- Q4 net sales increased a strong 6% to
$9.5 billion, over last year’s 8% increase
- Q4 diluted EPS of $1.03 compared with
$.99 in the prior year
- FY17 net sales increased a strong 7% to
$33.2 billion, over last year’s 6% increase
- FY17 diluted EPS of $3.46 compared with
$3.33 in the prior year
- FY17 adjusted diluted EPS of $3.53,
which excludes the negative impact of $.07 from a third quarter
debt extinguishment charge and a pension settlement charge
- Returned $2.4 billion to shareholders
in Fiscal 2017 through share repurchases and dividends
The TJX Companies, Inc. (NYSE: TJX), the leading off-price
retailer of apparel and home fashions in the U.S. and worldwide,
today announced sales and earnings results for the fourth quarter
and fiscal year ended January 28, 2017. Net sales for the fourth
quarter of Fiscal 2017 increased 6% to $9.5 billion, over an 8%
increase last year. Consolidated comparable store sales for the
fourth quarter increased 3%, over last year’s 6% increase. Net
income for the fourth quarter was $678 million and diluted earnings
per share were $1.03, a 4% increase over the prior year’s $.99.
For the 52-week fiscal year ended January 28, 2017, net sales
were $33.2 billion, a 7% increase over last year’s 6% increase.
Consolidated comparable store sales increased a strong 5%, over
last year’s 5% increase. Net income for the fiscal year was $2.3
billion and diluted earnings per share were $3.46, a 4% increase
over last year’s $3.33. Excluding a third quarter debt
extinguishment charge and pension settlement charge, which combined
reduced earnings per share by $.07 per share, adjusted earnings per
share were $3.53, a 6% increase over the prior year’s $3.33.
Ernie Herrman, Chief Executive Officer and President of The TJX
Companies, Inc., stated, “The year 2016 was another terrific year
for TJX on top of many great years! We were proud to mark our
40-year milestone as a company and surpass $33 billion in sales!
Our consolidated comp sales increased a strong 5%, above our plan
and over 5% growth last year, and earnings per share growth
exceeded our expectations. We also delivered a 7% increase in net
sales, over a 6% increase last year. We were particularly pleased
that customer traffic was the primary driver of our comp increases
at every major division, which tells us that our eclectic
merchandise mix and amazing values continue to resonate with
consumers across our geographies. It was also great to see a strong
increase in our merchandise margin, over a very solid increase last
year. The year 2016 also marked our 21st consecutive year of comp
sales increases! We were also very pleased to end the year with
above-plan fourth quarter results. Our 3% consolidated comp store
sales increase and earnings per share of $1.03 both exceeded our
expectations. Once again, comp sales were driven by customer
traffic and our merchandise margin was up. Our fourth quarter and
full year results give us great confidence that we are growing our
customer base around the world and gaining market share across all
our divisions!”
Herrman continued, “Looking ahead, we see many opportunities to
continue our successful growth and are pursuing many initiatives to
keep driving shoppers to our stores. We are making strategic
investments in our infrastructure, stores, and new seeds to
strengthen our leadership positions and allow us to capture
additional market share in the U.S. and internationally. Our
management team is laser focused on achieving our 2017 plans and,
as always, passionate about surpassing them. We have a clear,
long-term vision for growth and are confident that we have the
right strategy, culture and people in place as we continue to grow
TJX as the only major international off-price retailer in the
world!”
Shareholder
Distributions
The Company intends to increase the regular quarterly dividend
on its common stock to be declared in April 2017 and payable in
June 2017 to $.3125 per share, subject to the approval of the
Company’s Board of Directors. This increase would represent a 20%
increase in the current per share dividend and mark the 21st
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%.
The Company also announced today its plan to repurchase
approximately $1.3 to $1.8 billion of TJX stock during the fiscal
year ending February 3, 2018. With $1.8 billion remaining at Fiscal
2017 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 $1.0 billion of TJX common stock from time to time. The
new authorization represents approximately 2% of the Company’s
outstanding shares at current prices. The new stock repurchase
program marks the 18th program approved by the Board since 1997.
