TJX, DRESS BARN, WABAN POST SOLID 4TH QUARTERS
NEW YORK — TJX Cos., Dress Barn and Waban reported strong fourth-quarter results Wednesday, as tighter inventory and cost controls lifted profits at all three chains. Off-pricers have been gaining ground as department stores try to limit their price promotions and sell more at full-price as consumers continue to seek brands at value prices.
TJX Cos., the 1,136-unit off pricer, reported fourth-quarter earnings rocketed to $209.5 million, or $2.32 a share, after a $125.6 million gain from the sale of its catalog operation. A year ago, the Framingham, Mass.-based chain netted $9.2 million, or 7 cents a share, with fewer shares outstanding.
The one-time, after-tax gain in the quarter resulted from sale of the Chadwick’s of Boston Catalog by TJX to Brylane LP. Total proceeds from the deal were about $300 million, including cash, a $20 million subordinated note and Chadwick’s credit card receivables.
Fourth-quarter operating earnings for TJX more than doubled to $52.3 million.
Profits at TJX ran up ninefold before the after-tax gain, boosted by T.J. Maxx and Marshalls. TJX acquired Marshalls in November 1995 for $606 million.
“We were able to reap many benefits from the Marshalls acquisition sooner than we expected, and the benefits were also greater than we forecast,” Bernard Cammarata, president and chief executive officer, said in a statement.
Sales for the three months ended Jan. 25 rose 18.8 percent to $1.9 billion.
Propelled by higher margins and lower costs, second-quarter profits at The Dress Barn Inc. more than tripled to $5.3 million, or 23 cents a share, swamping average Wall Street estimates of 16 cents a share. A year earlier, earnings came to $1.7 million, or 8 cents.
The Suffern, N.Y.-based off-price chain benefited from a mild winter in the East, where most of its 707 stores are located, Elliot S. Jaffe, chairman and ceo, said in a statement.
Jaffe noted that better controls on inventories and costs created “significant improvements” in gross margin for the quarter ended Jan. 25. “Our second-quarter sales and earnings were well above expectations,” Jaffe said. “This, together with our strong first-quarter earnings, has resulted in the most successful fall season in the company’s history.”
Sales rose 10.3 percent to $131.5 million from $119.1 million. Same-store sales moved up 5 percent.
Meanwhile, stronger sales of higher-margin goods along with more effective operating controls raised operating income at BJ’s Wholesale Club 19.2 percent to $47.2 million in the fourth quarter ended Jan. 25. BJ’s notched operating profits of $46.2 million in the prior-year period.
Sales at BJ’s gained 14.1 percent to $868.9 million, as same-store sales advanced 5.8 percent. In a statement, Herbert J. Zarkin, president and ceo, cited successful marketing and merchandising programs, which helped BJ’s achieve “consistent sales growth in existing clubs.”
However, Waban Inc., BJ’s parent, saw fourth-quarter income slide 1 percent to $25.5 million, or 71 cents a share. Sales climbed 9.5 percent, totaling $1.2 billion. Waban, based in Natick, Mass., operates 81 BJ’s and 84 HomeBase home improvement stores.
In addition, Waban said talks to combine HomeBase with Kmart’s Builders Square chain are ongoing. Leonard Green & Partners would acquire a controlling interest in the combined home improvement retailer.
Waban’s yearend net grew 5 percent to $76.7 million, or $2.15 a share, from $73 million, or $2.05 a share. Sales jumped 10 percent to $4.4 billion from $4 billion.
At TJX, full-year earnings soared to $363.1 million, or $4.01 a share, after the Chadwick’s gain, compared with $26.3 million, or 49 cents, including store closing charges. Year-ago results include charges of $35 million, stemming from the closing of some T.J. Maxx stores, the sale of Hit or Miss and an early retirement charge.
Sales surged 68.3 percent to $6.7 billion, reflecting the Marshalls acquisition. Same-store sales jumped 17 percent.
Apparel operating earnings more than doubled to $463.4 million. Sales moved ahead more than twofold as well, totaling $6.6 billion.