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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 21, 2007
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THE TJX COMPANIES, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 1-4908 04-2207613
-------- ------ ----------
(State or other jurisdiction (Common File (I.R.S. employer
of incorporation) Number) identification No.)
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770 Cochituate Road, Framingham, MA 01701
-----------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(508) 390-1000
Registrant's Telephone Number
(including area code)
N/A
---
(Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The information contained in this report is being furnished and shall not
be deemed to be "filed" for purposes of Section 18 of, or otherwise regarded as
filed under, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), nor shall it be deemed incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing:
On February 21, 2007, The TJX Companies, Inc. issued a press release which
included financial results for the fiscal year ended January 27, 2007. The
release is furnished as Exhibit 99.1 hereto.
ITEM 8.01. OTHER EVENTS
On February 21, 2007, The TJX Companies, Inc. issued a press release
providing an update on the previously announced unauthorized intrusion into its
computer system that processes and stores information related to customer
transactions.
A copy of the press release providing an update on the computer system
intrusion is attached as Exhibit 99.2 hereto.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
Exhibit
Number Title
99.1 Press Release, dated February 21, 2007 of The TJX Companies, Inc.
99.2 Press Release, dated February 21, 2007 of The TJX Companies, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
THE TJX COMPANIES, INC.
/s/ Jeffrey G. Naylor
---------------------------------------------
Jeffrey G. Naylor
Senior Executive Vice President and
Chief Financial and Administrative Officer
Dated: February 21, 2007
EXHIBIT INDEX
Exhibit
Number Description
99.1 Press Release, dated February 21, 2007 of The TJX Companies, Inc.
99.2 Press Release, dated February 21, 2007 of The TJX Companies, Inc.
Exhibit 99.1
The TJX Companies, Inc. Reports Strong Fiscal Year 2007 Results;
Fourth Quarter Results Above Expectations
FRAMINGHAM, Mass.--(BUSINESS WIRE)--Feb. 21, 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 fiscal year and fourth quarter ended January
27, 2007. Net sales from continuing operations for the 52-week fiscal
year were $17.4 billion, a 9% increase over last year, and
consolidated comparable store sales increased 4%. Income from
continuing operations for the 52-week fiscal year was $777 million,
and diluted earnings per share from continuing operations were $1.63
compared to $1.41 for the prior year. Fiscal 2007 earnings include a
charge of $.01 per share with respect to the recently announced
unauthorized computer intrusion (see below), while the prior year's
earnings were impacted by the net benefit of one-time items, detailed
below, of $.12 per share. Excluding these items, adjusted diluted
earnings per share from continuing operations for fiscal 2007 were
unchanged at $1.63 versus $1.29 for the prior year, a 26% increase. A
table reconciling reported results to adjusted results is provided
below.
For the 13-week fiscal 2007 fourth quarter, net sales from
continuing operations increased 9% to $5.1 billion, and consolidated
comparable store sales increased 5% over last year. Income from
continuing operations for the fourth quarter was $243 million, and
diluted earnings per share from continuing operations were $.51
compared to $.59 in the prior year. The fiscal 2007 fourth quarter
included the $.01 per share intrusion charge, and the fiscal 2006
fourth quarter included the benefit of one-time items totaling $.14
per share detailed below. Excluding these items, adjusted diluted
earnings per share from continuing operations were $.52 in the fiscal
2007 fourth quarter, a 16% increase over the prior year's $.45 per
share.
Carol Meyrowitz, President and Chief Executive Officer of The TJX
Companies, Inc., stated, "We are pleased with our accomplishments over
the past year, including the significant increases in sales and
profitability we delivered. We reinvigorated the business, making our
stores more exciting through increased off-price buying and more
brands. We launched numerous merchandising and category initiatives to
drive growth. We will continue to build upon these initiatives, as
well as pursue new ones, in the upcoming year. Additionally, we took
strategic steps to lower costs, reinvesting some of these savings in
increased marketing and more effective advertising campaigns. As we
enter 2007, I am excited by the momentum we have and all the
opportunities across our businesses. With our go-forward management
team, which combines the best of TJX experience and new talent, I am
confident that we will drive profitable sales and achieve continued
growth, through every-day execution of our off-price mission,
merchandise initiatives, marketing strategies and expansion into new
markets worldwide."