Over this period, the Company has spent approximately $18.0 billion
on the repurchase of TJX stock. During the fourth quarter, the
Company spent a total of $525 million to repurchase TJX stock,
retiring 6.9 million shares. In Fiscal 2017, the Company spent a
total of $1.7 billion to repurchase TJX stock, retiring 22.3
million shares. Under the Company’s repurchase plans, share
repurchases may be made from time to time in market or private
transactions and may include derivative transactions. The
repurchase program announced today has no time limit and may be
suspended or discontinued at any time.
Ernie Herrman commented, “Our business continues to generate
tremendous amounts of cash and deliver strong financial returns. In
Fiscal 2018, we plan to continue investing to support our growth
while distributing cash to our shareholders. Our capital spending
plans include investing in new stores, store remodels, and our
supply chain and infrastructure. Simultaneously, we plan to
significantly increase our regular quarterly dividend and continue
our share buyback program. All of these actions underscore our
confidence in our ability to continue delivering strong, profitable
sales across all of our major divisions and cash flow that enables
us to both fund our continued growth and return value to our
shareholders.”
Sales by Business
Segment
The Company’s comparable store sales and net sales by division,
in the fourth quarter, were as follows:
Fourth Quarter Fourth
Quarter Comparable Store Sales1,2
Net
Sales ($ in millions)3,4 FY2017
FY2016 FY2017 FY2016
Marmaxx (U.S.)5,6
+3% +6% $6,029
$5,720 HomeGoods (U.S.) +5% +7%
$1,329 $1,180 TJX Canada
+4% +14% $873 $781
TJX International (Europe & Australia) +2%
+1% $1,236 $1,280
TJX +3%
+6% $9,468 $8,962
1Comparable store sales outside the U.S. calculated on a
constant currency basis, which removes the effect of changes in
currency exchange rates. 2Comparable store sales exclude Sierra
Trading Post, tjmaxx.com, tkmaxx.com and Trade Secret sales. 3Net
sales in Canada, Europe and Australia include the impact of foreign
currency exchange rates. See below. 4Figures may not foot due to
rounding. 5Combination of T.J. Maxx and Marshalls. 6Net sales
include Sierra Trading Post.
Sales by Business Segment
(continued)
The Company’s comparable store sales and net sales by division
for the full year were as follows:
Full Year Full
Year Comparable Store Sales1,2
Net
Sales ($ in millions)3,4 FY2017
FY2016 FY2017 FY2016
Marmaxx (U.S.)5,6
+5% +4% $21,246
$19,948 HomeGoods (U.S.) +6% +8%
$4,405 $3,915 TJX Canada
+8% +12% $3,171
$2,855 TJX International (Europe & Australia)7
+2% +4% $4,362
$4,227
TJX
+5% +5% $33,184
$30,945
1Comparable store sales outside the U.S. calculated on a
constant currency basis, which removes the effect of changes in
currency exchange rates. 2Comparable store sales exclude Sierra
Trading Post, tjmaxx.com, tkmaxx.com, and Trade Secret sales. 3Net
sales in Canada, Europe and Australia include the impact of foreign
currency exchange rates. See below. 4Figures may not foot due to
rounding. 5Combination of T.J. Maxx and Marshalls. 6Net sales
include Sierra Trading Post. 7FY2016 net sales include Trade Secret
since the acquisition on October 24, 2015.
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 can have a material effect on the magnitude
of these translations and adjustments when there is significant
volatility in currency exchange rates.
The movement in foreign currency exchange rates had a one
percentage point negative impact on consolidated net sales growth
in the fourth quarter of Fiscal 2017 versus the prior year. The
overall net impact of foreign currency exchange rates had a $.04
negative impact on fourth quarter Fiscal 2017 earnings per share,
compared with a $.02 positive impact last year.
