The TJX Companies, Inc. Reports Above-Plan Q4 FY15 EPS Growth of 15% and Full Year FY15 Adjusted EPS Growth of 12%; Announces Plans to Increase Dividend 20% and Stock Buyback to $1.8B to $1.9B; Provides FY16 Guidance and Reiterates Long-Term Growth Model
For the 52-week fiscal year ended
Meyrowitz continued, "As always, we're pursuing many initiatives to drive sales and customer traffic, and we have numerous growth vehicles that are working well. In 2015, we are taking a prudent approach to planning our earnings per share growth. We are continuing to plan comp sales increases conservatively while we simultaneously strive to surpass our goals. Further, we will continue to reinvest in our growth initiatives for today and the future, and we are making additional investments in our store Associates to maintain our focus on offering our customers an excellent shopping experience. Like other major international retailers, our 2015 plans also reflect an expected negative impact from foreign currency exchange rates. Our underlying business remains very strong and we are reiterating our 10% to 13% long-term annual EPS growth model. We see tremendous U.S. and international potential for our Company. We are excited to be entering our seventh country,
Increase in Shareholder Distributions
The Company intends to increase the regular quarterly dividend on its common stock to be declared in
The Company also announced today its plan to repurchase approximately
Increased Investments in
The Company announced today an important initiative on wages for its U.S. store Associates, including its
Sales by Business Segment
The Company's comparable store sales and net sales by division, in the fourth quarter, were as follows:
Fourth Quarter | Fourth Quarter | |||||||||||||||
Comparable Store Sales1,2 | Net Sales ($ in millions)3,4 | |||||||||||||||
FY2015 | FY2014 | FY2015 | FY2014 | |||||||||||||
In the U.S.: | ||||||||||||||||
Marmaxx5,6 | +3% | +3% | $5,286 | $5,014 | ||||||||||||
HomeGoods | +11% | +4% | $1,033 | $875 | ||||||||||||
International: | ||||||||||||||||
TJX Canada | +7% | -2% | $788 | $767 | ||||||||||||
TJX Europe | +2% | +8% | $1,198 | $1,153 | ||||||||||||
TJX | +4% | +3% | $8,304 | $7,809 |
1Comparable store sales outside the U.S. calculated on a constant currency basis, which removes the effect of changes in currency exchange rates. 2Comparable store sales exclude e-commerce sales. 3Sales in
The Company's comparable store sales and net sales by division for the full year were as follows:
Full Year | Full Year | ||||||||||||||||
Comparable Store Sales1,2 | Net Sales ($ in millions)3,4 | ||||||||||||||||
FY2015 | FY2014 | FY2015 | FY2014 | ||||||||||||||
In the U.S.: | |||||||||||||||||
Marmaxx5,6 | +1% | +3% | $18,688 | $17,930 | |||||||||||||
HomeGoods | +7% | +7% | $3,414 | $2,994 | |||||||||||||
International: | |||||||||||||||||
TJX Canada | +3% | 0% | $2,884 | $2,878 | |||||||||||||
TJX Europe | +3% | +6% | $4,092 | $3,622 | |||||||||||||
TJX | +2% | +3% | $29,078 | $27,423 |
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 e-commerce sales. 3Sales in
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 two percentage point negative impact on consolidated net sales growth in the fourth quarter of Fiscal 2015 versus the prior year's fourth quarter. The overall net impact of foreign currency exchange rates had a neutral impact on fourth quarter Fiscal 2015 earnings per share, compared with a
The movement in foreign currency exchange rates had a one percentage point negative impact on consolidated net sales growth for the full Fiscal 2015 year 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 fourth quarter of Fiscal 2015, the Company's consolidated pretax profit margin was 12.4%, a 0.4 percentage point increase over the prior year's 12.0% margin.
The gross profit margin for the fourth quarter of Fiscal 2015 was 28.2%, up 0.6 percentage points over the prior year. The increase was primarily due to merchandise margin improvement as well as buying and occupancy leverage on the strong comp store sales increase. Selling, general and administrative costs as a percent of sales were 15.7%, up 0.1 percentage points versus the prior year's ratio.
For the full year Fiscal 2015, the Company's consolidated pretax profit margin was 12.2%. Excluding the approximately 0.1 percentage point debt extinguishment charge (referred to above), adjusted consolidated pretax profit margin was 12.3%, a 0.2 percentage point increase over the prior year's 12.1% margin.
The gross profit margin for Fiscal 2015 was 28.5%, flat versus the prior year. Selling, general and administrative costs as a percent of sales were 16.1%, a 0.2 percentage point improvement over the prior year's ratio.
