TJX PROFITS DECLINE, BUT ABOVE FORECAST
NEW YORK — TJX Cos. posted fourth-quarter profits 2 cents ahead of reduced expectations, and said it would push ahead with an increased retail expansion plan in the year ahead.
Net income for the quarter dropped 1.3 percent, to $135.2 million, or 48 cents a diluted share, from $137 million, or 44 cents, a year ago.
Wall Street had expected earnings per share of 46 cents since the company revised earnings guidance downward when its December comparable-store sales came in below plan at 1 percent.
Edmond English, president and chief executive officer, described results for the year as “solid” in a statement, but acknowledged “we did not achieve our sales and profit objectives.”
Shares of the Framingham, Mass.-based off-pricer, the largest retailer of its type in the country, took a mild beating when the results were announced last week, trading down $1.26 to close at $30.58 on the New York Stock Exchange. Tuesday, they closed up 9 cents to $30.89.
Sales for the period ended Jan. 27 were up 8.9 percent, to $2.75 billion compared to $2.53 billion a year ago.
In contrast to the slight drop for the quarter, comparisons for full-year earnings were ahead. For 2000, net income rose 3.1 percent, to $538.1 million, or $1.86 a diluted share, from $521.7 million, or $1.64, a year ago.
Sales rose 8.9 percent, to $9.58 billion from $8.8 billion in 1999.
The Marmaxx Group, the company’s designation for the T.J. Maxx and Marshalls businesses, posted a 2 percent increase in comps in 2000, below its goal of 3 percent growth. However, the firm said that prudent inventory management, which pumped up margins, combined with trimmed-down expenses to partially offset the lower-than-expected sales.
Strength in the division led to the firm to increase expansion plans to 75 new stores in 2001, 15 more than the 60 new doors previously planned.
The firm currently operates 661 T.J. Maxx and 535 Marshalls locations domestically.
Winners apparel stores in Canada, which is currently 117 units strong, produced above-plan results for the year with an 8 percent rise in comps. Operating income for the division also surpassed expectations and the firm said it will add 13 percent to its store base, or 15 new stores, in 2001.
TJX’s smaller European operation, T.K. Maxx, also posted an 8 percent increase in comps for the year. Operating income in the U.K. and Ireland doubled from a year ago to slightly more than $20 million. While closing its three stores in the Netherlands, the company said it plans 27 new stores in the U.K. and Ireland in 2001.
“Although we are exiting the Netherlands, with our valuable learning experiences from both operational and merchandising perspectives, we continue to see continental Europe as a viable growth opportunity for T.K. Maxx,” noted the statement.
The company now operates 74 doors in Europe.
“With widespread favorable customer response to our off-price concepts, we will be investing heavily in our store-opening program and our distribution capacity,” said English.
“Ultimately,” added the ceo, the “domestic and international markets could support more than 4,000 stores from our existing concepts.”
TJX has made a number of senior management changes in the past month. As reported, Carol Meyrowitz was promoted to president of Marmaxx in late January, with Ernie Herrman advancing to executive vice president of merchandising for the division. Last month, Alex Smith was promoted to executive vice president and group executive of international operations, and Paul Sweetenham succeeded Smith as president of T.K. Maxx.