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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): May 15, 2007
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THE TJX COMPANIES, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 1-4908 04-2207613
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(State or other (Common File (I.R.S. employer
jurisdiction Number) identification No.)
of incorporation)
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770 Cochituate Road, Framingham, MA 01701
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(Address of Principal Executive Offices) (Zip Code)
(508) 390-1000
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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 May 15, 2007, The TJX Companies, Inc. issued a press
release which included financial results for the fiscal
quarter ended April 28, 2007. 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 May 15, 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: May 15, 2007
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
99.1 Press Release, dated May 15, 2007 of The TJX Companies, Inc.
Exhibit 99.1
The TJX Companies, Inc. Reports First Quarter FY08 Results
FRAMINGHAM, Mass.--(BUSINESS WIRE)--May 15, 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 first quarter ended April 28, 2007. Net sales
from continuing operations for the first quarter of fiscal 2008
increased 6% to $4.1 billion, and consolidated comparable store sales
increased 2% over last year. Income from continuing operations for the
first quarter was $162 million, and diluted earnings per share from
continuing operations were $.34. First quarter earnings include an
after-tax charge of $12 million, or $.03 per share with respect to the
previously announced unauthorized computer intrusion(s) (see below.)
Excluding this item, adjusted diluted earnings per share from
continuing operations for the first quarter were $.37 versus $.34 for
the prior year, a 9% increase, and in line with the Company's plan.
Carol Meyrowitz, President and Chief Executive Officer of The TJX
Companies, Inc., stated, "Our first quarter earnings results from
continuing operations were squarely within our expectations. We
achieved these results despite comparable store sales that were
slightly below plan, which we attribute to the unseasonably cold and
wet weather in many U.S. regions during March and early April. Our
first quarter results highlight the power of our off-price model in
that, through solidly executing our off-price fundamentals and by
leveraging expenses, we achieved our bottom-line goals despite falling
just short of our sales target. Business trends were strong as we
exited the quarter, and we are positioned extremely well to take
advantage of the abundant off-price buying opportunities in spring
apparel and other categories currently in the marketplace. Further, we
have many merchandise initiatives underway to drive sales as we move
forward."
Sales by Business Segment
The Company's comparable store sales and net sales by division, in
the first quarter, were as follows:
First Quarter First Quarter
Comparable Store Net Sales ($ in
Sales millions)
-------------------- ---------------
FY2008 FY2007 FY2008 FY2007
- --------------------------------- ---------- --------- ------- -------
Marmaxx(a) 0% +1% $2,729 $2,647
- --------------------------------- ---- ----- --- ----- ------- -------
Winners/HomeSense +2% (US$) +8% (US$) $395 $369
+3% (C$) +1% (C$)
- --------------------------------- ---- ----- --- ----- ------- -------
T.K. Maxx +21% (US$) -3% (US$) $443 $349
+8% (GBP) +5% (GBP)
- --------------------------------- ---- ----- --- ----- ------- -------
HomeGoods +3% +3% $333 $306
- --------------------------------- ---- ----- --- ----- ------- -------
A.J. Wright +1% +3% $144 $137
- --------------------------------- ---- ----- --- ----- ------- -------
Bob's Stores -1% +2% $64 $63
- --------------------------------- ---- ----- --- ----- ------- -------
- --------------------------------- ---- ----- --- ----- ------- -------
TJX +2% +1% $4,108 $3,871
- --------------------------------- ---- ----- --- ----- ------- -------
(a)Combination of T.J. Maxx and Marshalls
Impact of Computer Intrusion Charges
On January 17, 2007, TJX announced that it had suffered an
unauthorized intrusion(s) into portions of its computer systems that
process and store information related to customer transactions. In the
first quarter of fiscal 2008, the Company recorded an after-tax charge
of approximately $12 million, or $.03 per share, for costs incurred
during the first 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.
In the second quarter, the Company expects to continue to incur
these types of costs related to the intrusion(s), which the Company
estimates will total $.02 - $.03 per share. Beyond these costs, TJX
does not yet have enough information to reasonably estimate the losses
it may incur arising from this intrusion, including exposure to
payment card companies and banks, exposure in various legal
proceedings that are pending or may arise, and related fees and
expenses, and other potential liabilities and other costs and
expenses. The Company will record known losses when they become both
probable and reasonably estimable.
Margins
During the first quarter of fiscal 2008, the Company's
consolidated pretax profit margin from continuing operations was 6.4%.