Sales by Business Segment
The Company's comparable store sales and net sales by division for
the full year were as follows:
Full Year Full Year
Comparable Store Net Sales ($ in
Sales millions)
-------------------- -----------------
FY2007 FY2006 FY2007 FY2006
- ------------------------------- ---------- --------- -------- --------
Marmaxx(a) +2% +2% $11,532 $10,957
- ------------------------------- ---- ----- --- ----- -------- --------
Winners/HomeSense +11% (US$) +4% (US$) $1,741 $1,458
+5% (C$) -3% (C$)
- ------------------------------- ---- ----- --- ----- -------- --------
T.K. Maxx +13% (US$) -1% (US$) $1,865 $1,517
+9% (GBP) +1% (GBP)
- ------------------------------- ---- ----- --- ----- -------- --------
HomeGoods +4% +1% $1,365 $1,187
- ------------------------------- ---- ----- --- ----- -------- --------
A.J. Wright +3% +3% $602 $549
- ------------------------------- ---- ----- --- ----- -------- --------
Bob's Stores +2% NA $301 $288
- ------------------------------- ---- ----- --- ----- -------- --------
- ------------------------------- ---- ----- --- ----- -------- --------
TJX +4% +2% $17,405 $15,956
- ------------------------------- ---- ----- --- ----- -------- --------
(a) Combination of T.J. Maxx and Marshalls
The Company's comparable store sales and net sales by division, in
the fourth quarter, were as follows:
Fourth Quarter Fourth Quarter
Comparable Store Net Sales ($ in
Sales millions)
-------------------- ---------------
FY2007 FY2006 FY2007 FY2006
- -------------------------------- ---------- --------- ------- -------
Marmaxx(a) +2% +4% $3,279 $3,128
- -------------------------------- ---- ----- --- ----- ------- -------
Winners/HomeSense +10% (US$) +5% (US$) $494 $430
+8% (C$) +2% (C$)
- -------------------------------- ---- ----- --- ----- ------- -------
T.K. Maxx +23% (US$) -2% (US$) $629 $487
+10% (GBP) +7% (GBP)
- -------------------------------- ---- ----- --- ----- ------- -------
HomeGoods +5% +4% $422 $377
- -------------------------------- ---- ----- --- ----- ------- -------
A.J. Wright +2% +6% $183 $171
- -------------------------------- ---- ----- --- ----- ------- -------
Bob's Stores 0% NA $90 $89
- -------------------------------- ---- ----- --- ----- ------- -------
- -------------------------------- ---- ----- --- ----- ------- -------
TJX +5% +3% $5,097 $4,681
- -------------------------------- ---- ----- --- ----- ------- -------
(a) Combination of T.J. Maxx and Marshalls
Impact of Charges and One-Time Items
On January 17, 2007, TJX announced that it had suffered an
unauthorized intrusion into its computer systems that process and
store information related to customer transactions. In the fourth
quarter of fiscal 2007, the Company recorded a charge of approximately
$5 million, or $.01 per share, for costs incurred through the fourth
quarter, which includes costs incurred to investigate and contain the
intrusion, enhance computer security and systems, and communicate with
customers, as well as technical, legal, and other fees. Beyond this
charge, TJX does not yet have enough information to reasonably
estimate losses it may incur arising from this intrusion, including
exposure to credit and debit card companies and banks, exposure in
various legal proceedings that are pending or may arise, and related
fees and expenses, and other potential liabilities, costs and
expenses. The Company will record any known losses when they become
both probable and reasonably estimable.
Additionally, the Company's fiscal 2006 results from continuing
operations include the negative impact of one-time items in the third
quarter which reduced earnings per share from continuing operations by
a net of $.02, a one-time tax benefit of $.10 per share related to the
Company's repatriation of accumulated earnings from its foreign
operations in the fourth quarter, and the favorable impact of $.04 per
share for a correction of a previously established deferred tax
liability in the fourth quarter.
