The TJX Companies, Inc. announced diluted earnings per share for the 53-week fiscal year increased to $1.28, a 19% increase over $1.08 per share in the prior 52-week fiscal year. Net income was $658 million, a 14% increase over the $578 million reached last year. Net sales for the 53-week fiscal year were $13.3 billion, up 11% over the previous 52-week year, and consolidated comparable store sales increased 1% on a comparable 52- to 52-week basis.
For the 14-week fiscal 2004 fourth quarter, diluted earnings per share increased to $.47, up 62% over the prior year's 13-week fourth quarter earnings per share of $.29. Net income increased significantly to $239 million and sales increased to $4.1 billion. Consolidated comparable store sales increased 3% in the fourth quarter on a comparable 13- to 13-week basis.
Edmond English, President and Chief Executive Officer of The TJX Companies, Inc., commented, “2003 was a year of many accomplishments for TJX. I am very pleased that we achieved EPS growth of 19%, which was in the higher end of the range that we anticipated a year ago. I am also delighted that our strong results led to a 44% after-tax return on average shareholders' equity, with 2003 marking the fifth consecutive year that we have achieved an after-tax ROE of 42% or greater. While comparable store sales were below our expectations, our new stores across all of our divisions posted excellent results, which bodes well for the future growth of our Company. We added 219 stores company-wide and grew our selling square footage base by 10% from our existing concepts and, with the acquisition of Bob's Stores, ended the year with 2,062 stores worldwide. Our largest division, The Marmaxx Group, delivered very solid results and each of our younger businesses exceeded its bottom-line goal for the year. Our fourth quarter and full year results were also benefited by favorable currency conversion rates and the addition of an extra week in this year's fiscal calendar.”
English continued, “At The Marmaxx Group, the internal combination of T. J. Maxx and Marshalls, segment profit for 2003 increased to $962 million, up 8% over the $888 million earned last year. Marmaxx's full year segment profit margin increased to 9.7% of sales, exceeding our plan. Total sales for the year were $9.9 billion and comparable store sales for the year decreased 1% on a comparable week basis. Although we had higher comparable store sales expectations for Marmaxx, we are very pleased with its excellent bottom-line performance. For the fourth quarter, segment profit was $311 million, 50% above last year's $208 million. Marmaxx's fourth quarter segment profit margin increased to 10.6%, well above the prior year's level. Comparable store sales for the quarter were flat on a comparable week basis versus last year. Marmaxx's exceptionally strong margin performance in the face of a very promotional retail landscape is a testament to this division's sharp execution of its merchandising and inventory strategies. Marmaxx did an excellent job of maintaining strong merchandise margins, taking advantage of our expanded distribution capacity to make even closer-to-need buys this year, enhancing our competitive edge. Marmaxx was also successful in controlling expenses in 2003. We netted 76 additional stores in 2003 to end the year with 1,418 stores and added 6% more selling square footage. Our plans are to increase store count for The Marmaxx Group by 60 stores in 2004 and grow our selling square footage by 5%.
“Sales for Winners and HomeSense, our Canadian divisions, topped the billion-U.S.-dollar mark, totaling $1.1 billion, a 36% increase. Comparable store sales on a comparable week basis increased by 19% in U.S. dollars and 4% in local currency, which we believe more closely reflects our operating performance. Segment profit margin was 9.9% and segment profit increased 25% to $107 million, reflecting the growth of our Canadian operations and the favorable exchange rate. In the fourth quarter, comparable store sales on a comparable week basis increased 25% in U.S. dollars and were up 5% in local currency. For the fourth quarter, segment profit grew to $41 million, due to Winners' solid margin performance and, to a lesser extent, the benefit of the foreign exchange rate. We are pleased with the continued growth of our Winners and HomeSense chains across Canada. In 2003, we opened our first superstores, combining a Winners and HomeSense in one retail location, with great success. We added 14 Winners stores in 2003, bringing its year-end total to 160. In addition, this division successfully added 10 HomeSense stores, to end the year with 25 stores. We grew selling square footage of our Canadian business by 14%. In 2004, we plan to add 8 Winners and 15 HomeSense stores and grow their combined selling square footage by 13%.
