The TJX Companies, Inc. Reports Above-Plan Q1 FY16 Results with 5% Comp Sales Growth and 8% Increase in Earnings Per Share; Raises Full Year EPS and Comp Guidance
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 Sales1,2 | Net Sales ($ in millions)3,4 | ||||||
FY2016 | FY2015 | FY2016 | FY2015 | ||||
In the U.S.: | |||||||
Marmaxx5,6 | +3% | 0% | $4,495 | $4,235 | |||
HomeGoods | +9% | +3% | $880 | $757 | |||
International: | |||||||
TJX Canada | +11% | -1% | $620 | $608 | |||
TJX Europe | +3% | +8% | $870 | $891 | |||
TJX | +5% | +1% | $6,866 | $6,491 | |||
|
1Comparable store sales outside the U.S. calculated on a constant currency basis, which removes the effect of changes in currency exchange rates. 2Comparable store sales exclude
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 can have a material effect on the magnitude of these translations and adjustments when there is significant volatility in currency exchange rates.
The movement in foreign currency exchange rates had a three percentage point negative impact on consolidated net sales growth in the first quarter of Fiscal 2016 versus the prior year. 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 first quarter of Fiscal 2016, the Company's consolidated pretax profit margin was 11.1%, a 0.2 percentage point decrease compared with the prior year's 11.3% margin.
Gross profit margin for the first quarter of Fiscal 2016 was 28.3%, up 0.4 percentage points versus the prior year, primarily due to strong merchandise margin improvement and, to a lesser extent, buying and occupancy leverage.
Selling, general and administrative costs as a percent of sales were 17.0%, up 0.5 percentage points versus the prior year's ratio, primarily due to a combination of higher employee payroll costs, incremental investments and pension costs as the Company had anticipated.
Inventory
Total inventories as of
Shareholder Distributions
During the first quarter, the Company repurchased a total of
Second Quarter and Full Year Fiscal 2016 Outlook
For the second quarter of Fiscal 2016, the Company expects diluted earnings per share to be in the range of
The Company is raising its full year guidance to reflect its strong first quarter results. For the fiscal year ending
The Company's earnings guidance for the second quarter and full year Fiscal 2016 assumes that currency exchange rates will remain unchanged from the levels at the beginning of the second quarter.
Stores by Concept
During the first quarter ended
Store Locations | Gross Square Feet* | |||||||||||
First Quarter | First Quarter | |||||||||||
(in millions) | ||||||||||||
Beginning | End | Beginning | End | |||||||||
In the U.S.: | ||||||||||||
T.J. Maxx | 1,119 | 1,126 | 32.1 | 32.4 | ||||||||
Marshalls | 975 | 987 | 29.7 | 30.0 | ||||||||
HomeGoods | 487 | 498 | 12.1 | 12.4 | ||||||||
Sierra Trading Post | 6 | 6 | 0.2 | 0.2 | ||||||||
TJX Canada: | ||||||||||||
Winners | 234 | 239 | 6.7 | 6.8 | ||||||||
HomeSense | 96 | 97 | 2.3 | 2.3 | ||||||||
Marshalls | 38 | 39 | 1.2 | 1.2 | ||||||||
TJX Europe: | ||||||||||||
T.K. Maxx | 407 | 416 | 12.6 | 12.8 | ||||||||
HomeSense | 33 | 33 | 0.7 | 0.7 | ||||||||
TJX | 3,395 | 3,441 | 97.5 | 98.7 | ||||||||
*Square feet figures may not foot due to rounding.