The following table reconciles reported EPS from continuing
operations to adjusted EPS from continuing operations (excluding
charges and one-time items):
Fourth Quarter Full Year
FY2007 FY2006 FY2007 FY2006
------ ------- ------ -------
EPS from continuing operations, as
reported $0.51 $0.59 $1.63 $1.41
Adjustments:
Costs relating to systems intrusion $0.01 - - -
Correction to deferred tax liability - ($0.04) - ($0.04)
Repatriation tax benefit - ($0.10) - ($0.10)
Third quarter one-time events(b) - - - $0.02
------ ------- ------ -------
Adjusted EPS from continuing operations $0.52 $0.45 $1.63 $1.29
====== ======= ====== =======
(b) The third quarter events include executive resignation
agreements of $0.01 per share, e-commerce exit costs and operating
losses of $0.01 per share, and hurricane related costs including the
estimated impact of lost sales of $0.01 per share, partially offset by
a gain from a VISA/MasterCard antitrust litigation settlement of
($0.01) per share.
Margins
For the full year fiscal 2007, consolidated pretax profit margin
from continuing operations improved to 7.2% from 6.3% in the prior
year. Gross margin from continuing operations improved 0.7 percentage
points to 24.1%, due to improved merchandise margins combined with
buying and occupancy expense leverage. Selling, general and
administrative costs as a percent of sales for fiscal 2007 was 16.8%,
down slightly from 16.9% the prior year, with expense leverage
partially offset by a planned increase in marketing expense.
During the fourth quarter of fiscal 2007, the Company's
consolidated pretax profit margin from continuing operations was 7.5%,
which was flat to the prior year and included a 0.1 percentage point
reduction due to the intrusion charge. The gross margin from
continuing operations for the fiscal 2007 fourth quarter was 23.0%,
0.1 percentage point less than the prior year's fourth quarter.
Selling, general and administrative costs as a percent of sales was
15.6%, up 0.1 percentage point versus the prior year, with expense
leverage from the 5% comparable store sales increase more than offset
by a planned increase in marketing expense (0.2 percentage points) and
the charge related to the systems intrusion.
Inventory
Total inventories as of January 27, 2007, were $2.6 billion
compared with $2.4 billion at the same time in the prior year.
Consolidated inventories on a per-store basis, including the
warehouses, at January 27, 2007, were up 7% versus being down 11% at
the same time last year. At the Marmaxx division, the total inventory
commitment, including the warehouses, stores and merchandise on order,
was up versus last year on a per-store basis. The Company remains
comfortable with its inventory levels and the liquidity within its
inventories, which gives it the ability to take advantage of buying
opportunities in the marketplace.
Share Repurchases
During the fourth quarter, the Company spent a total of $107
million in repurchases of TJX stock, retiring 3.7 million shares. In
Fiscal 2007, the Company spent a total of $557 million in stock
repurchases, retiring a total of 22.0 million shares of TJX stock. As
previously announced, the Company's Board of Directors earlier this
year approved a new stock repurchase program that authorizes the
repurchase of up to $1 billion of TJX common stock from time to time.
At current prices, this would represent approximately 7.5% of the
Company's outstanding common shares.
Discontinued Operations
The Company reports results from continuing operations, which
exclude the results of operations from 34 discontinued A.J. Wright
stores. The Company previously announced it was closing these stores
in order to reposition this business. In connection with this action,
the Company incurred an after-tax charge of $38 million, or $.08 per
share, in the fiscal 2007 fourth quarter, which was in line with
original estimates. This charge represents costs incurred and expected
to be incurred related to asset impairment, remaining lease liability
(net of expected subtenant income), and severance and other costs. The
Company has classified these exit costs, along with operating income
or loss related to these stores, as discontinued operations in its
financial statements for all periods presented. The net loss from
discontinued operations, including these exit costs, was $38 million
for the fourth quarter and $39 million for the year ended January 27,
2007. Including discontinued operations, net income for the fourth
quarter of fiscal 2007 was $205 million, or $.43 per diluted share,
and $738 million for the full year, or $1.55 per diluted share.
