TJX Companies Comps Rose 7 Percent in Last Fiscal Year

The TJX Companies, Inc., which acquired Sierra Trading Post in December, 2012, reported net sales for the 53-week fiscal year ended Feb. 2, reached $25.9 billion, a 12 percent increase over last year.

For the 14-week fourth quarter ended February 2, 2013, net sales were $7.7 billion, a 15 percent increase over the prior year. Consolidated comparable store sales for the quarter on a 13-week basis increased 4 percent over the prior years 7 percent increase. Net income for the 14-week fourth quarter was $605 million and diluted earnings per share were $.82, a 32 percent increase over last years $.62.

 The year 2012 was another great year for TJX on top of many great years! ,  said Carol Meyrowitz, CEO of The TJX Companies, Inc. We achieved adjusted EPS growth of 28 percent on sales of nearly $26 billion and consolidated comp store sales growth of 7 percent, marking the fourth consecutive year of very strong sales and double-digit EPS increases. Customer traffic was up across all of our divisions as our off-price shopping experience continued to resonate with customers, even with the growth in online shopping in the retail industry.

Marmaxx, which includes the T.J. Maxx and Marshalls banners expanded into more rural markets as well as major cities. HomeGoods gained traction as a shopping destination for exciting, quality product from around the world. TJX Canada delivered very strong results with Marshalls in Canada exceeding expectations, and TJX Europe has regained its momentum and opens up enormous growth opportunity, Meyrowitz said.

We believe this all speaks to the staying power of our value proposition of extreme values on exciting fashions and brands. As large as we are, we have enormous store growth potential and are excited about the opportunity to leverage the success of our brick-and-mortar business with e-commerce over time. Our management team is focused on our four powerful divisions, and I am as confident as ever in our ability to continue driving profitable sales growth for many years to come. We are well on the road to being a $40 billion-plus company!

Margins

For the full year Fiscal 2013, the companys consolidated pretax profit margin was 11.9 percent, up 1.2 percentage points over the prior years adjusted margin. The increase was primarily driven by merchandise margin improvement, as well as expense leverage on the above-plan sales. The 53rd week in the Fiscal 2013 calendar positively impacted pretax margins by approximately 0.2 percentage points.

The gross profit margin for Fiscal 2013 was 28.4 percent, 1.0 percentage points above the adjusted margin in the prior year primarily driven by improved merchandise margins across all divisions coupled with buying and occupancy leverage. Selling, general and administrative costs as a percent of sales were 16.4 percent, a 0.1 percentage point improvement over the prior years adjusted ratio.

For the fourth quarter of Fiscal 2013, the companys consolidated pretax profit margin was 12.5 percent, up 1.2 percentage points over the prior years pretax profit margin. This increase was primarily driven by improved merchandise margins with some expense leverage on the above-plan sales. The 53rd week in Fiscal 2013 positively impacted fourth quarter pretax margins by approximately 0.6 percentage points.

The gross profit margin for the fourth quarter of Fiscal 2013 was 28.6 percent, 1.4 percentage points above the prior year. The increase was primarily driven by merchandise margin improvement as well as expense leverage on the above-plan sales. Selling, general and administrative costs as a percent of sales were 16.0 percent in the fourth quarter, a 0.2 percentage point increase over the prior years ratio of 15.8 percent largely due to the companys contribution to The TJX Foundation, higher incentive compensation accruals with the companys above-plan results and transaction expenses related to the company’s acquisition of Sierra Trading Post.

Inventory

Total inventories as of February 2, 2013, were $3.0 billion, compared with $3.0 billion at the end of the prior fiscal year. Consolidated inventories on a per-store basis, including the distribution centers, at February 2, 2013, were down 6 percent on both a reported and constant currency basis. The company begins the new fiscal year with excellent inventory levels and is very well positioned to buy into the plentiful opportunities it sees in the marketplace and continue shipping fresh spring merchandise to its stores.

Full year and first quarter fiscal 2014 outlook

For the fiscal year ending February 1, 2014, the company expects diluted earnings per share to be in the range of $2.66 to $2.78 versus $2.55 in Fiscal 2013. Excluding the approximately $.08 benefit from the 53rd week in the companys Fiscal 2013 calendar, this guidance would represent an 8 percent to 13 percent increase over the adjusted $2.47 in Fiscal 2013. This outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

For the first quarter of Fiscal 2014, the company expects diluted earnings per share to be in the range of $.59 to $.62, which would represent a 7 percent to 13 percent increase over last years $.55 per share. This outlook is based upon estimated consolidated comparable store sales growth of 0 percent to 2 percent.

The companys earnings guidance for the first quarter and full year Fiscal 2014 assumes that currency exchange rates will remain unchanged from current levels.

Stores by concept

During the fiscal year ended Feb. 2, 2013, the company increased its store count by a net of 145 stores to end the year with 3,050 stores. The company increased square footage by 4 percent over the same period last year.

*Square feet figures may not foot due to rounding. **TJX acquired Sierra Trading Post on December 21, 2012.