About
Fiscal 2016
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 are 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 and business expansion and management of large size and scale; customer trends and preferences; marketing, advertising and promotional programs; competition; personnel recruitment, training and retention; labor costs and workforce challenges; economic conditions and consumer spending; data security; information systems and new technology; adverse or unseasonable weather; serious disruptions or catastrophic events; seasonal influences; corporate and retail 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; mergers, acquisitions, or business investments and divestitures, closings or business consolidations; 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 Ended | |||||||
May 2, 2015 | May 3, 2014 | ||||||
Net sales | $ | 6,865,637 | $ | 6,491,176 | |||
Cost of sales, including buying and occupancy costs | 4,920,241 | 4,678,000 | |||||
Selling, general and administrative expenses | 1,168,657 | 1,073,050 | |||||
Interest expense, net | 11,624 | 9,595 | |||||
Income before provision for income taxes | 765,115 | 730,531 | |||||
Provision for income taxes | 290,514 | 276,214 | |||||
Net income | $ | 474,601 | $ | 454,317 | |||
Diluted earnings per share | $ | 0.69 | $ | 0.64 | |||
Cash dividends declared per share | $ | 0.21 | $ | 0.175 | |||
Weighted average common shares – diluted | 691,206 | 712,902 | |||||
The TJX Companies, Inc. and Consolidated Subsidiaries Condensed Balance Sheets (Unaudited) (In Millions) | |||||||||
May 2, 2015 | May 3, 2014 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 2,260.0 | $ | 2,059.3 | |||||
Short-term investments | 328.8 | 259.9 | |||||||
Accounts receivable and other current assets | 604.1 | 574.7 | |||||||
Current deferred income taxes, net | 147.6 | 133.1 | |||||||
Merchandise inventories | 3,531.6 | 3,208.5 | |||||||
Total current assets | 6,872.1 | 6,235.5 | |||||||
Property, net of depreciation | 3,936.7 | 3,645.6 | |||||||
Other assets | 247.8 | 236.7 | |||||||
Goodwill and tradename, net of amortization | 309.3 | 312.1 | |||||||
TOTAL ASSETS | $ | 11,365.9 | $ | 10,429.9 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 2,153.3 | $ | 1,956.4 | |||||
Accrued expenses and other current liabilities | 1,983.2 | 1,748.9 | |||||||
Total current liabilities | 4,136.5 | 3,705.3 | |||||||
Other long-term liabilities | 878.4 | 691.9 | |||||||
Non-current deferred income taxes, net | 436.8 | 475.0 | |||||||
Long-term debt | 1,623.9 | 1,274.2 | |||||||
Shareholders' equity | 4,290.3 | 4,283.5 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 11,365.9 | $ | 10,429.9 | |||||
The TJX Companies, Inc. and Consolidated Subsidiaries Condensed Statements of Cash Flows (Unaudited) (In Millions) | |||||||||
13 Weeks Ended | |||||||||
May 2, 2015 | May 3, 2014 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net income | $ | 474.6 | $ | 454.3 | |||||
Depreciation and amortization | 148.5 | 144.2 | |||||||
Deferred income tax provision | (17.7 | ) | (6.7 | ) | |||||
Share-based compensation | 21.2 | 19.8 | |||||||
(Increase) in accounts receivable and other assets | (46.0 | ) | (26.2 | ) | |||||
(Increase) in merchandise inventories | (298.7 | ) | (226.0 | ) | |||||
Increase in accounts payable | 135.6 | 175.4 | |||||||
Increase (decrease) in accrued expenses and other liabilities | 49.6 | (46.6 | ) | ||||||
Other | (19.6 | ) | (5.2 | ) | |||||
Net cash provided by operating activities | 447.5 | 483.0 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Property additions | (201.2 | ) | (193.4 | ) | |||||
Purchases of investments | (95.0 | ) | (92.8 | ) | |||||
Sales and maturities of investments | 53.8 | 121.9 | |||||||
Net cash (used in) investing activities | (242.4 | ) | (164.3 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Payments for repurchase of common stock | (419.9 | ) | (360.0 | ) | |||||
Proceeds from issuance of common stock | 37.3 | 20.5 | |||||||
Cash dividends paid | (120.4 | ) | (102.1 | ) | |||||
Other | 28.4 | 12.8 | |||||||
Net cash (used in) financing activities | (474.6 | ) | (428.8 | ) | |||||
Effect of exchange rate changes on cash | 35.7 | 19.7 | |||||||
Net increase in cash and cash equivalents | (233.8 | ) | (90.4 | ) | |||||
Cash and cash equivalents at beginning of year | 2,493.8 | 2,149.7 | |||||||
Cash and cash equivalents at end of period | $ | 2,260.0 | $ | 2,059.3 | |||||
The TJX Companies, Inc. and Consolidated Subsidiaries Selected Information by Major Business Segment (Unaudited) (In Thousands) | |||||||||
13 Weeks Ended | |||||||||
May 2, 2015 | May 3, 2014 | ||||||||
Net sales: | |||||||||
In the United States: | |||||||||
Marmaxx | $ | 4,495,410 | $ | 4,234,755 | |||||
HomeGoods | 880,193 | 757,152 | |||||||
TJX Canada | 620,212 | 608,420 | |||||||
TJX Europe | 869,822 | 890,849 | |||||||
Total net sales | $ | 6,865,637 | $ | 6,491,176 | |||||
Segment profit: | |||||||||
In the United States: | |||||||||
Marmaxx | $ | 652,303 | $ | 623,074 | |||||
HomeGoods | 121,299 | 98,205 | |||||||
TJX Canada | 45,172 | 44,023 | |||||||
TJX Europe | 26,355 | 38,261 | |||||||
Total segment profit | 845,129 | 803,563 | |||||||
General corporate expenses | 68,390 | 63,437 | |||||||
Interest expense, net | 11,624 | 9,595 | |||||||
Income before provision for income taxes | $ | 765,115 | $ | 730,531 | |||||
Notes to Consolidated Condensed Statements
1. During the first quarter ended
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Source:
The TJX Companies, Inc.
Media:
Doreen Thompson, 508-390-2323
or
Investors:
Jeff Botte, 508-390-2323