Fiscal 2008 Outlook
For the fiscal year ending January 26, 2008, the Company expects
earnings per share from continuing operations in the range of $1.80 to
$1.85, which represents a 10% to 13% increase over the adjusted $1.63
per share from continuing operations in fiscal 2007 (detailed above).
This range is based upon estimated consolidated comparable store sales
growth of approximately 3%.
For the first quarter of fiscal 2008, the Company expects earnings
per share from continuing operations in the range of $.36 to $.38,
which represents a 6% to 12% increase over $.34 per share in the prior
year. This range reflects an increase in pre-tax income of 8% to 14%,
partially offset by a higher tax rate in the first quarter of this
year compared to last year. This outlook is also based upon estimated
consolidated comparable store sales growth of approximately 3%.
The Company's outlook for the full year and first quarter fiscal
2008 do not include any estimates for potential liabilities, costs and
expenses arising from the recently announced unauthorized computer
system intrusion (see above), including exposure to credit and debit
card companies and banks, exposure in various legal proceedings that
are pending, or may arise, and related fees and expenses, and other
potential liabilities, costs and expenses, as these amounts are not
yet reasonably estimable.
Stores by Concept
During the fiscal year ended January 27, 2007, the Company added a
total of 85 stores, net of closings, to end the year with 2,466
stores, and increased square footage by 4% over the same period last
year.
Store Locations Gross Square Feet
FY2007 FY2007
(in millions)
---------------- -----------------
Beginning End Beginning End
- ----------------------------------- --------- ------ ----------- -----
T.J. Maxx 799 821 23.8 24.7
- ----------------------------------- --------- ------ ----------- -----
Marshalls 715 748 22.7 24.0
- ----------------------------------- --------- ------ ----------- -----
Winners 174 184 5.1 5.4
- ----------------------------------- --------- ------ ----------- -----
HomeSense 58 68 1.4 1.6
- ----------------------------------- --------- ------ ----------- -----
HomeGoods 251 270 6.2 6.6
- ----------------------------------- --------- ------ ----------- -----
T.K. Maxx 197 210 5.9 6.5
- ----------------------------------- --------- ------ ----------- -----
A.J. Wright 152 129 3.9 3.3
- ----------------------------------- --------- ------ ----------- -----
Bob's Stores 35 36 1.6 1.6
- ----------------------------------- --------- ------ ----------- -----
- ----------------------------------- --------- ------ ----------- -----
TJX 2,381 2,466 70.6 73.7
- ----------------------------------- --------- ------ ----------- -----
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 821 T.J. Maxx, 748 Marshalls, 270 HomeGoods, and 129 A.J.
Wright stores, as well as 36 Bob's Stores, in the United States. In
Canada, the Company operates 184 Winners and 68 HomeSense stores, and
in Europe, 210 T.K. Maxx stores. TJX's press releases and financial
information are also available on the Internet at www.tjx.com.
Fourth Quarter and Fiscal Year 2007 Conference Call
At 11:00 a.m. ET, today, Carol Meyrowitz, President and Chief
Executive Officer, TJX, will hold a conference call with stock
analysts to discuss the Company's fiscal 2007 results, operations and
business trends, as well as expectations for fiscal 2008. 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 Wednesday, February 28, 2007.
February 2007 Sales Recorded Call
Additionally, the Company expects to release its February 2007
sales results on Thursday, March 8, 2007, at approximately 8:15 a.m.
