanged from current levels.
Stores by Concept
During the fiscal year ended
Store Locations | Gross Square Feet* | |||||||
FY2014 | FY2014 | |||||||
(in millions) | ||||||||
Beginning | End | Beginning | End | |||||
In the U.S.: | ||||||||
T.J. Maxx | 1,036 | 1,079 | 30.2 | 31.2 | ||||
Marshalls | 904 | 942 | 28.0 | 28.9 | ||||
HomeGoods | 415 | 450 | 10.4 | 11.3 | ||||
Sierra Trading Post | 4 | 4 | 0.1 | 0.1 | ||||
TJX Canada: | ||||||||
Winners | 222 | 227 | 6.5 | 6.6 | ||||
HomeSense | 88 | 91 | 2.1 | 2.2 | ||||
Marshalls | 14 | 27 | 0.5 | 0.8 | ||||
TJX Europe: | ||||||||
T.K. Maxx | 343 | 371 | 10.8 | 11.6 | ||||
HomeSense | 24 | 28 | 0.5 | 0.6 | ||||
TJX | 3,050 | 3,219 | 89.1 | 93.3 |
*Square feet figures may not foot due to rounding.
About
Fiscal Year and Fourth Quarter 2014 Earnings Conference Call
At
Non-GAAP Financial Information
The Company has used non-GAAP financial measures in this press release.
Adjusted financial measures refer to financial information adjusted to
exclude from financial measures prepared in accordance with accounting
principles generally accepted in
Important Information at Website
Archived versions of the Company’s conference calls are available in the Investor Information section of tjx.com after they are no longer available by telephone as well as reconciliations of non-GAAP financial measures to GAAP financial measures, and other financial information. The Company routinely posts information that may be important to investors in the Investor Information section at tjx.com. The Company encourages investors to consult that section of its website regularly.
Forward-looking Statement
SAFE HARBOR STATEMENT 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: execution of buying strategy and
inventory management; operational expansion and management of large size
and scale; customer trends and preferences; market, banner, geographic
and category expansion; marketing, advertising and promotional programs;
competition; personnel recruitment and retention and costs of labor;
global economic conditions and consumer spending; data security;
information systems and new technology; seasonal influences; adverse or
unseasonable weather; serious disruptions and catastrophic events;
corporate and banner reputation; merchandise quality and safety;
expanding international operations; merchandise importing; commodity
pricing; fluctuations in currency exchange rates; fluctuations in
quarterly operating results and market expectations; acquisitions,
business investments and divestitures; compliance with laws, regulations
and orders; changes in laws and regulations; outcomes of litigation,
legal matters and proceedings; tax matters; real estate activities; cash
flow and other factors that may be described in our filings with the
The TJX Companies, Inc. and Consolidated Subsidiaries |
||||||||||||
Financial Summary |
||||||||||||
(Unaudited) |
||||||||||||
(In Thousands Except Per Share Amounts) |
||||||||||||
13 Weeks |
14 Weeks |
52 Weeks |
53 Weeks |
|||||||||
February 1,
2014 |
February 2,
2013 |
February 1,
2014 |
February 2,
2013 |
|||||||||
Net sales | $ | 7,808,787 | $ | 7,723,814 | $ | 27,422,696 | $ | 25,878,372 | ||||
Cost of sales, including buying and occupancy costs | 5,650,300 | 5,514,526 | 19,605,037 | 18,521,400 | ||||||||
Selling, general and administrative expenses | 1,215,192 | 1,239,524 | 4,467,089 | 4,250,446 | ||||||||
Interest expense, net | 7,509 | 5,077 | 31,081 | 29,175 | ||||||||
Income before provision for income taxes | 935,786 | 964,687 | 3,319,489 | 3,077,351 | ||||||||
Provision for income taxes | 353,494 | 359,843 | 1,182,093 | 1,170,664 | ||||||||
Net income | $ | 582,292 | $ | 604,844 | $ | 2,137,396 | $ | 1,906,687 | ||||
Diluted earnings per share | $ | 0.81 | $ | 0.82 | $ | 2.94 | $ | 2.55 | ||||
Cash dividends declared per share | $ | 0.145 | $ | 0.115 | $ | 0.58 | $ | 0.46 | ||||
Weighted average common shares – diluted | 719,492 | 737,912 | 726,376 | 747,555 | ||||||||
The TJX Companies, Inc. and Consolidated Subsidiaries |
||||||
Condensed Balance Sheets |
||||||
(Unaudited) |
||||||
(In Millions) |
||||||
February 1, |
February 2, |
|||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 2,149.7 | $ | 1,812.0 | ||
Short-term investments | 294.7 | 235.8 | ||||
Accounts receivable and other current assets | 555.5 | 553.3 | ||||
Current deferred income taxes, net | 101.6 | 96.2 | ||||
Merchandise inventories | 2,966.5 | 3,014.2 | ||||
Total current assets | 6,068.0 | 5,711.5 | ||||
Property and capital leases, net of depreciation | 3,594.5 | 3,223.3 | ||||
Other assets | 225.8 | 260.8 | ||||
Goodwill and tradename, net of amortization | 312.7 | 316.3 | ||||
TOTAL ASSETS | $ | 10,201.0 | $ | 9,511.9 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 1,771.3 | $ | 1,930.6 | ||
Accrued expenses and other current liabilities | 1,746.5 | 1,830.0 | ||||