The movement in foreign currency exchange rates had a two
percentage point negative impact on consolidated net sales growth
for the full Fiscal 2017 year versus the prior year. The overall
net impact of foreign currency exchange rates had a $.07 negative
impact on full year Fiscal 2017 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.
The foreign currency exchange rate impact to earnings per share
does not include the impact currency exchange rates have on various
transactions, which we refer to as “transactional foreign
exchange.”
Margins
For the fourth quarter of Fiscal 2017, the Company’s
consolidated pretax profit margin was 11.6%, a 0.3 percentage point
decrease compared with the prior year.
Gross profit margin for the fourth quarter of Fiscal 2017 was
28.3%, down 0.4 percentage points versus the prior year.
Merchandise margin was up significantly, but was more than offset
due to losses related to the Company’s inventory hedges as well as
incremental supply chain costs versus last year. Selling, general
and administrative costs as a percent of sales were 16.7%, flat
versus the prior year’s ratio.
For the full year Fiscal 2017, the Company’s consolidated pretax
profit margin was 11.2%. The third quarter debt extinguishment
charge and pension settlement charge reduced consolidated pretax
profit margin by 0.3 percentage points. Excluding these charges,
adjusted consolidated pretax profit margin was 11.5%, a 0.3
percentage point decrease compared with the prior year’s 11.8%.
Gross profit margin for Fiscal 2017 was 29.0%, up 0.2 percentage
points versus the prior year, and merchandise margin increased
significantly. Selling, general and administrative costs as a
percent of sales were 17.4%, up 0.6 percentage points versus the
prior year’s ratio, primarily due to wage increases and investments
to support growth.
Inventory
Total inventories as of January 28, 2017, were $3.6 billion,
compared with $3.7 billion at the end of the prior fiscal year.
Consolidated inventories on a per-store basis as of January 28,
2017, including the distribution centers, but excluding inventory
in transit and the Company’s e-commerce businesses, were down 5% on
a reported basis (down 4% on a constant currency basis). The
Company enters the new fiscal year in an excellent inventory
position and is set up well to continue shipping fresh, spring
merchandise to its stores and take advantage of the plentiful
opportunities it is seeing in the marketplace.
Full Year and First Quarter Fiscal 2018
Outlook
For the 53-week fiscal year ending February 3, 2018, the Company
expects diluted earnings per share to be in the range of $3.80 to
$3.89, which represents a 10% to 12% increase over the prior year’s
$3.46. The Company’s full-year guidance includes an expected
benefit of approximately $.11 per share from the 53rd week in the
Company’s Fiscal 2018 calendar. Excluding this benefit, the Company
expects adjusted diluted earnings per share to be in the range of
$3.69 to $3.78. This would represent a 5% to 7% increase over the
prior year’s adjusted $3.53, which excludes the combined $.07
impact of the debt extinguishment charge and pension settlement
charge (mentioned above). This guidance reflects an assumption that
wage increases will negatively impact EPS growth by 2%. The Company
also anticipates that the recent change in accounting rules for
share-based compensation will positively impact EPS growth by 2%.
This EPS outlook is based upon estimated consolidated comparable
store sales growth of 1% to 2%.
For the first quarter of Fiscal 2018, the Company expects
diluted earnings per share to be in the range of $.76 to $.78,
compared to $.76 last year. This guidance reflects an assumption
that wage increases will negatively impact EPS growth by 3%. The
Company also anticipates that the combination of foreign currency
and transactional foreign exchange will positively impact EPS
growth by 6% and the recent change in accounting rules for
share-based compensation will positively impact EPS growth by an
additional 1%. This EPS outlook is based upon estimated
consolidated comparable store sales growth of 0% to 1% versus last
year’s 7% increase.
The Company’s earnings guidance for the full year and first
quarter Fiscal 2018 assumes that currency exchange rates will
remain unchanged from the levels at the beginning of the first
quarter.