ET. Concurrent with that press release, a recorded message with more
detailed information regarding TJX's February sales results,
operations and business trends will be available via the Internet at
www.tjx.com, or by calling (703) 736-7248 through Thursday, March 15,
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, including
projections of earnings per share and same store sales, 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
into our computer system including the outcome of our investigation,
the extent of customer information compromised and consequences to our
business including effects on sales and liabilities and costs in
connection with this intrusion; 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
---------------------------
January 27, January 28,
2007 2006
------------- -------------
Net sales $ 5,096,779 $ 4,681,305
Cost of sales, including buying and
occupancy costs 3,922,446 3,599,603
Selling, general and administrative
expenses 794,742 725,949
Interest (income) expense, net (390) 5,560
------------- -------------
Income from continuing operations before
provision for income taxes 379,981 350,193
Provision for income taxes 136,730 62,777
------------- -------------
Income from continuing operations 243,251 287,416
Discontinued operations:
Loss on disposal of discontinued
operations, net of income taxes (38,110) -
Income of discontinued operations, net
of income taxes 321 1,287
------------- -------------
Net income $ 205,462 $ 288,703
============= =============
Diluted earnings per share:
Income from continuing operations $ 0.51 $ 0.59
Net income $ 0.43 $ 0.60
Cash dividends declared per share $ 0.07 $ 0.06
Weighted average shares for diluted
earnings per share computation 478,713,640 485,452,273
The TJX Companies, Inc. and Consolidated Subsidiaries
Financial Summary
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
Fifty-Two Weeks Ended
---------------------------
January 27, January 28,
2007 2006
------------- -------------
Net sales $ 17,404,637 $ 15,955,943
Cost of sales, including buying and
occupancy costs 13,213,703 12,214,671
Selling, general and administrative
expenses 2,928,520 2,703,271
Interest expense, net 15,566 29,632
------------- -------------
Income from continuing operations before
provision for income taxes 1,246,848 1,008,369
Provision for income taxes 470,092 318,535
------------- -------------
Income from continuing operations 776,756 689,834
Discontinued operations:
Loss on disposal of discontinued
operations, net of income taxes (38,110) -
Income (loss) of discontinued
operations, net of income taxes (607) 589
------------- -------------
Net income $ 738,039 $ 690,423
============= =============
Diluted earnings per share:
Income from continuing operations $ 1.63 $ 1.41
Net income $ 1.55 $ 1.41
Cash dividends declared per share $ 0.28 $ 0.24
Weighted average shares for diluted
earnings per share computation 480,044,979 491,499,531
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)
January 27, January 28,
2007 2006
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 856.7 $ 465.6
Accounts receivable and other current
assets 274.3 299.3
Current deferred income taxes, net 35.8 9.3
Merchandise inventories 2,582.0 2,365.9
----------- -----------
Total current assets 3,748.8 3,140.1
----------- -----------
Property and capital leases, net of
depreciation 2,038.4 2,013.1
Non-current deferred income taxes, net - 6.4
Other assets 115.6 153.3
Goodwill and tradename, net of amortization 182.9 183.4
----------- -----------
TOTAL ASSETS $6,085.7 $5,496.3
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,372.4 $1,313.5
Accrued expenses and other current
liabilities 1,010.6 938.4
----------- -----------
Total current liabilities 2,383.0 2,251.9
----------- -----------
Other long-term liabilities 605.5 568.9
Non-current deferred income taxes, net 21.5 -
Long-term debt 785.6 782.9
Shareholders' equity 2,290.1 1,892.6
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $6,085.7 $5,496.3
=========== ===========
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Statements of Cash Flows