Total current liabilities | 3,517.8 | 3,760.6 | ||||
Other long-term liabilities | 733.0 | 961.3 | ||||
Non-current deferred income taxes, net | 446.1 | 349.5 | ||||
Long-term debt | 1,274.2 | 774.6 | ||||
Shareholders’ equity | 4,229.9 | 3,665.9 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 10,201.0 | $ | 9,511.9 | ||
The TJX Companies, Inc. and Consolidated Subsidiaries |
||||||||
Condensed Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
(In Millions) |
||||||||
52 Weeks |
53 Weeks |
|||||||
February 1, |
February 2, |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 2,137.4 | $ | 1,906.7 | ||||
Depreciation and amortization | 548.8 | 508.9 | ||||||
Deferred income tax provision | 52.2 | 13.3 | ||||||
Share-based compensation | 76.1 | 64.4 | ||||||
Decrease (increase) in accounts receivable and other assets | 8.6 | (72.1 | ) | |||||
Decrease in merchandise inventories | 35.2 | 27.2 | ||||||
(Decrease) increase in accounts payable | (152.3 | ) | 211.7 | |||||
(Decrease) increase in accrued expenses and other liabilities | (18.6 | ) | 444.9 | |||||
Other | (97.1 | ) | (59.4 | ) | ||||
Net cash provided by operating activities | 2,590.3 | 3,045.6 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (946.7 | ) | (978.2 | ) | ||||
Purchases of short-term investments | (478.1 | ) | (355.7 | ) | ||||
Sales and maturities of short-term investments | 386.5 | 213.0 | ||||||
Acquisition of Sierra Trading Post, less cash acquired | - | (190.4 | ) | |||||
Other | 2.7 | 34.5 | ||||||
Net cash (used in) investing activities | (1,035.6 | ) | (1,276.8 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of long-term debt | 499.6 | - | ||||||
Payments for repurchase of common stock | (1,471.1 | ) | (1,345.1 | ) | ||||
Proceeds from issuance of common stock | 146.5 | 133.8 | ||||||
Cash dividends paid | (393.8 | ) | (323.9 | ) | ||||
Other | 75.0 | 59.6 | ||||||
Net cash (used in) financing activities | (1,143.8 | ) | (1,475.6 | ) | ||||
Effect of exchange rate changes on cash | (73.2 | ) | 11.7 | |||||
Net increase in cash and cash equivalents | 337.7 | 304.9 | ||||||
Cash and cash equivalents at beginning of year | 1,812.0 | 1,507.1 | ||||||
Cash and cash equivalents at end of year | $ | 2,149.7 | $ | 1,812.0 | ||||
The TJX Companies, Inc. and Consolidated Subsidiaries |
||||||||||||
Selected Information by Major Business Segment |
||||||||||||
(Unaudited) |
||||||||||||
(In Thousands) |
||||||||||||
13 Weeks |
14 Weeks |
52 Weeks |
53 Weeks |
|||||||||
February 1, |
February 2, |
February 1, |
February 2, |
|||||||||
Net sales: | ||||||||||||
In the United States: | ||||||||||||
Marmaxx | $ | 5,014,307 | $ | 4,984,891 | $ | 17,929,576 | $ | 17,011,409 | ||||
HomeGoods | 874,528 | 826,161 | 2,993,718 | 2,657,111 | ||||||||
TJX Canada | 767,091 | 856,112 | 2,877,834 | 2,925,991 | ||||||||
TJX Europe | 1,152,861 | 1,056,650 | 3,621,568 | 3,283,861 | ||||||||
Total net sales | $ | 7,808,787 | $ | 7,723,814 | $ | 27,422,696 | $ | 25,878,372 | ||||
Segment profit: | ||||||||||||
In the United States: | ||||||||||||
Marmaxx | $ | 672,046 | $ | 723,762 | $ | 2,612,693 | $ | 2,486,274 | ||||
HomeGoods | 119,371 | 117,869 | 386,541 | 324,623 | ||||||||
TJX Canada | 111,589 | 123,976 | 405,363 | 414,914 | ||||||||
TJX Europe | 117,517 | 102,420 | 275,453 | 215,713 | ||||||||
Total segment profit | 1,020,523 | 1,068,027 | 3,680,050 | 3,441,524 | ||||||||
General corporate expenses | 77,228 | 98,263 | 329,480 | 334,998 | ||||||||
Interest expense, net | 7,509 | 5,077 | 31,081 | 29,175 | ||||||||
Income before provision for income taxes | $ | 935,786 | $ | 964,687 | $ | 3,319,489 | $ | 3,077,351 | ||||
Notes to
Consolidated Condensed Statements
-
During the fourth quarter ended
February 1, 2014 , TJX repurchased 7.3 million shares of its common stock at a cost of$455 million . During the year endedFebruary 1, 2014 , TJX repurchased 27.0 million shares of its common stock at a cost of$1.5 billion . As of the fiscal year endedFebruary 1, 2014 , there was$970 million remaining under the current$1.5 billion stock repurchase program approved inFebruary 2013 and onJanuary 31, 2014 the Company’s Board of Directors approved an additional$2 billion stock repurchase program. TJX records the repurchase of its stock on a cash basis, and the amounts reflected in the financial statements may vary from the above amounts due to the timing of settlement of repurchases. -
On
December 21, 2012 TJX purchasedSierra Trading Post (STP), an off-price internet retailer. The purchase price, after adjusting for customary post closing adjustments, amounted to$193 million . The operating results of STP since the date of acquisition are not material and have been included with the Company’s Marmaxx segment. -
On
May 2, 2013 TJX issued$500 million of 2.50% ten year notes.
Source:
The TJX Companies, Inc.
Debra McConnell
Global Communications
(508)
390-2323