View:
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): August 15, 2006
----------
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.)
----------
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))
1
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 August 15, 2006, The TJX Companies, Inc. issued a press release
which included financial results for the fiscal quarter ended July 29,
2006. The release is furnished as Exhibit 99.1 hereto.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
Exhibit Number Title
- -------------- -----
99.1 Press Release, dated August 15, 2006 of The TJX Companies,
Inc.
2
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 Officer
Dated: August 15, 2006
3
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
99.1 Press Release, dated August 15, 2006 of The TJX Companies,
Inc.
4
Exhibit 99.1
The TJX Companies, Inc. Reports Record Second Quarter Results
FRAMINGHAM, Mass.--(BUSINESS WIRE)--Aug. 15, 2006--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 second quarter ended July 29, 2006. Net sales
for the second quarter were $4.0 billion, a 9% increase over last
year, and consolidated comparable store sales increased 4% over last
year. Net income for the quarter was $138 million, and diluted
earnings per share were $.29, a 26% increase over $.23 per share in
the prior year.
For the first half of fiscal 2007, net sales were $7.9 billion, an
8% increase over last year, and year-to-date consolidated comparable
store sales increased 3% over the prior year. Net income was $302
million and diluted earnings per share were $.63, a 26% increase over
$.50 per share in the prior year.
Ben Cammarata, Chairman and Acting Chief Executive Officer of The
TJX Companies, Inc., stated, "Our second quarter 26% increase in
earnings per share and 4% comparable store sales increase both
exceeded our expectations, marking our strongest second quarter in the
Company's history and our third consecutive quarter of powerful
performance. Results at The Marmaxx Group were on plan and four of our
five smaller divisions posted significant year-over-year bottom-line
improvement that exceeded our expectations. While pleased with our
overall performance, we continue to address areas of our business in
which we can improve, including the performance of A.J. Wright. As we
move into the second half of the year, we remain focused on driving
profitable sales growth and executing the fundamental strategies of
our off-price concept."
Sales by Business Segment
The Company's comparable store sales and net sales by division, in
the second quarter, were as follows:
Second Quarter Second Quarter
Comparable Store Net Sales
Sales ($ in millions)
----------------------- -------------------
FY2007 FY2006 FY2007 FY2006
- -------------------------- ---------- ------------ --------- ---------
Marmaxx(a) +2% +2% $2,659 $2,537
- -------------------------- ---- ----- ------ ----- --------- ---------
Winners/HomeSense +17% (US$) -1% (US$) $401 $317
+6% (C$) -9% (C$)
- -------------------------- ---- ----- ------ ----- --------- ---------
T.K. Maxx +13% (US$) +1% (US$) $405 $328
+10% (GBP) +2% (GBP)
- -------------------------- ---- ----- ------ ----- --------- ---------
HomeGoods +4% 0% $301 $259
- -------------------------- ---- ----- ------ ----- --------- ---------
A.J. Wright +1% +1% $158 $147
- -------------------------- ---- ----- ------ ----- --------- ---------
Bob's Stores +6% NA $64 $60
- -------------------------- ---- ----- ------ ----- --------- ---------
- -------------------------- ---- ----- ------ ----- --------- ---------
TJX +4% +1% $3,988 $3,648
- -------------------------- ---- ----- ------ ----- --------- ---------
(a) Combination of T.J. Maxx and Marshalls
Margins
During the second quarter of Fiscal 2007, the Company's pretax
profit margin increased to 5.8% from 4.9% last year, primarily due to
significant improvement in the profitability of most of the Company's
smaller divisions. The gross profit margin increased 0.4 percentage
points to 23.4%, due to slight improvement in merchandise margins over
last year's strong performance, combined with buying and occupancy
cost leverage. The SG&A rate also improved 0.4 percentage points, due
to leverage from an above-plan comparable store sales increase and the
Company's continued focus on cost management.
Inventory
Total inventories as of July 29, 2006, were $2.9 billion compared
with $2.8 billion at the same time last year and, on a per-store
basis, including the warehouses, were down 4% from the prior year. At
the Marmaxx division, per-store inventories, including the warehouses,
were down 8% from last year's levels. Including merchandise on order,
Marmaxx's total inventory commitment was flat on a per-store basis.
Share Repurchases
During the second quarter, the Company spent a total of $204
million to repurchase TJX stock, retiring 8.7 million shares.
Year-to-date, the Company has spent a total of $381 million to
repurchase TJX stock and has retired a total of 15.9 million shares.