Stores by Concept
During the fiscal year ended January 28, 2017, the Company
increased its store count by 198 stores. The Company increased
square footage by 4% over the same period last year.
Store Locations Gross
Square Feet* FY2017 FY2017
(in millions)
Beginning
End Beginning
End In the U.S.:
T.J. Maxx
1,156 1,186 32.9
33.5 Marshalls 1,007
1,035 30.4 31.0 HomeGoods
526 579 13.0
14.2 Sierra Trading Post 8
12 0.2 0.3
In Canada:
Winners 245
255 6.9 7.2 HomeSense
101 106 2.4
2.5 Marshalls 41 57
1.2 1.7
In Europe:
T.K. Maxx 456 503
13.8 15.0 HomeSense 39
44 0.8 0.9
In
Australia:
Trade Secret
35 35 0.8
0.8
TJX
3,614 3,812 102.6 106.9
*Square feet figures may not foot due to
rounding.
About The TJX Companies,
Inc.
The TJX Companies, Inc. is the leading off-price retailer of
apparel and home fashions in the U.S. and worldwide. As of January
28, 2017, the end of the Company’s fiscal year, the Company
operated a total of 3,812 stores in nine countries, the United
States, Canada, the United Kingdom, Ireland, Germany, Poland,
Austria, the Netherlands, and Australia, and three e-commerce
sites. These include 1,186 T.J. Maxx, 1,035 Marshalls, 579
HomeGoods and 12 Sierra Trading Post stores, as well as tjmaxx.com
and sierratradingpost.com in the United States; 255 Winners, 106
HomeSense, and 57 Marshalls stores in Canada; 503 T.K. Maxx and 44
HomeSense stores, as well as tkmaxx.com, in Europe; and 35 Trade
Secret stores in Australia. TJX’s press releases and financial
information are also available at tjx.com.
Fourth Quarter and Fiscal 2017 Earnings
Conference Call
At 11:00 a.m. ET today, Ernie Herrman, Chief Executive Officer
and President of TJX, will hold a conference call with stock
analysts to discuss the Company’s fourth quarter and full year
Fiscal 2017 results, operations, business trends, and plans for
Fiscal 2018. A real-time webcast of the call will be available to
the public at tjx.com. A replay of the call will also be available
by dialing (866) 367-5577 through Wednesday, March 1, 2017, or at
tjx.com.
Non-GAAP Financial
Information
The Company has used non-GAAP financial measures in this press
release. Adjusted financial measures refer to financial information
adjusted to exclude from financial measures prepared in accordance
with accounting principles generally accepted in the United States
(GAAP) items identified in this press release. The Company believes
that the presentation of adjusted financial results provides
additional information on comparisons between periods including
underlying trends of its business by excluding certain items that
affect overall comparability. Non-GAAP financial measures should be
considered in addition to, and not as an alternative for, the
Company’s reported results prepared in accordance with GAAP.
Important Information at
Website
Archived versions of the Company’s conference calls are
available in the Investors section of tjx.com after they are no
longer available by telephone as are reconciliations of non-GAAP
financial measures to GAAP financial measures and other financial
information. The Company routinely posts information that may be
important to investors in the Investors section at tjx.com. The
Company encourages investors to consult that section of its website
regularly.
Forward-looking
Statement
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: Various statements made in this release are
forward-looking and involve a number of risks and uncertainties.
