The TJX Companies, Inc. reported fourth-quarter sales were $7.8 billion, a 1 percent increase over the 14-week prior-year period. Consolidated comparable store sales increased 3 percent.

Net income was $582 million and diluted earnings per share were $.81 compared with last year’s $.82 per share. Diluted earnings per share increased 9 percent over last year’s adjusted $.74, which excludes the approximately $.08 benefit from the extra week in the fourth quarter of Fiscal 2013.

Net sales for the 52-week fiscal year were $27.4 billion, a 6 percent increase over the 53-week fiscal period last year. Consolidated comparable store sales increased 3 percent on a 52-week comparable basis. Net income for the 52-week fiscal year was $2.1 billion, and diluted earnings per share were $2.94, a 15 percent increase over $2.55 last year. Excluding a third quarter tax benefit of $.11 per share, adjusted diluted earnings per share were $2.83, a 15 percent increase over the prior year’s adjusted earnings per share of $2.47, which excludes the approximately $.08 benefit from the 53rd week in Fiscal 2013.

Carol Meyrowitz, Chief Executive Officer of The TJX Companies, Inc., stated, “The year 2013 was another successful year for TJX, on top of many great years. We achieved EPS growth of 15 percent over last year’s adjusted 24 percent increase, and consolidated comp sales increased 3 percent over last year’s 7 percent increase. In the U.S., Marmaxx and HomeGoods continued their excellent, consistent performance. We also successfully launched tjmaxx.com, which, along with the smooth transition of Sierra Trading Post into TJX, gives more consumers the ability and convenience to shop our great values 24 hours a day, seven days a week. TJX Canada was in line with our plan for the year and continued to expand Marshalls across that country. TJX Europe delivered another outstanding year, and we could not be more excited about our international growth opportunities! We delivered these results in a competitive retail environment and despite generally unfavorable weather in many of our regions during the first and fourth quarters. We believe this speaks to the resiliency and flexibility of our off-price model, as we exceeded our long-term plan of 10 percent to 13 percent compound annual EPS growth for the fifth consecutive year.”

Meyrowitz continued, “We begin a new fiscal year in an excellent position to pursue our near- and long-term opportunities. Our inventories are extremely lean, which affords us enormous flexibility to buy into the plentiful opportunities we see in the marketplace for branded merchandise. We have many exciting initiatives planned this year, and above all, will continue to offer consumers amazing values on great fashions and brands! As we approach $30 billion in annual sales, we continue to see tremendous global growth potential for TJX. Our management team is laser focused on executing on our top- and bottom-line growth opportunities and passionate about surpassing our goals. I am as confident as ever in our ability to keep driving profitable sales, while investing in our future growth, as we continue on the road to becoming a $40 billion company and beyond!”

Increase in Shareholder Distributions

The Company also announced today its plan to repurchase approximately $1.6 to $1.7 billion of TJX stock during the fiscal year ending January 31, 2015. With $970 million remaining at Fiscal 2014 year end under the Company’s existing stock repurchase program, the Company’s Board of Directors approved a new stock repurchase program that authorizes the repurchase of up to an additional $2.0 billion of TJX common stock from time to time. The new authorization represents approximately 5 percent of the Company’s outstanding shares at current prices. The new stock repurchase program marks the 15th program approved by the Board since 1997. Over this period, the Company has spent approximately $12.8 billion on the repurchase of TJX stock. In Fiscal 2014, the Company spent a total of $1.5 billion to repurchase TJX stock, retiring 27.0 million shares. During the fourth quarter, the Company spent a total of $455 million to repurchase TJX stock, retiring 7.3 million shares. Under the Company’s repurchase plans, share repurchases may be made from time to time in market or private transactions and may include derivative transactions. The repurchase program announced today has no time limit and may be suspended or discontinued at any time.

The Company also intends to increase the regular quarterly dividend on its common stock to be declared in April 2014 and payable in June 2014 to $.175 per share, subject to the approval of the Company’s Board of Directors. This increase would represent a 21 percent increase in the current per share dividend and mark the 18th consecutive year that the Company has raised the dividend. Over this period of time, the Company’s dividend has grown at a compound annual rate of 23 percent.

Carol Meyrowitz commented, “Our business continues to generate tremendous amounts of cash and deliver excellent financial returns. In Fiscal 2015, we plan to continue to invest in the growth of our business while returning cash to our shareholders. Our capital spending plans include investing in new stores, our supply chain and infrastructure, and store remodels. Simultaneously, we plan to continue our large share buyback program, with $1.6 to $1.7 billion of repurchases planned for Fiscal 2015, and to significantly increase our regular quarterly dividend. All of this underscores our confidence in our ability to continue to deliver significant increases in sales, earnings, and cash flow, and generate superior financial returns.”

Sales by Business Segment

The Company’s comparable store sales and net sales by division for the full year were as follows:

                                          
1Comparable store sales outside the U.S. calculated on a constant currency basis, which removes the effect of changes in currency exchange rates. For FY2013, comparable store sales are for the 52-week period ended January 26, 2013 versus the same period in FY2012. 2Sales in Canada and Europe include the impact of foreign currency exchange rates. See below. 3Figures may not foot due to rounding. 4Combination of T.J. Maxx and Marshalls. 5Net sales include Sierra Trading Post.

