NEW YORK -- TJX Cos. ended a break-even year with double-digit increases in fourth-quarter sales and profits.
Net income for the quarter ended Jan. 26 jumped 14.9 percent to $155.3 million, or 56 cents a diluted share, compared with year-ago profits of $135.2 million, or 48 cents. Earnings per share met Wall Street's expectations.
Sales for the quarter inflated slightly faster than earnings with a 16.6 percent uptick to $3.21 billion from $2.75 billion a year ago. Consolidated comparable-store sales increased 6 percent.
"The tragedies of Sept. 11, coupled with a downturn in consumer confidence and a slumping economy, made 2001 a very difficult year for everyone," noted Edmond English, president and chief executive, in a statement.
Lazard Freres equity analyst Todd Slater described the quarter as "fundamentally superior." Investors pushed up shares of the firm $2.47, or 7.1 percent, to close at $37.45 on the New York Stock Exchange Wednesday.
The stock has been deflated since TJX, on Feb. 7, said its shrinkage had increased for the year. At the time, English noted, "Preliminary results from our routine end-of-year physical inventory procedure indicate inventory shortage coming in higher than anticipated, returning to the historic levels which we last experienced in the mid-Nineties." The revelation caused shares of TJX to drop 7.4 percent to $37.
Slater estimated shrinkage increased by 20 basis points in 2001 over the previous year, which he said was "not that uncommon, particularly in an economically difficult year." He added he considers shrinkage "an issue that will disappear over time."
During the quarter, comps for the Marmaxx Group, which includes T.J. Maxx and Marshalls, gained 6 percent, while strong merchandise margins led to a 23 percent increase in the segment's operating profits. Winners, the firm's Canadian chain, saw a 15 percent local currency comp increase.
For the year, overall earnings dropped 7 percent to $500.4 million, or $1.80 a diluted share, from $538.1 million, or $1.86, last year. Fiscal 2002 included a $40 million, or 14 cent, aftertax charge for contingent lease liabilities associated with the discontinued House2Home operation. Profits inched up 0.4 percent without the charge.Sales advanced 11.8 percent to $10.71 billion from $9.58 billion a year ago.
English noted, "We enter the new year with great momentum," which he attributed partially to "the fact that our business is considerably more nimble than most retail operators, which enables us to adapt quickly to changes in the retail environment."
For fiscal 2003, TJX is looking for earnings per share of $2.15 to $2.30, as much as 19 percent above this year excluding charges. Sales are projected to top $12 billion, a 12 percent increase.
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