The TJX Companies, Inc. saw net sales for the second quarter of $4.0 billion, representing a 9% increase over last year, while comparable store sales increased 4%. Net income increased 24.7% to $138 million and diluted earnings per share were 29 cents, a 26% increase over 23 cents 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 cents, a 26% increase over 50 cents 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 cents to 41 cents, an estimated increase of 22% to 28% over 32 cents 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. 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. 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
--------------------------- ----------- --------- ----------- --------

        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