The Company’s comparable store sales and net sales by division, in the fourth quarter, were as follows:

1Comparable store sales outside the U.S. calculated on a constant currency basis, which removes the effect of changes in currency exchange rates. For the Fiscal 2013 fourth quarter, comparable store sales are for the 13-week period ended January 26, 2013 versus the same period in Fiscal 2012. 2Sales in Canada and Europe include the impact of foreign currency exchange rates. See below. 3Figures may not foot due to rounding. 4Combination of T.J. Maxx and Marshalls. 5Net sales include Sierra Trading Post.

Impact of Foreign Currency Exchange Rates


Changes in foreign currency exchange rates affect the translation of sales and earnings of the Company’s international businesses into U.S. dollars for financial reporting purposes. In addition, ordinary-course, inventory-related hedging instruments are marked to market at the end of each quarter. Changes in currency exchange rates affect the magnitude of these translations and adjustments, and can have a material impact when there is significant volatility in currency exchange rates.

The movement in foreign currency exchange rates had a neutral impact on consolidated net sales growth for the full Fiscal 2014 year versus the prior year. The overall net impact of foreign currency exchange rates had a $.01 negative impact on full year Fiscal 2014 earnings per share, compared with a neutral impact last year.

The movement in foreign currency exchange rates had a neutral impact on consolidated net sales growth in the fourth quarter of Fiscal 2014 versus the prior year’s fourth quarter. The overall net impact of foreign currency exchange rates had a $.01 positive impact on fourth quarter Fiscal 2014 earnings per share, compared with a neutral impact last year.

A table detailing the impact of foreign currency on TJX pretax earnings and margins, as well as those of its international businesses, can be found in the Investor Information section of the Company’s website, tjx.com.

Margins

For the full year Fiscal 2014, the Company’s consolidated pretax profit margin was 12.1 percent, a 0.2 percentage point increase over the prior year’s 11.9 percent margin, which included an approximately 0.2 percentage point benefit from the 53rd week in Fiscal 2013. On a 52-week adjusted basis, pretax profit margins increased 0.4 percentage points.

The gross profit margin for Fiscal 2014 was 28.5 percent, up 0.1 percentage points over the prior year. Selling, general and administrative costs as a percent of sales were 16.3 percent, a 0.1 percentage point improvement over the prior year’s ratio. Again, last year’s results included the benefit of the 53rd week in Fiscal 2013.

For the fourth quarter of Fiscal 2014, the Company’s consolidated pretax profit margin was 12.0 percent, a 0.5 percentage point decrease compared with the prior year’s 12.5 percent margin, which included an approximately 0.6 percentage point benefit from the extra week in the fourth quarter of Fiscal 2013. On a 13-week adjusted basis, pretax profit margins increased 0.1 percentage points.

The gross profit margin for the fourth quarter of Fiscal 2014 was 27.6 percent, down 1.0 percentage points versus the prior year. This decline primarily reflects the benefit from the extra week last year. Gross margins were also impacted by a decrease in merchandise margins as the Company aggressively priced merchandise in a highly promotional holiday selling environment and took markdowns in January to end the year with very clean inventories. Selling, general and administrative costs as a percent of sales were 15.6 percent, a 0.4 percentage point improvement over the prior year’s ratio, due to year-over-year favorability from certain one-time expenses detailed in the fourth quarter last year.

Inventory

Total inventories as of February 1, 2014, were $3.0 billion, compared with $3.0 billion at the end of the prior fiscal year. Consolidated inventories on a per-store basis at February 1, 2014, including the distribution centers, but excluding inventory in transit and the Company’s e-commerce businesses, were down 8 percent on a reported basis (down 7 percent on a constant currency basis). The Company enters the new fiscal year with extremely lean inventories and great liquidity, ready to buy into the abundant opportunities in the marketplace and continue shipping fresh spring merchandise to its stores.

Full Year and First Quarter Fiscal 2015 Outlook

For the fiscal year ending January 31, 2015, the Company expects diluted earnings per share to be in the range of $3.05 to $3.19 versus $2.94 in Fiscal 2014. Excluding the $.11 tax benefit in Fiscal 2014 referred to above, this guidance would represent an 8 percent to 13 percent increase over the adjusted $2.83 in Fiscal 2014. This outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

For the first quarter of Fiscal 2015, the Company expects diluted earnings per share to be in the range of $.65 to $.66, which would represent a 5 percent to 6 percent increase over last year’s $.62 per share. This guidance assumes an estimated $.01 per share negative impact from foreign currency exchange rates. This outlook is based upon estimated consolidated comparable store sales growth of 1 percent to 2 percent.

The Company’s earnings guidance for the first quarter and full year Fiscal 2015 assumes that currency exchange rates will remain unchanged from current levels.

Stores by Concept

During the fiscal year ended February 1, 2014, the Company increased its store count by a net of 169 stores to end the year with 3,219 stores. The Company increased square footage by 5 percent over the same period last year.