Excluding the intrusion charge, the consolidated pretax profit margin
from continuing operations was 6.9%, a 0.2 percentage point
improvement over the prior year. The gross profit margin from
continuing operations for the fiscal 2008 first quarter was 24.1%,
down 0.4 percentage points versus the prior year primarily due to the
impact of slightly higher markdowns on merchandise margins. Selling,
general and administrative costs as a percent of sales was 17.3%, a
0.4 percentage point improvement over the prior year primarily due to
the Company's cost containment focus.
Inventory
Total inventories as of April 28, 2007, were $2.8 billion compared
with $2.6 billion at the same time in the prior year. Consolidated
inventories on a per-store basis, including the warehouses, at April
28, 2007, were up 7% versus being down 7% at the same time last year.
At the Marmaxx division, the total inventory commitment, including the
warehouses, stores and merchandise on order, was down versus last year
on a per-store basis. The Company remains very comfortable with its
inventory levels and the liquidity within its inventories, which gives
it the ability to take advantage of the plentiful buying opportunities
in the marketplace.
Share Repurchases
On March 28, 2007, the Company announced that it had entered into
a plan to repurchase shares of its common stock pursuant to 10b5-1 of
the Securities Exchange Act of 1934, as amended. The Company's share
buyback activity had been temporarily suspended since December 2006 as
a result of the discovery of the above-mentioned computer
intrusion(s). Under this 10b5-1plan, the Company resumed its share
repurchase activity at the end of the first quarter, spending $6
million in repurchases of TJX stock. The Company continues to expect
to repurchase up to $900 million of TJX stock during fiscal 2008,
significantly more than the $557 million of TJX stock that the Company
repurchased during fiscal 2007.
Discontinued Operations
The Company reports results from continuing operations, which
exclude the results of operations from 34 discontinued A.J. Wright
stores. These stores were closed during the fourth quarter of fiscal
2007 in order to reposition this business. Discontinued operations did
not impact earnings per share during the first quarter, as the net
income/(loss) from discontinued operations was immaterial.
Second Quarter and Fiscal 2008 Outlook
For the second quarter of fiscal 2008, the Company expects
earnings per share from continuing operations in the range of $.29 to
$.32, which includes an estimated $.02 - $.03 per share for costs
related to the computer intrusion(s) (detailed above.) Excluding these
costs, the Company expects earnings per share from continuing
operations in the range of $.32 to $.34 which represents a 10% to 17%
increase over $.29 per share in the prior year. This outlook is also
based upon estimated consolidated comparable store sales growth of
approximately 3% to 4%.
For the fiscal year ending January 26, 2008, the Company continues
to expect earnings per share from continuing operations excluding
costs related to the intrusion(s) 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. This range is based
upon estimated consolidated comparable store sales growth of
approximately 3%. The Company is not yet able to estimate fees, costs
and expenses related to the intrusion(s) for the third and fourth
quarters of fiscal 2008. Actual and estimated intrusion costs for the
first half of fiscal 2008 would reduce estimated earnings per share
from continuing operations by $.05 - $.06 per share.
The Company's second quarter and fiscal 2008 outlook do not
include any estimates for potential liabilities or losses arising from
the computer intrusion(s) (detailed above).
Stores by Concept
During the first quarter, the Company added a total of 25 stores.
TJX increased square footage by 4% over the same period last year.
Store Locations Gross Square Feet
First Quarter First Quarter
(in millions)
---------------- -----------------
Beginning End Beginning End
- ----------------------------------- --------- ------ ----------- -----
T.J. Maxx 821 830 24.8 25.0
- ----------------------------------- --------- ------ ----------- -----
Marshalls 748 763 24.2 24.4
- ----------------------------------- --------- ------ ----------- -----
Winners 184 185 5.4 5.4
- ----------------------------------- --------- ------ ----------- -----
HomeSense 68 69 1.6 1.7
- ----------------------------------- --------- ------ ----------- -----
HomeGoods 270 271 6.7 6.7
- ----------------------------------- --------- ------ ----------- -----
T.K. Maxx 210 211 6.4 6.4
- ----------------------------------- --------- ------ ----------- -----
A.J. Wright 129 127 3.3 3.3
- ----------------------------------- --------- ------ ----------- -----
Bob's Stores 36 35 1.6 1.6
- ----------------------------------- --------- ------ ----------- -----
- ----------------------------------- --------- ------ ----------- -----
TJX 2,466 2,491 74.0 74.5
- ----------------------------------- --------- ------ ----------- -----
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 830 T.J. Maxx, 763 Marshalls, 271 HomeGoods, and 127 A.J.
Wright stores, as well as 35 Bob's Stores, in the United States. In
Canada, the Company operates 185 Winners and 69 HomeSense stores, and
in Europe, 211 T.K. Maxx stores. TJX's press releases and financial
information are also available on the Internet at www.tjx.com.