Inventory
Total inventories as of
Full Year and First Quarter Fiscal 2016 Outlook
For the fiscal year ending
For the first quarter of Fiscal 2016, 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 2016 assumes that currency exchange rates will remain unchanged from the levels at the beginning of the first quarter.
Stores by Concept
During the fiscal year ended
Store Locations | Gross Square Feet* | ||||||||||||
FY2015 | FY2015 | ||||||||||||
(in millions) | |||||||||||||
Beginning | End | Beginning | End | ||||||||||
In the U.S.: | |||||||||||||
T.J. Maxx | 1,079 | 1,119 | 31.2 | 32.1 | |||||||||
Marshalls | 942 | 975 | 28.9 | 29.7 | |||||||||
HomeGoods | 450 | 487 | 11.3 | 12.1 | |||||||||
Sierra Trading Post | 4 | 6 | 0.1 | 0.2 | |||||||||
TJX Canada: | |||||||||||||
Winners | 227 | 234 | 6.6 | 6.7 | |||||||||
HomeSense | 91 | 96 | 2.2 | 2.3 | |||||||||
Marshalls | 27 | 38 | 0.8 | 1.2 | |||||||||
TJX Europe: | |||||||||||||
T.K. Maxx | 371 | 407 | 11.6 | 12.6 | |||||||||
HomeSense | 28 | 33 | 0.6 | 0.7 | |||||||||
TJX | 3,219 | 3,395 | 93.3 | 97.5 |
*Square feet figures may not foot due to rounding.
About
Fourth Quarter and Fiscal Year 2015 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 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 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 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 | 52 Weeks Ended | ||||||||||||||||||||
January 31, | February 1, | January 31, | February 1, | ||||||||||||||||||
Net sales | $ | 8,303,953 | $ | 7,808,787 | $ | 29,078,407 | $ | 27,422,696 | |||||||||||||
Cost of sales, including buying and occupancy costs | 5,959,037 | 5,650,300 | 20,776,522 | 19,605,037 | |||||||||||||||||
Selling, general and administrative expenses | 1,306,279 | 1,215,192 | 4,695,384 | 4,467,089 | |||||||||||||||||
Loss on early extinguishment of debt | - | - | 16,830 | - | |||||||||||||||||
Interest expense, net | 9,002 | 7,509 | 39,787 | 31,081 | |||||||||||||||||
Income before provision for income taxes | 1,029,635 | 935,786 | 3,549,884 | 3,319,489 | |||||||||||||||||
Provision for income taxes | 381,405 | 353,494 | 1,334,756 | 1,182,093 | |||||||||||||||||
Net income | $ | 648,230 | $ | 582,292 | $ | 2,215,128 | $ | 2,137,396 | |||||||||||||
Diluted earnings per share | $ | 0.93 | $ | 0.81 | $ | 3.15 | $ | 2.94 | |||||||||||||
Cash dividends declared per share | $ | 0.175 | $ | 0.145 | $ | 0.70 | $ | 0.58 | |||||||||||||
Weighted average common shares – diluted | 695,928 | 719,492 | 703,545 | 726,376 | |||||||||||||||||
The TJX Companies, Inc. and Consolidated Subsidiaries | |||||||||||
Condensed Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In Millions) | |||||||||||
January 31, | February 1, | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 2,493.8 | $ | 2,149.7 | |||||||
Short-term investments | 282.6 | 294.7 | |||||||||
Accounts receivable and other current assets | 583.1 | 555.5 | |||||||||
Current deferred income taxes, net | 137.6 | 101.6 | |||||||||
Merchandise inventories | 3,217.9 | 2,966.5 | |||||||||
Total current assets | 6,715.0 | 6,068.0 | |||||||||
Property, net of depreciation | 3,807.6 | 3,594.5 | |||||||||
Other assets | 235.1 | 225.8 | |||||||||
Goodwill and tradename, net of amortization | 309.9 | 312.7 | |||||||||
TOTAL ASSETS | $ | 11,067.6 | $ | 10,201.0 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 2,007.5 | $ | 1,771.3 | |||||||
Accrued expenses and other current liabilities | 1,922.1 | 1,746.5 | |||||||||
Total current liabilities | 3,929.6 | 3,517.8 | |||||||||
Other long-term liabilities | 827.4 | 733.0 | |||||||||
Non-current deferred income taxes, net | 422.5 | 446.1 | |||||||||
Long-term debt | 1,623.9 | 1,274.2 | |||||||||
Shareholders' equity | 4,264.2 | 4,229.9 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 11,067.6 | $ | 10,201.0 | |||||||
The TJX Companies, Inc. and Consolidated Subsidiaries | |||||||||||||