(Unaudited)
(In Millions)
Fifty-Two Weeks Ended
-----------------------
January 27, January 28,
2007 2006
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 738.0 $ 690.4
Depreciation and amortization 353.1 314.3
Deferred income tax provision 6.3 (88.2)
Amortization of stock compensation 69.8 91.2
Decrease (increase) in accounts receivable
and other current assets 3.2 (56.2)
(Increase) in merchandise inventories (201.4) (8.8)
Increase in accounts payable 50.2 35.0
Increase in accrued expenses and other
liabilities 128.0 171.3
Other 47.8 9.0
----------- -----------
Net cash provided by operating activities 1,195.0 1,158.0
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (378.0) (495.9)
Proceeds from sale of property - 9.7
Other 0.7 0.6
----------- -----------
Net cash (used in) investing activities (377.3) (485.6)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of long-term debt - 204.4
Principal payments on long-term debt - (100.0)
Payments for repurchase of common stock (557.2) (603.7)
Proceeds from sale and issuance of common
stock 260.2 102.4
Cash dividends paid (122.9) (105.2)
Other 1.9 (1.6)
----------- -----------
Net cash (used in) financing activities (418.0) (503.7)
----------- -----------
Effect of exchange rate changes on cash (8.6) (10.3)
----------- -----------
Net increase in cash and cash equivalents 391.1 158.4
Cash and cash equivalents at beginning of year 465.6 307.2
----------- -----------
Cash and cash equivalents at end of year $ 856.7 $ 465.6
=========== ===========
The TJX Companies, Inc. and Consolidated Subsidiaries
Selected Information by Major Business Segment
(Unaudited)
(In Thousands)
Thirteen Weeks Ended
-----------------------
January 27, January 28,
Net sales: 2007 2006
----------- -----------
Marmaxx $3,279,474 $3,128,132
Winners and HomeSense 494,116 429,716
T.K. Maxx 628,611 486,801
HomeGoods 421,952 376,796
A.J. Wright 182,582 170,735
Bob's Stores 90,044 89,125
----------- -----------
$5,096,779 $4,681,305
=========== ===========
Segment profit or (loss):
Marmaxx $ 287,692 $ 283,067
Winners and HomeSense 51,600 41,828
T.K. Maxx 54,697 41,495
HomeGoods 30,605 26,902
A.J. Wright (1,180) 6,148
Bob's Stores (5,916) (4,641)
----------- -----------
417,498 394,799
General corporate expense 37,907 39,046
Interest (income) expense, net (390) 5,560
----------- -----------
Income from continuing operations
before provision for income taxes $ 379,981 $ 350,193
=========== ===========
The TJX Companies, Inc. and Consolidated Subsidiaries
Selected Information by Major Business Segment
(Unaudited)
(In Thousands)
Fifty-Two Weeks Ended
-------------------------
January 27, January 28,
Net sales: 2007 2006
------------ ------------
Marmaxx $11,531,785 $10,956,788
Winners and HomeSense 1,740,796 1,457,736
T.K. Maxx 1,864,502 1,517,116
HomeGoods 1,365,103 1,186,854
A.J. Wright 601,827 548,969
Bob's Stores 300,624 288,480
------------ ------------
$17,404,637 $15,955,943
============ ============
Segment profit or (loss):
Marmaxx $ 1,079,275 $ 985,361
Winners and HomeSense 181,863 120,319
T.K. Maxx 109,305 69,206
HomeGoods 60,938 28,418
A.J. Wright (10,250) (3,160)
Bob's Stores (17,360) (28,031)
------------ ------------
1,403,771 1,172,113
General corporate expense 141,357 134,112
Interest expense, net 15,566 29,632
------------ ------------
Income from continuing operations
before provision for income taxes $ 1,246,848 $ 1,008,369
============ ============
The TJX Companies, Inc. and Consolidated Subsidiaries
Notes to Consolidated Condensed Statements
1. During the fifty-two weeks ended January 27, 2007, TJX
repurchased 22.0 million shares of its common stock at a cost of $557
million. During the fourth quarter ended January 27, 2007, TJX
repurchased 3.7 million shares of its common stock, at a cost of $107
million. Through January 27, 2007, under its current $1 billion
multi-year stock repurchase program, TJX has spent $564 million on the
repurchase of 22.3 million shares of TJX common stock. In February,
2007, TJX's Board of Directors authorized an additional multi-year
stock repurchase plan of $1 billion.