Fiscal 2008 First Quarter Earnings Conference Call
At 11:00 a.m. ET today, Carol Meyrowitz, President and Chief
Executive Officer of TJX, will hold a conference call with stock
analysts to discuss the Company's first quarter fiscal 2008 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) 367-5577 through Tuesday,
May 22, 2007.
May Fiscal 2008 Sales Recording
Additionally, the Company expects to release its May 2007 sales
results on Thursday, June 7, 2007, at approximately 8:15 a.m. ET.
Concurrent with that press release, a recorded message with more
detailed information regarding TJX's May sales results, operations and
business trends will be available via the Internet at www.tjx.com, or
by calling (703) 736-7248 through Thursday, June 14, 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
or intrusions 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; 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
---------------------------
April 28, April 29,
2007 2006
------------- -------------
Net sales $ 4,108,081 $ 3,871,256
Cost of sales, including buying and
occupancy costs 3,117,215 2,922,849
Selling, general and administrative
expenses 709,277 684,166
Costs related to computer intrusion 20,004 -
Interest (income) expense, net (2,076) 3,759
------------- -------------
Income from continuing operations before
provision for income taxes 263,661 260,482
Provision for income taxes 101,553 96,620
------------- -------------
Income from continuing operations 162,108 163,862
Loss from discontinued operations, net of
income taxes - (53)
------------- -------------
Net income $ 162,108 $ 163,809
============= =============
Diluted earnings per share:
Income from continuing operations $ 0.34 $ 0.34
Net income $ 0.34 $ 0.34
Cash dividends declared per share $ 0.09 $ 0.07
Weighted average shares for diluted
earnings per share computation 479,025,606 484,947,472
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)
April 28, April 29,
2007 2006
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 781.2 $ 279.9
Accounts receivable and other current assets 411.1 411.0
Current deferred income taxes, net 35.8 11.6
Merchandise inventories 2,829.3 2,555.3
--------- ---------
Total current assets 4,057.4 3,257.8
--------- ---------
Property and capital leases, net of depreciation 2,052.0 2,022.0
Non-current deferred income taxes, net - 11.4
Other assets 195.4 145.0
Goodwill and tradename, net of amortization 182.9 183.4
--------- ---------
TOTAL ASSETS $6,487.7 $5,619.6
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,562.0 $1,450.9
Accrued expenses and other current liabilities 951.1 884.2
--------- ---------
Total current liabilities 2,513.1 2,335.1
--------- ---------
Other long-term liabilities 746.5 566.1
Non-current deferred income taxes, net 8.1 -
Long-term debt 800.0 789.6
Shareholders' equity 2,420.0 1,928.8
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $6,487.7 $5,619.6
========= =========
The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Statements of Cash Flows
(Unaudited)
(In Millions)
Thirteen Weeks Ended
---------------------
April 28, April 29,
2007 2006
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 162.1 $ 163.8
Depreciation and amortization 90.5 86.0
Deferred income tax provision (9.4) (10.0)
Amortization of stock compensation 14.4 19.5
(Increase) in accounts receivable and other
current assets (124.9) (108.4)
(Increase) in merchandise inventories (229.4) (175.6)
Increase in accounts payable 178.5 128.9
(Decrease) in accrued expenses and other
liabilities (68.3) (70.0)
Other 3.4 16.6
---------- ----------
Net cash provided by operating activities 16.9 50.8
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (95.2) (96.0)
Other 0.2 0.2
---------- ----------
Net cash (used in) investing activities (95.0) (95.8)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for repurchase of common stock - (164.9)
Proceeds from sale and issuance of common
stock 19.0 47.1
Cash dividends paid (31.8) (27.7)
Other 2.1 (0.4)
---------- ----------
Net cash (used in) financing activities (10.7) (145.9)
---------- ----------
Effect of exchange rate changes on cash 13.3 5.2
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Net (decrease) in cash and cash equivalents (75.5) (185.7)
Cash and cash equivalents at beginning of year 856.7 465.6
---------- ----------
Cash and cash equivalents at end of year $ 781.2 $ 279.9
========== ==========
The TJX Companies, Inc. and Consolidated Subsidiaries
Selected Information by Major Business Segment
(Unaudited)
(In Thousands)
Thirteen Weeks Ended
-----------------------
April 28, April 29,
Net sales: 2007 2006
----------- -----------
Marmaxx $2,729,495 $2,646,702
Winners and HomeSense 394,646 368,810
T.K. Maxx 442,619 349,320
HomeGoods 333,156 305,832
A.J. Wright 144,157 137,254
Bob's Stores 64,008 63,338
----------- -----------
$4,108,081 $3,871,256
=========== ===========
Segment profit or (loss):
Marmaxx $ 272,606 $ 269,519
Winners and HomeSense 26,801 28,086
T.K. Maxx 4,616 (201)
HomeGoods 10,209 8,534
A.J. Wright (3,033) (2,829)
Bob's Stores (6,569) (6,229)
----------- -----------
304,630 296,880
General corporate expense 23,041 32,639
Costs related to computer intrusion 20,004 -
Interest (income) expense, net (2,076) 3,759
----------- -----------
Income from continuing operations
before provision for income taxes $ 263,661 $ 260,482
=========== ===========
The TJX Companies, Inc. and Consolidated Subsidiaries
Notes to Consolidated Condensed Statements
1. During the fourth quarter of fiscal 2007 TJX closed 34 of its
A.J. Wright stores and recorded the cost to close the stores, as well
as operating results of the stores, as discontinued operations.