Condensed Statements of Cash Flows | |||||||||||||
(Unaudited) | |||||||||||||
(In Millions) | |||||||||||||
52 Weeks Ended | |||||||||||||
January 31, | February 1, | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||
Net income | $ | 2,215.1 | $ | 2,137.4 | |||||||||
Depreciation and amortization | 589.0 | 548.8 | |||||||||||
Loss on early extinguishment of debt | 16.8 | - | |||||||||||
Deferred income tax provision | 91.0 | 52.2 | |||||||||||
Share-based compensation | 88.0 | 76.1 | |||||||||||
(Increase) decrease in accounts receivable and other assets | (17.8 | ) | 8.6 | ||||||||||
(Increase) decrease in merchandise inventories | (332.3 | ) | 35.2 | ||||||||||
Increase (decrease) in accounts payable | 285.2 | (152.3 | ) | ||||||||||
Increase (decrease) in accrued expenses and other liabilities | 176.9 | (18.6 | ) | ||||||||||
Other | (103.5 | ) | (86.9 | ) | |||||||||
Net cash provided by operating activities | 3,008.4 | 2,600.5 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||
Property additions | (911.5 | ) | (946.7 | ) | |||||||||
Purchases of investments | (431.2 | ) | (496.7 | ) | |||||||||
Sales and maturities of investments | 388.0 | 394.9 | |||||||||||
Other | - | 2.7 | |||||||||||
Net cash (used in) investing activities | (954.7 | ) | (1,045.8 | ) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||
Proceeds from issuance of long-term debt | 749.5 | 499.6 | |||||||||||
Payments on early extinguishment of debt | (416.4 | ) | - | ||||||||||
Payments for repurchase of common stock | (1,650.7 | ) | (1,471.1 | ) | |||||||||
Proceeds from issuance of common stock | 143.0 | 146.5 | |||||||||||
Cash dividends paid | (465.9 | ) | (393.8 | ) | |||||||||
Other | 81.0 | 75.0 | |||||||||||
Net cash (used in) financing activities | (1,559.5 | ) | (1,143.8 | ) | |||||||||
Effect of exchange rate changes on cash | (150.1 | ) | (73.2 | ) | |||||||||
Net increase in cash and cash equivalents | 344.1 | 337.7 | |||||||||||
Cash and cash equivalents at beginning of year | 2,149.7 | 1,812.0 | |||||||||||
Cash and cash equivalents at end of year | $ | 2,493.8 | $ | 2,149.7 | |||||||||
The TJX Companies, Inc. and Consolidated Subsidiaries | |||||||||||||||||||
Selected Information by Major Business Segment | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(In Thousands) | |||||||||||||||||||
13 Weeks Ended | 52 Weeks Ended | ||||||||||||||||||
January 31, | February 1, | January 31, | February 1, | ||||||||||||||||
Net sales: | |||||||||||||||||||
In the United States: | |||||||||||||||||||
Marmaxx | $ | 5,285,529 | $ | 5,014,307 | $ 18,687,880 | $ | 17,929,576 | ||||||||||||
HomeGoods | 1,033,083 | 874,528 | 3,414,351 | 2,993,718 | |||||||||||||||
TJX Canada | 787,794 | 767,091 | 2,883,863 | 2,877,834 | |||||||||||||||
TJX Europe | 1,197,547 | 1,152,861 | 4,092,313 | 3,621,568 | |||||||||||||||
Total net sales | $ | 8,303,953 | $ | 7,808,787 | $ 29,078,407 | $ | 27,422,696 | ||||||||||||
Segment profit: | |||||||||||||||||||
In the United States: | |||||||||||||||||||
Marmaxx | $ | 748,077 | $ | 672,046 | $ 2,736,694 | $ | 2,612,693 | ||||||||||||
HomeGoods | 152,431 | 119,371 | 463,193 | 386,541 | |||||||||||||||
TJX Canada | 118,095 | 111,589 | 393,622 | 405,363 | |||||||||||||||
TJX Europe | 128,218 | 117,517 | 337,406 | 275,453 | |||||||||||||||
Total segment profit | 1,146,821 | 1,020,523 | 3,930,915 | 3,680,050 | |||||||||||||||
General corporate expenses | 108,184 | 77,228 | 324,414 | 329,480 | |||||||||||||||
Loss on early extinguishment of debt | - | - | 16,830 | - | |||||||||||||||
Interest expense, net | 9,002 | 7,509 | 39,787 | 31,081 | |||||||||||||||
Income before provision for income taxes | $ | 1,029,635 | $ | 935,786 | $ 3,549,884 | $ | 3,319,489 | ||||||||||||
Notes to Consolidated Condensed Statements
1. During the fourth quarter ended
2. On
Source:
The TJX Companies, Inc.
Debra McConnell
Global Communications
(508) 390-2323