2. As previously disclosed on November 30, 2006, the Company has
closed 34 of its A.J. Wright stores. In connection with this action,
the Company incurred a pre-tax charge of $62 million which represents
costs the Company incurred relating to asset impairments, the
estimated cost of remaining lease liabilities (net of expected
subtenant income), and severance and other costs. The charge was
recorded, net of income taxes, as a loss from discontinued operations
and reduced net income by $38 million, or $0.08 per diluted share. In
addition the operating results of the closed stores for the fourth
quarter of fiscal 2007 as well as all prior periods have been
presented net of income taxes as "Income (loss) of discontinued
operations." The operating results of the closed stores include an
allocation for distribution and administrative overhead to the extent
those costs were eliminated as a result of the closings, but do not
include an allocation of interest expense.
3. On January 17, 2007, TJX announced that it has suffered an
unauthorized intrusion into its computer systems that process and
store information related to customer transactions. This intrusion
involves the portion of TJX's computer network that handles credit
card, debit card, check, and merchandise return transactions for
customers of its T.J. Maxx, Marshalls, HomeGoods and A.J. Wright
stores in the U.S. and Puerto Rico, and its Winners and HomeSense
stores in Canada, and may involve transactions for customers of its
T.K. Maxx stores in the U.K. and Ireland. TJX does not believe that
the intrusion extended to TJX's Bob's Stores in the U.S or to
transactions using debit cards issued by Canadian banks. While TJX has
specifically identified some customer information that was stolen from
its systems, it is engaged in a full investigation of the intrusion.
During the fourth quarter of fiscal 2007, TJX strengthened the
security of its computer systems.
During the fourth quarter of fiscal 2007, the Company incurred
direct costs of approximately $5 million to investigate and contain
the intrusion, enhance computer security and systems, communicate with
customers as well as legal and other professional fees. These costs
are included in selling, general and administrative expenses and
reduced income from continuing operations for the fourth quarter ended
January 27, 2007 by approximately $0.01 per share. In addition to
these costs, the Company has ongoing costs and expenses with respect
to the intrusion as well as exposure to potential losses related to
the intrusion, but at this time, TJX can not reasonably estimate such
costs and expenses or the potential exposure for such losses.
Therefore, in accordance with Statement of Accounting Standards No. 5,
Accounting for Contingencies ('FAS 5'), TJX has not accrued any
charges for such costs, expenses and potential losses relating to the
intrusion.
4. The following is a reconciliation of our fourth quarter and
full year diluted earnings per share for continuing operations, as
reported on a GAAP basis, to the adjusted diluted earnings per share
referenced in our earnings release.
Fourth Quarter Full Year
FY2007 FY2006 FY2007 FY2006
------ ------- ------ -------
EPS from continuing operations, as
reported $0.51 $ 0.59 $1.63 $ 1.41
Adjustments:
Costs relating to systems intrusion 0.01 - - -
Correction to deferred tax liability - (0.04) - (0.04)
Repatriation tax benefit - (0.10) - (0.10)
One-time third quarter events(c) - - - 0.02
------ ------- ------ -------
Adjusted EPS from continuing operations $0.52 $ 0.45 $1.63 $ 1.29
====== ======= ====== =======
(c) The third quarter events include executive resignation
agreements of $0.01 per share, e-commerce exit costs and operating
losses of $0.01 per share, and hurricane related costs including the
estimated impact of lost sales of $0.01 per share, partially offset by
a gain from a VISA/MasterCard antitrust litigation settlement of
($0.01) per share.
CONTACT: The TJX Companies, Inc.
Sherry Lang
Senior Vice President
Investor and Public Relations
(508) 390-2323
Exhibit 99.2
The TJX Companies, Inc. Updates Information on Computer Systems Intrusion
FRAMINGHAM, Mass.--(BUSINESS WIRE)--Feb. 21, 2007--The TJX
Companies, Inc. (NYSE: TJX), the leading off-price retailer of apparel
and home fashions in the U.S. and worldwide, today reported its
updated findings from the Company's ongoing investigation of its
previously announced unauthorized intrusion into its computer systems.