Accordingly, the financial statements for the prior period ended April
29, 2006 have been adjusted to reclassify the operating results of the
closed stores as discontinued operations.
2. TJX suffered an unauthorized intrusion or intrusions into
portions of its computer system that process and store information
related to credit and debit card, check and unreceipted merchandise
return transactions (the intrusion or intrusions, collectively, the
"Computer Intrusion"), which was discovered during the fourth quarter
of fiscal 2007. TJX has been engaged in an investigation of the
Computer Intrusion, and computer security and incident response
experts have been assisting in the investigation. TJX believes that
customer information was stolen in the Computer Intrusion in 2005 and
2006 and that such information primarily relates to portions of the
transactions at its stores (other than Bob's Stores) during the
periods 2003 through June 2004 and mid-May 2006 through mid-December
2006.
TJX recorded an after-tax charge of approximately $12 million, or
$0.03 per share, for costs incurred during the first quarter in
connection with the Computer Intrusion in addition to an after-tax
charge of approximately $3 million for such costs recorded in the
fourth quarter of fiscal 2007. These charges include costs incurred to
date to investigate and contain the Computer Intrusion, strengthen
computer security and systems, and communicate with customers, and for
technical, legal and other related costs. In addition to these costs,
TJX has ongoing costs and expenses with respect to the Computer
Intrusion as well as potential losses related to the Computer
Intrusion, but at this time it does not have sufficient information to
reasonably estimate a range of such costs and expenses or the
potential exposure for such losses. As such, no liability for such
costs, expenses or potential losses has been recorded as of April 28,
2007. TJX will continue to evaluate information as it becomes known
and will record an estimate for losses at the time or times when it is
both probable that a loss has been incurred and the amount of the loss
is reasonably estimable. Such costs, expenses and losses could be
material to TJX's results of operations and financial condition.
3. On March 28, 2007, TJX announced that it had entered into a
plan to repurchase shares of its common stock pursuant to Rule 10b5-1
of the Securities Exchange Act of 1934, as amended. TJX had
temporarily suspended its buyback activity as a result of the
discovery of the Computer Intrusion. Under this 10b5-1 plan, TJX
resumed its share repurchase activity at the end of the first quarter,
spending $6 million on the repurchase of TJX stock in the quarter. TJX
records the repurchase of its stock on a cash basis. Through April 28,
2007, under its current $1 billion multi-year stock repurchase
program, TJX spent $570 million on the repurchase of 22.5 million
shares of TJX common stock. In January 2007, the Board of Directors
approved a new stock repurchase program that authorized the repurchase
of up to $1 billion of TJX common stock from time to time, which was
in addition to the $430 million remaining in the existing plan as of
the end of the first quarter.
4. In June 2006, the FASB issued FASB Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109" (FIN 48). FIN 48 clarifies the accounting for
uncertainties in income taxes recognized in an enterprise's financial
statement. FIN 48 requires that TJX determine whether it is more
likely than not that a tax position will be sustained upon examination
by the appropriate taxing authority and if so, recognize the largest
amount of benefit greater than 50% likely of being realized upon
ultimate settlement. FIN 48 must be applied to all existing tax
positions upon initial adoption. TJX adopted FIN 48 in the first
quarter ended April 28, 2007 and the net impact of adoption on its
financial position was immaterial. However, in connection with the
adoption, certain amounts that were historically netted within other
liabilities were reclassed to other assets.
CONTACT: The TJX Companies, Inc.
Sherry Lang
Senior Vice President
Investor and Public Relations
(508) 390-2323