The TJX Companies, Inc. Reports above-Plan Q3 FY16 Results with 5% Comp Sales Growth and Earnings Per Share of $.86
For the first nine months of Fiscal 2016, net sales were
Sales by Business Segment
The Company's comparable store sales and net sales by division, in the third quarter, were as follows:
Third Quarter Comparable Store Sales1,2 | Third Quarter Net Sales ($ in millions)3,4 | ||||||||
FY2016 | FY2015 | FY2016 | FY2015 | ||||||
In the U.S.: | |||||||||
Marmaxx5,6 | +3% | +1% | $4,927 | $4,674 | |||||
HomeGoods | +6% | +7% | $960 | $851 | |||||
International: | |||||||||
TJX Canada | +10% | +3% | $754 | $792 | |||||
TJX Europe | +7% | -1% | $1,114 | $1,050 | |||||
TJX | +5% | +2% | $7,753 | $7,366 | |||||
|
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
3Sales in
4Figures may not foot due to rounding.
5Combination of
6Net sales include
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 third quarter of Fiscal 2016 versus the prior year. The overall net impact of foreign currency exchange rates had a
For the first nine months of Fiscal 2016, the movement in foreign currency exchange rates had a three percentage point negative impact on consolidated net sales growth. The overall net impact of foreign currency exchange rates had an
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.
The foreign currency exchange rate impact to earnings per share does not include the impact currency exchange rates have on various transactions, which we refer to as "transactional foreign exchange."
Margins
For the third quarter of Fiscal 2016, the Company's consolidated pretax profit margin was 12.1%, a 0.9 percentage point decrease compared with the prior year.
Gross profit margin for the third quarter of Fiscal 2016 was 29.0%, down 0.4 percentage points versus the prior year. The decrease was primarily due to transactional foreign exchange at the Company's international divisions and increased supply chain costs related to a substantial increase in units sold during the quarter. Merchandise margins remained strong.
Selling, general and administrative costs as a percent of sales were 16.7%, up 0.5 percentage points versus the prior year's ratio, primarily due to the Company's wage initiative and increased supply chain costs, as the Company had anticipated.
Inventory
Total inventories as of
Shareholder Distributions
During the third quarter, the Company repurchased a total of
Fourth Quarter and Full Year Fiscal 2016 Outlook
For the fourth quarter of Fiscal 2016, the Company expects diluted earnings per share to be in the range of
For the fiscal year ending
The Company's earnings guidance for the fourth quarter and full year Fiscal 2016 assumes that currency exchange rates will remain unchanged from the levels at the beginning of the fourth quarter.
Stores by Concept
During the third quarter ended
Store Locations Third Quarter | Gross Square Feet* Third Quarter (in millions) | ||||||||
Beginning | End | Beginning | End | ||||||
In the U.S.: | |||||||||
T.J. Maxx | 1,130 | 1,149 | 32.4 | 32.8 | |||||
Marshalls | 990 | 1,001 | 30.0 | 30.3 | |||||
HomeGoods | 503 | 522 | 12.5 | 12.9 | |||||
Sierra Trading Post | 6 | 7 | 0.2 | 0.2 | |||||
In Canada: | |||||||||
Winners | 240 | 245 | 6.8 | 6.9 | |||||
HomeSense | 97 | 101 | 2.3 | 2.4 | |||||
Marshalls | 39 | 41 | 1.2 | 1.2 | |||||
In Europe: | |||||||||
T.K. Maxx | 423 | 454 | 13.0 | 13.8 | |||||
HomeSense | 33 | 39 | 0.7 | 0.8 | |||||
In Australia: | |||||||||
Trade Secret** | N/A | 35 | N/A | 0.8 | |||||
TJX | 3,461 | 3,594 | 99.0 | 102.1 | |||||
*Square feet figures may not foot due to rounding. **TJX acquired Trade Secret on
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 | |||||||||||||
13 Weeks Ended | 39 Weeks Ended | ||||||||||||
October 31, 2015 | November 1, 2014 | October 31, 2015 | November 1, 2014 | ||||||||||
Net sales | $ | 7,753,495 | $ | 7,366,066 | $ | 21,982,863 | $ | 20,774,454 | |||||
Cost of sales, including buying and occupancy costs | 5,506,899 | 5,203,629 | 15,646,331 | 14,817,485 | |||||||||
Selling, general and administrative expenses | 1,292,401 | 1,193,297 | 3,708,596 | 3,389,105 | |||||||||
Loss on early extinguishment of debt | - | - | - | 16,830 | |||||||||
Interest expense, net | 13,005 | 10,040 | 35,437 | 30,785 | |||||||||
Income before provision for income taxes | 941,190 | 959,100 | 2,592,499 | 2,520,249 | |||||||||
Provision for income taxes | 353,934 | 364,143 | 981,307 | 953,351 | |||||||||
Net income | $ | 587,256 | $ | 594,957 | $ | 1,611,192 | $ | 1,566,898 | |||||
Diluted earnings per share | $ | 0.86 | $ | 0.85 | $ | 2.35 | $ | 2.22 | |||||
Cash dividends declared per share | $ | 0.21 | $ | 0.175 | $ | 0.63 | $ | 0.525 | |||||
Weighted average common shares – diluted | 680,844 | 701,005 | 686,072 | 706,122 | |||||||||