It remains the Company's plan to repurchase a total of $650 million of
TJX stock in Fiscal 2007.
Stock Option Expense Included
As previously announced, in the fourth quarter of Fiscal 2006, the
Company early-adopted the Statement of Financial Accounting Standards
(SFAS) No. 123R related to accounting for stock based compensation and
also adjusted prior period financial statements to reflect the impact
of stock option expense. Consequently, the attached consolidated
financial statements and business segment results include the impact
of stock option expense for both current and prior periods.
Third Quarter and Fiscal 2007 Outlook
For the third quarter of Fiscal 2007, the Company expects earnings
per share in the range of $.39 to $.41, an estimated increase of 22%
to 28% over $.32 per share on a reported basis in the prior year. Last
year's third quarter earnings per share results were reduced by a net
$.02 due to several one-time items, detailed in the Company's Fiscal
2006 Form 10-K. Adjusting for these $.02, our expected third quarter
earnings per share would represent a 15% to 21% increase over the
adjusted $.34 per share in the prior year. (See Note 4 to financial
statements.) This forecast is based on various assumptions, including
estimated consolidated comparable store sales growth in the range of
3% to 4%.
For the fiscal year ended January 27, 2007, with above-plan
earnings per share during the first half of the year, the Company now
expects earnings per share in the range of $1.49 to $1.53 as compared
to $1.41 on a reported basis in the prior year, a 6% to 9% estimated
increase. Prior year earnings per share include a net benefit of $.12
per share from one-time items (non-recurring tax benefits, partially
offset by the third quarter events mentioned above). Adjusting for
these items, the Company's estimated current year earnings per share
would be up 16% to 19% over the adjusted $1.29 earnings per share
earned in Fiscal 2006. (See Note 4 to financial statements.) This
forecast is based on various assumptions, including consolidated
comparable store sales growth of approximately 3%.
Stores by Concept
During the second quarter, the Company added a total of 15 stores.
TJX increased square footage by 7% over the same period last year.
Store Locations Gross Square Feet
Second Quarter Second Quarter
(in millions)
--------------------- --------------------
Beginning End Beginning End
- --------------------------- ----------- --------- ----------- --------
T.J. Maxx 805 807 24.0 24.1
- --------------------------- ----------- --------- ----------- --------
Marshalls 725 729 23.1 23.2
- --------------------------- ----------- --------- ----------- --------
Winners 178 178 5.3 5.3
- --------------------------- ----------- --------- ----------- --------
HomeSense 60 61 1.5 1.5
- --------------------------- ----------- --------- ----------- --------
HomeGoods 254 260 6.3 6.4
- --------------------------- ----------- --------- ----------- --------
T.K. Maxx 201 202 6.0 6.1
- --------------------------- ----------- --------- ----------- --------
A.J. Wright 156 156 4.0 4.0
- --------------------------- ----------- --------- ----------- --------
Bob's Stores 35 36 1.6 1.6
- --------------------------- ----------- --------- ----------- --------
- --------------------------- ----------- --------- ----------- --------
TJX 2,414 2,429 71.7 72.1
- --------------------------- ----------- --------- ----------- --------
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 807 T.J. Maxx, 729 Marshalls, 260 HomeGoods, and 156 A.J.
Wright stores, as well as 36 Bob's Stores, in the United States. In
Canada, the Company operates 178 Winners and 61 HomeSense stores, and
in Europe, 202 T.K. Maxx stores. TJX's press releases and financial
information are also available on the Internet at www.tjx.com.
Fiscal 2007 Second Quarter Earnings Conference Call
At 11:00 a.m. ET, today, Ben Cammarata, Chairman and Acting Chief
Executive Officer, and Carol Meyrowitz, President of TJX, will hold a
conference call with stock analysts to discuss the Company's second
quarter fiscal 2007 results, operations and business trends. 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) 346-2455 through Tuesday, August 22, 2006. 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.
August Fiscal 2007 Sales Recording
Additionally, the Company expects to release its August 2006 sales
results on Thursday, August 31, 2006, at approximately 8:15 a.m. ET.
Concurrent with that press release, a recorded message with more
detailed information regarding TJX's August sales results, operations
and business trends will be available via the Internet at www.tjx.com,
or by calling (703) 736-7248 through Thursday, September 7, 2006.