Carol Meyrowitz, President and Chief Executive Officer of The TJX
Companies, commented, "Let me begin by telling our customers
personally how much I regret any problems or inconvenience they may
have experienced as a result of the unauthorized intrusion into our
computer system. Our investigation is ongoing, and we are providing an
update today on new developments. We are dedicating substantial
resources to investigating and evaluating the intrusion which, given
the nature of the breach, the size and international scope of our
operations, and the complexity of the way credit card transactions are
processed, is, by necessity, taking time. We have a very large team of
people working on the investigation. For example, the leading computer
security experts working with us have over 50 experts committed to
this project. Additionally, with their help, we have strengthened the
security of our computer systems. Based on everything we have done, I
believe customers should feel safe shopping in our stores. We value
our customers' trust and I want our customers to know that I am deeply
committed to continuing to address the security of our computer
systems, and that TJX will provide periodic updates as we learn more."
The following are new findings based on TJX's current information
from its ongoing investigation of the previously announced
unauthorized intrusion into its computer system:
Timing
While the Company previously believed that the intrusion took
place only from May 2006 to January 2007, TJX now believes its
computer system was also intruded upon in July 2005 and on various
subsequent dates in 2005. TJX continues to believe there was no
compromise of customer data after mid-December 2006.
Credit and Debit Card Data
In addition to the customer data the Company previously reported
as compromised, the Company now believes that information regarding
portions of the credit and debit card transactions at its U.S., Puerto
Rican and Canadian stores (excluding debit card transactions with
cards issued by Canadian banks) from January 2003 through June 2004
was compromised. The Company had previously reported that the 2003
transaction data had potentially been accessed. For most of the
transactions from September 2003 through June 2004, some of the card
information was masked at the time of the transaction, making that
portion unavailable to the intruder.
Names and addresses were not included with the credit and debit
card data believed compromised. Debit card personal identification
numbers (PINs), information from transactions at Bob's Stores, and
transactions made with debit cards issued by Canadian banks are not
believed to have been compromised.
Drivers' License Numbers
TJX has found additional drivers' license numbers together with
related names and addresses that it believes were compromised. This
information was associated with unreceipted merchandise returns at its
T.J. Maxx, Marshalls, and HomeGoods stores in the U.S. and Puerto Rico
for the last four months of 2003 and May and June 2004. TJX intends to
notify customers it is able to identify whose drivers' license
numbers, names and addresses were included in the information believed
to have been compromised.
T.K. Maxx
The Company had previously reported that it was concerned that
T.K. Maxx customer transactions in the UK and Ireland could be
involved. TJX's investigation has found evidence of an intrusion to
the portion of its computer system that processes T.K. Maxx customer
transactions. While TJX continues to suspect that customer information
may have been compromised from this portion of its network, the
Company has not been able to confirm any unauthorized access to
customer data or any theft of customer data from T.K. Maxx.
Important Information for Customers
-- TJX has continued to cooperate with law enforcement since the
probability of an intrusion was first confirmed as well as
with the credit card companies and banks that process its
transactions.
-- TJX has established a special helpline for its customers who
have questions about this situation. Customers may reach the
helpline toll-free at 866-484-6978 in the United States,
866-903-1408 in Canada, and 0800 77 90 15 in the United
Kingdom and Ireland.
-- TJX will also provide updated information for customers on its
website, www.tjx.com, including tips on preventing credit and
debit card fraud and other steps customers may take to protect
their personal information.
-- TJX strongly recommends that customers carefully review their
account statements and immediately notify their credit or
debit card company or bank if they suspect fraudulent use.
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 821 T.J. Maxx, 748 Marshalls, 270 HomeGoods, and 129 A.J.
Wright stores, as well as 36 Bob's Stores, in the United States. In
Canada, the Company operates 184 Winners and 68 HomeSense stores, and
in Europe, 210 T.K. Maxx stores. TJX's press releases and financial
information are also available on the Internet at www.tjx.com.
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, including
projections of earnings per share and same store sales, 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
into our computer system including the outcome of our investigation,
the extent of customer information compromised and consequences to our
business including effects on sales and liabilities and costs in
connection with this intrusion; 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.
CONTACT: The TJX Companies, Inc.
Sherry Lang
Senior Vice President
Investor and Public Relations
(508) 390-2323