All statements that address activities, events or developments that
we intend, expect or believe may occur in the future are
forward-looking statements. The following are some of the factors
that could cause actual results to differ materially from the
forward-looking statements: execution of buying strategy and
inventory management; operational and business expansion and
management of large size and scale; customer trends and
preferences; various marketing efforts; competition; personnel
recruitment, training and retention; labor costs and workforce
challenges; data security; information systems and new technology;
economic conditions and consumer spending; adverse or unseasonable
weather; serious disruptions or catastrophic events; disruptions in
the second half of the fiscal year; corporate and retail banner
reputation; quality, safety and other issues with merchandise;
expanding international operations; merchandise importing;
commodity availability and pricing; fluctuations in currency
exchange rates; fluctuations in quarterly operating results and
market expectations; mergers, acquisitions, or business investments
and divestitures, closings or business consolidations; compliance
with laws, regulations and orders and changes in laws, regulations
and applicable accounting standards; outcomes of litigation, legal
proceedings and other legal or regulatory matters; tax matters;
real estate activities; cash flow and other factors that may be
described in our filings with the Securities and Exchange
Commission. We do not undertake to publicly update or revise our
forward-looking statements even if experience or future changes
make it clear that any projected results expressed or implied in
such statements will not be realized.
The TJX Companies, Inc. and Consolidated
Subsidiaries
Financial Summary
(Unaudited)
(In Thousands Except Per Share
Amounts)
13 Weeks Ended 52 Weeks Ended
January 28,2017
January 30,2016
January 28,2017
January 30,2016
Net sales $ 9,467,647 $ 8,962,075 $
33,183,744 $ 30,944,938 Cost of sales, including buying and
occupancy costs 6,786,777 6,388,192 23,565,754 22,034,523 Selling,
general and administrative expenses 1,577,595 1,497,119 5,768,467
5,205,715 Loss on early extinguishment of debt - - 51,773 - Pension
settlement charge - - 31,173 - Interest expense, net 9,616
10,963 43,534 46,400 Income before
provision for income taxes 1,093,659 1,065,801 3,723,043 3,658,300
Provision for income taxes 415,731 399,335
1,424,809 1,380,642 Net income $ 677,928 $ 666,466 $
2,298,234 $ 2,277,658 Diluted earnings per share $ 1.03 $
0.99 $ 3.46 $ 3.33 Cash dividends declared per share $ 0.26
$ 0.21 $ 1.04 $ 0.84 Weighted average common shares –
diluted 657,386 674,676 664,432 683,251
The TJX Companies, Inc. and Consolidated
Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)
January 28,2017
January 30,2016
ASSETS Current assets: Cash and cash equivalents $ 2,929.8 $
2,095.5 Short-term investments 543.2 352.3 Accounts receivable and
other current assets 632.8 629.7 Merchandise inventories
3,645.0 3,695.1 Total current assets 7,750.8
6,772.6 Property, net of depreciation 4,483.0 4,137.6
Other assets 257.5 236.4 Goodwill and tradename, net of
amortization 342.6 343.8 TOTAL ASSETS $
12,833.9 $ 11,490.4 LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 2,230.9 $ 2,203.0 Accrued
expenses and other current liabilities 2,526.7
2,199.2 Total current liabilities 4,757.6
4,402.2 Other long-term liabilities 1,024.1 881.0
Non-current deferred income taxes, net 314.0 285.1 Long-term debt
2,227.6 1,615.0 Shareholders’ equity 4,510.6
4,307.1 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $
12,833.9 $ 11,490.4
The TJX Companies, Inc. and Consolidated
Subsidiaries
Condensed Statements of Cash Flows
(Unaudited)
(In Millions)
52 Weeks Ended
January 28,2017
January 30,2016
CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,298.2 $
2,277.7 Depreciation and amortization 658.8 616.7 Loss on early
extinguishment of debt 51.8 - Pension settlement charge 31.2 -
Deferred income tax (benefit) provision (5.5 ) 31.2 Share-based