The TJX Companies, Inc. and Consolidated Subsidiaries | |||||||
October 31, 2015 | November 1, 2014 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,723.3 | $ | 2,153.6 | |||
Short-term investments | 399.7 | 277.2 | |||||
Accounts receivable and other current assets | 661.6 | 642.2 | |||||
Current deferred income taxes, net | 120.9 | 123.0 | |||||
Merchandise inventories | 4,415.3 | 3,958.6 | |||||
Total current assets | 7,320.8 | 7,154.6 | |||||
Property, net of depreciation | 4,057.4 | 3,849.8 | |||||
Other assets | 292.3 | 276.9 | |||||
Goodwill and tradename, net of amortization | 307.9 | 310.7 | |||||
TOTAL ASSETS | $ | 11,978.4 | $ | 11,592.0 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,684.2 | $ | 2,554.4 | |||
Accrued expenses and other current liabilities | 2,031.8 | 1,835.2 | |||||
Total current liabilities | 4,716.0 | 4,389.6 | |||||
Other long-term liabilities | 907.1 | 741.1 | |||||
Non-current deferred income taxes, net | 380.8 | 463.7 | |||||
Long-term debt | 1,624.0 | 1,623.8 | |||||
Shareholders' equity | 4,350.5 | 4,373.8 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 11,978.4 | $ | 11,592.0 | |||
The TJX Companies, Inc. and Consolidated Subsidiaries | |||||||||
39 Weeks Ended | |||||||||
October 31, 2015 | November 1, 2014 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net income | $ | 1,611.2 | $ | 1,566.9 | |||||
Depreciation and amortization | 453.7 | 438.2 | |||||||
Loss on early extinguishment of debt | - | 16.8 | |||||||
Deferred income tax provision | (39.9 | ) | 7.5 | ||||||
Share-based compensation | 71.1 | 67.7 | |||||||
(Increase) in accounts receivable and other assets | (104.8 | ) | (87.4 | ) | |||||
(Increase) in merchandise inventories | (1,197.8 | ) | (1,019.4 | ) | |||||
Increase in accounts payable | 677.2 | 799.8 | |||||||
Increase in accrued expenses and other liabilities | 206.7 | 95.5 | |||||||
Other | (20.8 | ) | (60.0 | ) | |||||
Net cash provided by operating activities | 1,656.6 | 1,825.6 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Property additions | (650.6 | ) | (705.9 | ) | |||||
Cash paid for acquisition of Trade Secret | (57.1 | ) | - | ||||||
Purchases of investments | (642.7 | ) | (315.8 | ) | |||||
Sales and maturities of investments | 501.6 | 314.6 | |||||||
Net cash (used in) investing activities | (848.8 | ) | (707.1 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Proceeds from issuance of long-term debt | - | 749.5 | |||||||
Payments on early extinguishment of debt | - | (416.4 | ) | ||||||
Payments for repurchase of common stock | (1,296.1 | ) | (1,214.2 | ) | |||||
Proceeds from issuance of common stock | 81.4 | 90.3 | |||||||
Cash dividends paid | (404.1 | ) | (345.7 | ) | |||||
Other | 54.2 | 45.9 | |||||||
Net cash (used in) financing activities | (1,564.6 | ) | (1,090.6 | ) | |||||
Effect of exchange rate changes on cash | (13.7 | ) | (24.0 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (770.5 | ) | 3.9 | ||||||
Cash and cash equivalents at beginning of year | 2,493.8 | 2,149.7 | |||||||
Cash and cash equivalents at end of period | $ | 1,723.3 | $ | 2,153.6 | |||||
The TJX Companies, Inc. and Consolidated Subsidiaries | |||||||||||||
13 Weeks Ended | 39 Weeks Ended | ||||||||||||
October 31, 2015 | November 1, 2014 | October 31, 2015 | November 1, 2014 | ||||||||||
Net sales: | |||||||||||||
In the United States: | |||||||||||||
Marmaxx | $ | 4,926,507 | $ | 4,673,718 | $ | 14,227,800 | $ | 13,402,351 | |||||
HomeGoods | 959,844 | 851,045 | 2,735,415 | 2,381,268 | |||||||||
TJX Canada | 753,630 | 791,725 | 2,073,189 | 2,096,069 | |||||||||
TJX Europe | 1,113,514 | 1,049,578 | 2,946,459 | 2,894,766 | |||||||||
Total net sales | $ | 7,753,495 | $ | 7,366,066 | $ | 21,982,863 | $ | 20,774,454 | |||||
Segment profit: | |||||||||||||
In the United States: | |||||||||||||
Marmaxx | $ | 678,343 | $ | 679,929 | $ | 2,046,192 | $ | 1,988,617 | |||||
HomeGoods | 134,550 | 117,922 | 367,984 | 310,762 | |||||||||
TJX Canada | 113,152 | 136,480 | 278,005 | 275,527 | |||||||||
TJX Europe | 115,290 | 115,313 | 192,519 | 209,188 | |||||||||
Total segment profit | 1,041,335 | 1,049,644 | 2,884,700 | 2,784,094 | |||||||||
General corporate expense | 87,140 | 80,504 | 256,764 | 216,230 | |||||||||
Loss on early extinguishment of debt | - | - | - | 16,830 | |||||||||
Interest expense, net | 13,005 | 10,040 | 35,437 | 30,785 | |||||||||
Income before provision for income taxes | $ | 941,190 | $ | 959,100 | $ | 2,592,499 | $ | 2,520,249 |
Notes to Consolidated Condensed Statements
1. During the third quarter ended
2. On
3. During last year's second quarter the Company issued
View source version on businesswire.com: http://www.businesswire.com/news/home/20151117006066/en/
Source:
The TJX Companies, Inc.
Debra McConnell
Global Communications
(508) 390-2323