10-QPeriod: Q2 FY2001

TJX COMPANIES INC /DE/ Quarterly Report for Q2 Ended Jul 29, 2000

Filed September 11, 2000For Securities:TJX

Summary

The TJX Companies, Inc. reported solid revenue growth for the thirteen and twenty-six weeks ended July 29, 2000, with net sales increasing by 7% and 8%, respectively, compared to the prior year periods. This growth was driven by a combination of increased same-store sales and new store openings across its various banners, although consolidated same-store sales saw modest increases of 1% and 2% for the respective periods. The company experienced a slight decrease in net income for the thirteen-week period, but an increase for the twenty-six week period before a one-time accounting charge in the prior year. Profitability metrics, such as operating margin, showed a slight decline year-over-year, impacted by increased selling, general, and administrative expenses, particularly store payroll costs. However, the company continues to demonstrate strong inventory management and is actively pursuing strategic financial initiatives, including significant stock repurchases and securing additional credit facilities to support its operations and shareholder returns.

Key Highlights

  • 1Net sales increased by 7% to $2.26 billion for the thirteen weeks ended July 29, 2000, and by 8% to $4.37 billion for the twenty-six weeks ended July 29, 2000, compared to the prior year.
  • 2Consolidated same-store sales showed modest growth of 1% for the thirteen-week period and 2% for the twenty-six week period.
  • 3Net income for the thirteen weeks ended July 29, 2000, was $114.0 million, a slight decrease from $115.9 million in the prior year. For the twenty-six weeks, net income was $244.6 million, an increase from $233.0 million in the prior year (after a restatement for an accounting change).
  • 4Selling, general, and administrative expenses as a percentage of net sales increased slightly due to higher store payroll costs and moderated sales growth.
  • 5The company actively repurchased shares, completing a $750 million program and announcing an intention to repurchase an additional $1 billion, spending $346.7 million on repurchases in the first six months of the fiscal year.
  • 6TJX secured an additional $250 million revolving credit facility, bringing total revolving credit capacity to $750 million, to support general corporate purposes including its stock repurchase program.
  • 7The 'Off-price family apparel stores' segment, primarily Marmaxx, remains the largest contributor to sales and operating income, though its operating margin saw a slight decrease.

Frequently Asked Questions

For the thirteen weeks ended July 29, 2000, net sales increased by 7% to $2.26 billion. For the twenty-six weeks ended July 29, 2000, net sales rose by 8% to $4.37 billion, compared to the same periods in the prior year. This growth was driven by a combination of increased same-store sales and new store openings.

The company adopted new accounting standards for layaway sales in fiscal year 2000, restating prior periods. For the twenty-six weeks ended July 31, 1999, there was a cumulative after-tax charge of $5.2 million related to this accounting change, which reduced net income for that period.

TJX has been actively repurchasing its common stock. The company completed a $750 million stock repurchase program and announced plans to repurchase an additional $1 billion over several years, spending $346.7 million on buybacks in the first six months of fiscal year 2000. Additionally, cash dividends declared per share increased to $0.08 for the twenty-six week period from $0.07 in the prior year.

The 'Off-price family apparel stores' segment, including Marmaxx (T.J. Maxx and Marshalls), continued to be the largest segment by sales and operating income. While Marmaxx's sales grew, its operating margin saw a slight decrease. The 'Off-price home fashion stores' segment, including HomeGoods, showed significant sales growth, and its operating loss narrowed compared to the prior year.