compensation 102.3 94.1 (Increase) in accounts receivable and other
assets (32.8 ) (67.5 ) Decrease (increase) in merchandise
inventories 11.9 (506.6 ) Increase in accounts payable 48.2 216.3
Increase in accrued expenses and other liabilities 536.2 352.9
Other (98.4 ) (77.5 ) Net cash provided by
operating activities 3,601.9 2,937.3
CASH FLOWS FROM INVESTING ACTIVITIES: Property additions
(1,024.7 ) (889.4 ) Purchases of investments (717.0 ) (798.0 )
Sales and maturities of investments 529.1 681.4 Other (2.3 )
(57.0 ) Net cash (used in) investing activities
(1,214.9 ) (1,063.0 ) CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from issuance of long-term debt 992.5 -
Payments on early extinguishment of debt (425.6 ) - Payments for
repurchase of common stock (1,700.0 ) (1,828.3 ) Proceeds from
issuance of common stock 164.2 132.0 Cash dividends paid (651.0 )
(544.3 ) Other 58.0 64.7 Net cash (used
in) financing activities (1,561.9 ) (2,175.9 )
Effect of exchange rate changes on cash 9.2
(96.7 ) Net increase (decrease) in cash and cash equivalents
834.3 (398.3 ) Cash and cash equivalents at beginning of year
2,095.5 2,493.8 Cash and cash
equivalents at end of year $ 2,929.8 $ 2,095.5
The TJX Companies, Inc. and Consolidated
Subsidiaries
Selected Information by Major Business
Segment
(Unaudited)
(In Thousands)
13 Weeks Ended 52 Weeks Ended
January 28,2017
January 30,2016
January 28,2017
January 30,2016
Net sales: In the United States:
Marmaxx $ 6,028,846 $ 5,720,427 $ 21,246,034 $ 19,948,227 HomeGoods
1,329,135 1,179,806 4,404,607 3,915,221 TJX Canada 873,296 781,428
3,171,127 2,854,617 TJX International 1,236,370
1,280,414 4,361,976 4,226,873 Total net sales $
9,467,647 $ 8,962,075 $ 33,183,744 $ 30,944,938 Segment
profit: In the United States: Marmaxx $ 840,807 $ 812,588 $
2,995,045 $ 2,858,780 HomeGoods 197,782 181,334 613,778 549,318 TJX
Canada 91,475 97,301 413,417 375,306 TJX International
90,472 124,420 235,519 316,939 Total segment
profit 1,220,536 1,215,643 4,257,759 4,100,343 General
corporate expense 117,261 138,879 408,236 395,643 Loss on early
extinguishment of debt - - 51,773 - Pension settlement charge - -
31,173 - Interest expense, net 9,616 10,963
43,534 46,400 Income before provision for income taxes $
1,093,659 $ 1,065,801 $ 3,723,043 $ 3,658,300
The TJX Companies, Inc. and Consolidated
SubsidiariesNotes to Consolidated Condensed Statements
1. During the fourth quarter ended January 28, 2017 TJX
repurchased 6.9 million shares of its common stock at a cost of
$525 million. For the twelve months ended January 28, 2017, TJX
repurchased 22.3 million shares of its common stock at a cost of
$1.7 billion. TJX records the repurchase of its stock on a cash
basis, and the amounts reflected in the financial statements may
vary from the above amounts due to the timing of settlement of
repurchases.
2. On September 7, 2016 TJX issued $1.0 billion of 2.250% ten
year notes. The Company used a portion of the proceeds to redeem
its $375 million 6.950% notes prior to their scheduled maturity of
April 15, 2019. On October 12, 2016 the Company completed the
redemption of the 6.950% notes pursuant to the terms of the
indenture and recorded a pre-tax loss on the early extinguishment
of debt of $51.8 million in the third quarter ended October 29,
2016.
In addition, during the third quarter TJX offered eligible,
former TJX Associates, who had not yet commenced receiving their
pension benefit, an opportunity to receive a lump sum payout of
their vested pension benefit. On October 21, 2016 the Company’s
pension plan paid $103.7 million from pension plan assets to those
who accepted this offer, thereby reducing its pension benefit
obligations. The transaction had no cash impact on TJX but did
result in a non-cash pre-tax pension settlement charge of $31.2
million.
The company has presented non-GAAP measures in this earnings
release excluding the impact of these two third quarter
charges.
View source
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The TJX Companies, Inc.Media:Doreen Thompson(508)
390-2323orInvestors:Jeff Botte(508) 390-2323
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