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: our ability to continue successful
expansion of our store base and increase same store sales; risks of
expansion; 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;
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; 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)
(In Thousands Except Per Share Amounts)
13 Weeks Ended
----------------------
July 29, July 30,
2006 2005
---------- ----------
Net sales $3,988,232 $3,647,866
---------- ----------
Cost of sales, including buying and occupancy
costs 3,054,467 2,807,861
Selling, general and administrative expenses 698,779 652,143
Interest expense, net 5,413 7,917
---------- ----------
Income before provision for income taxes 229,573 179,945
Provision for income taxes 91,417 69,131
---------- ----------
Net income $ 138,156 $ 110,814
========== ==========
Diluted earnings per share:
Net income $ 0.29 $ 0.23
Cash dividends declared per share $ 0.07 $ 0.06
Weighted average common shares for diluted
earnings per share computation (See Note 1) 477,485 492,817
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(In Thousands Except Per Share Amounts)
26 Weeks Ended
----------------------
July 29, July 30,
2006 2005
---------- ----------
Net sales $7,884,715 $7,299,696
---------- ----------
Cost of sales, including buying and occupancy
costs 5,997,250 5,596,630
Selling, general and administrative expenses 1,388,324 1,289,388
Interest expense, net 9,172 13,953
---------- ----------
Income before provision for income taxes 489,969 399,725
Provision for income taxes 188,004 153,330
---------- ----------
Net income $ 301,965 $ 246,395
========== ==========
Diluted earnings per share:
Net income $ 0.63 $ 0.50
Cash dividends declared per share $ 0.14 $ 0.12
Weighted average common shares for diluted
earnings per share computation (See Note 1) 481,438 497,716
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions)
July 29, July 30,
2006 2005
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 273.7 $ 181.7
Accounts receivable and other current assets 441.8 384.5
Current deferred income taxes, net 13.9 3.2
Merchandise inventories 2,923.4 2,814.7
-------- --------
Total current assets 3,652.8 3,384.1
-------- --------
Property and capital leases, net of depreciation 2,019.9 1,900.7
Non-current deferred income taxes, net 10.4 -
Other assets 130.2 124.0
Goodwill and tradename, net of amortization 183.2 183.5
-------- --------
TOTAL ASSETS $5,996.5 $5,592.3
======== ========
LIABILITIES
Current liabilities:
Short-term debt $ 140.9 $ 414.5
Accounts payable (See Note 2) 1,561.5 1,519.0
Accrued expenses and other current liabilities 1,045.0 915.1
-------- --------
Total current liabilities 2,747.4 2,848.6
-------- --------
Other long-term liabilities 585.3 510.8
Non-current deferred income taxes, net - 44.7
Long-term debt 789.1 575.1
Shareholders' equity 1,874.7 1,613.1
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,996.5 $5,592.3
======== ========
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
26 Weeks Ended
---------------------
July 29, July 30,
2006 2005
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $302.0 $246.4
Depreciation and amortization 172.5 156.7
Deferred income tax provision (8.5) (14.7)
Amortization of unearned stock compensation 39.0 46.7
(Increase) in accounts receivable and other
current assets (139.8) (133.7)
(Increase) in merchandise inventories (See
Note 2) (542.3) (474.7)
Increase in accounts payable (See Note 2) 239.2 249.6
Increase in accrued expenses and other
liabilities 114.3 96.5
Other, net 27.7 12.7
------ ------
Net cash provided by operating activities 204.1 185.5
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (179.4) (219.1)
Other 0.4 0.3
------ ------
Net cash (used in) investing activities (179.0) (218.8)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings of short-term debt 140.9 414.5
Principal payments on long-term debt - (100.0)
Cash payments for repurchase of common stock (375.0) (383.3)
Cash dividends paid (59.7) (49.9)
Other 71.5 26.6
------ ------
Net cash (used in) financing activities (222.3) (92.1)
------ ------
Effect of exchange rates on cash 5.3 (0.1)
------ ------
Net (decrease) in cash and cash equivalents (191.9) (125.5)
Cash and cash equivalents at beginning of year 465.6 307.2
------ ------
Cash and cash equivalents at end of period $273.7 $181.7
====== ======
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(Dollars In Thousands)
13 Weeks Ended
----------------------
July 29, July 30,
2006 2005
---------- ----------
Net sales:
Marmaxx $2,658,503 $2,537,311
Winners and HomeSense 400,536 316,842
T.K. Maxx 405,440 327,540
HomeGoods 301,347 259,116
A.J. Wright 158,065 147,251
Bob's Stores 64,341 59,806
---------- ----------
$3,988,232 $3,647,866
========== ==========
Segment profit (loss):
Marmaxx 208,265 202,295
Winners and HomeSense 41,477 18,563
T.K. Maxx 17,971 9,023
HomeGoods 4,198 (4,739)
A.J. Wright (5,041) (2,709)
Bob's Stores (4,037) (9,155)
---------- ----------
262,833 213,278
General corporate expenses 27,847 25,416
Interest expense, net 5,413 7,917
---------- ----------
Income before provision for income taxes $ 229,573 $ 179,945
========== ==========
Stores in operation at end of period
T.J. Maxx 807 777
Marshalls 729 700
Winners 178 167
HomeGoods 260 230
T.K. Maxx 202 184
A.J. Wright 156 143
HomeSense 61 47
Bob's Stores 36 34
----- -----
Total 2,429 2,282
===== =====
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
SELECTED INFORMATION BY MAJOR BUSINESS SEGMENT
(Unaudited)
(Dollars In Thousands)
26 Weeks Ended
----------------------
July 29, July 30,
2006 2005
---------- ----------
Net sales:
Marmaxx $5,305,205 $5,100,897
Winners and HomeSense 769,346 629,939
T.K. Maxx 754,760 645,246
HomeGoods 607,179 517,743
A.J. Wright 320,546 286,622
Bob's Stores 127,679 119,249
---------- ----------
$7,884,715 $7,299,696
========== ==========
Segment profit (loss):
Marmaxx 477,784 459,780
Winners and HomeSense 69,563 28,455
T.K. Maxx 17,770 6,787
HomeGoods 12,732 (5,405)
A.J. Wright (7,956) (6,882)
Bob's Stores (10,266) (16,141)
----------- -----------
559,627 466,594
General corporate expenses 60,486 52,916
Interest expense, net 9,172 13,953
---------- ----------
Income before provision for income taxes $ 489,969 $ 399,725
========== ==========
Stores in operation at end of period
T.J. Maxx 807 777
Marshalls 729 700
Winners 178 167
HomeGoods 260 230
T.K. Maxx 202 184
A.J. Wright 156 143
HomeSense 61 47
Bob's Stores 36 34
----- -----
Total 2,429 2,282
===== =====
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the fourth quarter of the fiscal year ended January 28, 2006 The
TJX Companies, Inc. elected to early adopt the provisions of
Statement of Financial Accounting Standards (SFAS) No. 123R,
"Accounting for Stock Based Compensation." SFAS No. 123R requires
that the cost of equity-based awards be recognized in the
financial statements. In addition, TJX elected the modified
retrospective transition method which requires that all prior
period financial statements be adjusted to the pro forma amounts
previously disclosed in the company's notes to its financial
statements. Thus the previously reported results for the thirteen
weeks and twenty-six weeks ended July 30, 2005 have been adjusted
to reflect the effect of adopting SFAS No. 123R.
2. We accrue for inventory purchase obligations at the time the
inventory is shipped rather than when received and accepted by
TJX. As a result, merchandise inventories include an estimate for
"inventory-in-transit" of $370 million as of July 29, 2006 and
$326 million as of July 30, 2005. A liability for a comparable
amount is included in accounts payable for the respective period.
3. During the six months ended July 29, 2006, TJX repurchased 15.9
million shares of its common stock at a cost of $381 million.
During the second quarter ended July 29, 2006, TJX repurchased 8.7
million shares of its common stock, at a cost of $204 million.
Through July 29, 2006, under its current $1 billion multi-year
stock repurchase program, TJX has spent $387 million on the
repurchase of 16.1 million shares of TJX common stock.
4. The following is a reconciliation of fiscal 2006's third quarter
and full year diluted earnings per share, as reported on a GAAP
basis, to the pro-forma diluted earnings per share referenced in
our earnings release under the caption "Third Quarter and Fiscal
2007 Outlook".
Fiscal Year Ended
January 28, 2006
-----------------------
Third Quarter Full Year
------------- ---------
Diluted earnings per share, as reported $ 0.32 $ 1.41
Impact of deferred tax liability correction - (0.04)
Repatriation income tax benefit - (0.10)
Third quarter events(a) 0.02 0.02
------- -------
Diluted earnings per share, as adjusted $ 0.34 $ 1.29
======= =======
(a) The third quarter events include executive resignation agreements,
e-commerce exit costs and operating losses, and hurricane related
costs including the estimated impact of lost sales, partially
offset by a gain from a VISA/MasterCard antitrust litigation
settlement.
CONTACT: The TJX Companies, Inc.
Sherry Lang, Vice President
Investor and Public Relations
(508) 390-2323