FRAMINGHAM, Mass. — A shaky economy, but a “solid” performance nonetheless.

That’s how TJX president and chief executive Edmond English characterized the company’s year at the annual shareholders meeting Tuesday at headquarters here.

“Despite tremendous promotional pressure brought on by sluggish sales at department and specialty stores, we’ve held our merchandise margins strong,” he said, adding Marmaxx margins have been stable for four years.

TJX rang up $12 billion in sales in fiscal 2003, a 12 percent lift over the prior year. The company also managed a 3 percent aggregate comparable-store sales gain across its seven divisions.

Its domestic apparel divisions —Marmaxx and moderate chain A.J. Wright — struggled, while its smaller home concepts and international operations beat profit and growth expectations.

A.J. Wright faltered during the second half of the year, knocked off balance byunseasonable weather and aggressive rollout plans that nearly doubled the store base, he said. Although revenues grew 76 percent to $277 million, the 75-unit division lost $12.6 million.

“It was a moment in time, but we caught it quickly,” English said, adding that the schedule to add 25 doors this year is better balanced.

Overall, he is optimistic about prospects for the chain, which discounts moderate brands and attracts urban families the company did not reach previously.

“That demographic is huge,” English noted, estimating it could ultimately be a 1,000-store concept.Sales are tracking at $200 a square foot, with new stores hitting $225 a square foot. He showed a new A.J. Wright TV commercial featuring in-store customer testimonials done in “homemade” production quality. It stood in sharp contrast to the company’s slicker spots for T.J. Maxx and Marshalls.

Escalating payroll, insurance and benefits costs hit Marmaxx’s bottom line. The division, encompassing 1,843 Marshalls and T.J. Maxx stores, saw profits ebb to $888 million last year from $894 million in 2001. Sales rose 7 percent to $9.5 billion. The trend continued into the first quarter, with sales climbing 4.6 percent, but net income falling 22.8 percent.

Sales per square foot for Marshalls and T.J. Maxx hover around $240.English said Marshalls and T.J. Maxx’s sites in centrally located strip malls,rather than in big box centers, have been a key advantage in acquiring new customers.

“We believe we have not fully understood the benefit of our stores being in customers’ neighborhoods,” he said. “It seems people like staying close to home in uncertain times.”

The firm will continue to open Marshalls and T.J. Maxx stores at roughly the same pace, with 79 doors set for this year compared with 73 added in fiscal 2003.

It is focusing on U.K. suburbs in its expansion of T.K. Maxx, the corresponding European division. Sales rose by 38 percent to $720 million, netting the company $43 million in profit.

Domestically, English said the company works to distinguish the Marshalls and T.J. Maxx concepts, although customers heavily cross-shop both.

T.J. Maxx, for example, has a stronger women’s business, carrying more women’s apparel, footwear and fine jewelry. Marshalls, by contrast, has a stronger men’s business and carries footwear for the whole family.

TJX executives applauded David Margolis, the retiring president of Canadian off-price chain Winners acquired by TJX in the early Nineties. Michael McMillan, currently executive vice president of merchandise and planning, will step into the position when Margolis leaves at the end of June.

Winners revenues grew 20 percent, to $793 million. The chain also squeezed more profit out of its top line, raising its net 44 percent to $85 million. The chain is slated to add 13 units this year.

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