“Each of our younger divisions posted excellent results. Beginning with HomeGoods, this division outpaced our bottom-line expectations by achieving a segment profit increase of 55% to $50 million and a segment profit margin of 5.7% for the year. Total sales reached $877 million and HomeGoods' comparable store sales on a comparable week basis increased 1% for the year. While this sales performance did not meet our expectations, we are extremely pleased with this division's ability to deliver on the bottom line. HomeGoods exhibited excellent execution of its merchandising and inventory strategies in 2003 and exceeded our profit objectives. For the fourth quarter, while comparable store sales on a comparable week basis decreased 1%, segment profit increased 56% and segment profit margin grew to 7.9%. We added 40 HomeGoods to our store base during the year, bringing our year-end total to 182, and increased our selling square footage by 25%. We will continue rolling out new stores in the freestanding and superstore format in 2004, and expect to add 40 stores to the HomeGoods chain. We plan to increase HomeGoods' selling square footage by 20% during the year.”
English continued, “T.K. Maxx, in the U.K. and Ireland, had an outstanding year, exceeding our sales and profit expectations, while successfully expanding its selling square footage base. Sales for the year totaled $992 million with comparable store sales on a comparable week basis increasing 16% in U.S. dollars and up 6% in local currency. Segment profit increased 37% to $59 million. In the fourth quarter, comparable store sales on a comparable week basis increased 16% in U.S. dollars and were up 5% in local currency while segment profit increased to $32 million in the fourth quarter. T.K. Maxx's profit growth in both periods was driven by strong execution of its merchandising and inventory strategies, its continued levering of expenses as this business grows, and to a lesser extent, the favorable foreign exchange rate. T.K. Maxx made excellent use of mezzanine floor space, adding more selling square footage with little additional rental costs. T.K. Maxx added 24 stores in 2003 to end the year with 147 stores and increased its selling square footage by 24%. We plan to open 25 T.K. Maxx stores in 2004 and increase this division's selling square footage by 26%.
“A.J. Wright also had a very successful year, far surpassing our bottom-line expectations and achieving profitability for the first time. This young division also continued to successfully add new stores, growing its store base by 32%. For the year, A.J. Wright increased total sales to $422 million and comparable store sales on a comparable week basis increased by 8%. Segment profit exceeded our expectations, reaching $1.7 million. In the fourth quarter, comparable store sales on a comparable week basis increased 3%. We are very pleased with the successful growth of this concept, as it continues to take hold with moderate-income customers, offering them a unique off-price shopping experience. A.J. Wright netted 24 additional stores in 2003, ending the year with 99 stores and 31% more selling square footage. We plan to add 32 new A.J. Wright stores in 2004 and increase its selling square footage base by 31%.
“In 2003, our strong operations and significant returns on investment continued to result in our generating excess cash, which we utilized to fund all of our organic growth, acquire Bob's Stores, and continue our aggressive share buyback program. During the year, we spent $515 million on share repurchases and retired 27 million shares. In 2004, we expect to continue our sizable buyback program with planned spending of an additional $550 million.”
English concluded, “As we begin 2004, I am very confident in our ability to continue growing our business this year and well into the future. We will continue to expand our existing businesses and are very excited about the great growth potential of our younger businesses. New stores across all divisions are performing extremely well. With our liquid inventories, we are well positioned to continue to capitalize upon the abundant buying opportunities in the marketplace and offer our customers the best off-price values. Our very strong financial position continues to serve as a foundation with which to grow in 2004 and beyond.”
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
14 Weeks 13 Weeks
Ended Ended
January 31, January 25,
2004 2003
Net sales $4,105,597 $3,505,481
Cost of sales, including buying and
occupancy costs 3,108,457 2,721,877
Selling, general and administrative
expenses 609,315 527,646
Interest expense, net 5,816 5,903
Income before provision for income taxes 382,009 250,055
Provision for income taxes 143,270 95,752
Net income $ 238,739 $ 154,303
Diluted earnings per share:
Net income $ .47 $ .29
Cash dividends declared per share $ .035 $ .03
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
53 Weeks 52 Weeks
Ended Ended
January 31, January 25,
2004 2003
Net sales $13,327,938 $11,981,207
Cost of sales, including buying and
occupancy costs 10,077,194 9,079,579
Selling, general and administrative
expenses 2,155,166 1,938,531
Interest expense, net 27,252 25,373
Income before provision for income taxes 1,068,326 937,724
Provision for income taxes 409,961 359,336
Net income $ 658,365 $ 578,388
Diluted earnings per share:
Net income $ 1.28 $ 1.08
Cash dividends declared per share $ .14 $ .12
