The TJX Companies, Inc. announced net sales for the fiscal second quarter were $3.0 billion, a 10% increase over last year, with consolidated comparable store sales increasing 2%. Net income was $123 million and diluted earnings per share were $.24, which equalled last year's earnings per share.
For the first half of fiscal 2004, net sales were $5.8 billion, 7% over last year, and year-to-date consolidated comparable store sales were flat versus last year's 4% increase. Net income was $237 million and diluted earnings per share were $.46, versus $.51 per share last year.
Edmond English, President and Chief Executive Officer of The TJX Companies, Inc. commented, “We planned our second quarter conservatively against our very strong second quarter performance last year, when earnings per share rose 20%. This year's second quarter earnings per share were within the adjusted range we anticipated as we entered July and just shy of our original expectations. There were three major factors that contributed to this year's second quarter results. First, the unseasonably cool and rainy weather that persisted throughout May and early June negatively impacted sales and merchandise margins. Second, we continued to manage our inventories and open-to-buy positions very aggressively. This allowed us to stay abreast of current market trends and steadily flow fresh merchandise assortments to our stores. Third, our younger divisions, T.K. Maxx, HomeGoods and A.J. Wright, performed extremely well. This is positive in the short term and very important for the future growth of TJX.
“At The Marmaxx Group, the combination of T.J. Maxx and Marshalls, second quarter sales increased 4% and comparable store sales were flat versus last year. Segment profit was $192 million, down from last year's very strong results, which were driven by exceptionally strong merchandise margins. This division missed its sales plan because of the unseasonably cool weather patterns in the first half of the quarter, which in turn, resulted in greater markdown activity. Despite this challenge, this major division continued to do an excellent job of buying the right goods and maintaining inventory liquidity. In addition, good expense control benefited results at Marmaxx. Our big opportunities at The Marmaxx Group lie ahead in the second half of the year and we are confident in our ability to capitalize upon them. We continue to be pleased with Marmaxx's new stores and now expect to add 77 stores this year.”
English continued, “At our Canadian divisions, Winners and HomeSense, total sales increased 33% in the second quarter. Comparable store sales increased 16%. In local currency, Winners' comparable store sales increased 3% over last year's strong performance. Segment profit increased 11% over last year due to favorable currency exchange rates. We now expect to net 14 additional Winners stores in 2003. In addition, we continue to be very pleased with customer response to HomeSense, our Canadian home fashions concept, and now expect to open 10 new HomeSense stores this year.
“HomeGoods had an excellent quarter, with overall sales coming in above expectations and increasing 23%, and comparable store sales growing 4%. HomeGoods' second quarter segment profit doubled its plan and tripled last year's results. This division's new stores continue to open very strongly. In addition, the HomeGoods organization is doing a great job of merchandising and managing inventories. We now expect to net 39 additional HomeGoods stores this year.
“T.K. Maxx, in the U.K. and Ireland, had a strong second quarter, increasing total sales by 33% and posting a comparable store sales increase of 14%. In local currency, T.K. Maxx's comparable store sales increased 4% over last year. Segment profit exceeded plan and increased 20% over last year, due to this division's strong execution of its off-price mission as well as favorable currency exchange rates. We are pleased with the continued growth of T.K. Maxx in the U.K. and Ireland and the success of our new stores, and we now expect to open 24 T.K. Maxx stores this year.”
English continued, “We are delighted with A.J. Wright's second quarter results. This young division posted an impressive total sales increase of 61% and a comparable store sales gain of 11% on top of a 10% increase last year. A.J. Wright's bottom line significantly outperformed our goals and last year's results. Our new A.J. Wright stores, as well as those open for more than one year, are doing extremely well. Further, A.J. Wright is doing an excellent job of merchandising, resulting in very strong merchandise margins. We now anticipate netting 24 additional A.J. Wright stores in 2003.
“During the second quarter, we continued with our aggressive share repurchase program, spending a total of $125 million and retiring 6.8 million shares of TJX stock. Over the last six months, we have spent a total $265 million to repurchase TJX stock and have retired a total of 15 million shares.”
English concluded, “We are enthusiastic about our prospects in the important second half of this year. The Marmaxx Group has significant opportunities in year-over-year comparisons. Our younger divisions are firing on all cylinders, taking an increasingly important role in our results. Our new stores across the board continue to outperform our goals and we are on track to grow our store base by 10% this year. Finally, we are in an excellent inventory position and poised to capitalize on the tremendous product opportunities in the marketplace to offer our customers great fashions at great values.”
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL SUMMARY
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)
Thirteen Weeks Ended
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July 26, July 27,
2003 2002
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Net sales $3,046,184 $2,765,089
Cost of sales, including buying
and occupancy costs 2,327,058 2,078,736
Selling, general and
administrative expenses 510,818 469,528
Interest expense, net 7,228 5,963
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Income before provision for
income taxes 201,080 210,862
Provision for income taxes 77,818 81,235
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Net income $ 123,262 $ 129,627
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Diluted earnings per share:
Net income $ .24 $ .24
Cash dividends declared per
share $ .035 $ .03
