e10vq
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
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þ |
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Quarterly Report under Section 13 and 15(d)
Of the Securities Exchange Act of 1934 |
For
Quarterly Period Ended July 29, 2006
Or
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o |
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Transition Report Pursuant to Section 13 and 15(d)
Of the Securities Exchange Act of 1934 |
Commission
file number 1-4908
The TJX Companies, Inc.
(Exact name of registrant as specified in its charter)
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DELAWARE
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04-2207613 |
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
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770 Cochituate Road
Framingham, Massachusetts
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01701 |
(Address of principal executive offices)
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(Zip Code) |
(508) 390-1000
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes þ No o.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or
a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule
12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ Accelerated filer o Non-accelerated filer o.
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act).
YES o NO þ.
The number of shares of Registrants common stock outstanding as of July 29, 2006: 449,499,006
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
(UNAUDITED)
AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
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Thirteen Weeks Ended |
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July 29, |
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July 30, |
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2006 |
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2005 |
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Net sales |
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$ |
3,988,232 |
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$ |
3,647,866 |
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Cost of sales, including buying and occupancy costs |
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3,054,467 |
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2,807,861 |
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Selling, general and administrative expenses |
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698,779 |
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652,143 |
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Interest expense, net |
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5,413 |
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7,917 |
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Income before provision for income taxes |
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229,573 |
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179,945 |
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Provision for income taxes |
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91,417 |
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69,131 |
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Net income |
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$ |
138,156 |
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$ |
110,814 |
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Earnings per share: |
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Net income: |
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Basic |
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$ |
0.31 |
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$ |
0.24 |
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Weighted average common shares basic |
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452,132 |
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|
467,206 |
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Diluted |
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$ |
0.29 |
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$ |
0.23 |
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Weighted average common shares diluted |
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477,485 |
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492,817 |
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Cash dividends declared per share |
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$ |
0.07 |
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$ |
0.06 |
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The accompanying notes are an integral part of the financial statements.
The period ended July 30, 2005 has been adjusted to reflect the effect of adopting SFAS 123(R). See note 3 to
consolidated interim financial statements.
2
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
(UNAUDITED)
AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
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Twenty-Six Weeks Ended |
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July 29, |
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July 30, |
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2006 |
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2005 |
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Net sales |
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$ |
7,884,715 |
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$ |
7,299,696 |
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Cost of sales, including buying and occupancy costs |
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5,997,250 |
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5,596,630 |
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Selling, general and administrative expenses |
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1,388,324 |
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1,289,388 |
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Interest expense, net |
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9,172 |
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13,953 |
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Income before provision for income taxes |
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489,969 |
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399,725 |
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Provision for income taxes |
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188,004 |
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153,330 |
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Net income |
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$ |
301,965 |
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$ |
246,395 |
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Earnings per share: |
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Net income: |
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Basic |
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$ |
0.66 |
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$ |
0.52 |
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Weighted average common shares basic |
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455,654 |
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472,055 |
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Diluted |
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$ |
0.63 |
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$ |
0.50 |
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Weighted average common shares diluted |
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481,438 |
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497,716 |
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Cash dividends declared per share |
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$ |
0.14 |
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$ |
0.12 |
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The accompanying notes are an integral part of the financial statements.
The period ended July 30, 2005 has been adjusted to reflect the effect of adopting SFAS 123(R). See note 3 to
consolidated interim financial statements.
3
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEETS
IN THOUSANDS, EXCEPT SHARE DATA
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July 29, |
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January 28, |
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July 30, |
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2006 |
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2006 |
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2005 |
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(unaudited) |
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(unaudited) |
ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
273,717 |
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$ |
465,649 |
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$ |
181,689 |
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Accounts receivable, net |
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119,482 |
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|
140,747 |
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120,932 |
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Merchandise inventories |
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2,923,434 |
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2,365,861 |
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2,814,691 |
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Prepaid expenses and other current assets |
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322,245 |
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158,624 |
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263,571 |
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Current deferred income taxes, net |
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13,938 |
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9,246 |
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|
3,160 |
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Total current assets |
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3,652,816 |
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3,140,127 |
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3,384,043 |
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Property at cost: |
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Land and buildings |
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259,899 |
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260,556 |
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262,278 |
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Leasehold costs and improvements |
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1,564,193 |
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1,493,747 |
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1,391,435 |
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Furniture, fixtures and equipment |
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2,280,490 |
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2,177,614 |
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2,032,502 |
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Total property at cost |
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4,104,582 |
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3,931,917 |
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3,686,215 |
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Less accumulated depreciation and amortization |
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2,105,731 |
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1,941,020 |
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1,808,792 |
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Net property at cost |
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1,998,851 |
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1,990,897 |
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1,877,423 |
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Property under capital lease, net of accumulated
amortization of $11,540; $10,423 and $9,306, respectively |
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21,032 |
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|
22,149 |
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|
23,266 |
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Non-current deferred income taxes, net |
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|
10,402 |
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|
|
6,395 |
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|
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Other assets |
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|
130,194 |
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|
|
153,312 |
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|
124,029 |
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Goodwill and tradename, net of amortization |
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|
183,217 |
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|
183,425 |
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|
183,548 |
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|
|
|
|
|
|
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|
TOTAL ASSETS |
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$ |
5,996,512 |
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|
$ |
5,496,305 |
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|
$ |
5,592,309 |
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LIABILITIES |
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Current liabilities: |
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Obligation under capital lease due within one year |
|
$ |
1,782 |
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|
$ |
1,712 |
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|
$ |
1,645 |
|
Short-term debt |
|
|
140,871 |
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|
|
|
|
|
|
414,498 |
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Accounts payable |
|
|
1,561,525 |
|
|
|
1,313,472 |
|
|
|
1,518,950 |
|
Accrued expenses and other liabilities |
|
|
1,043,224 |
|
|
|
936,667 |
|
|
|
913,454 |
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|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
2,747,402 |
|
|
|
2,251,851 |
|
|
|
2,848,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities |
|
|
562,011 |
|
|
|
544,650 |
|
|
|
485,711 |
|
Non-current deferred income taxes, net |
|
|
|
|
|
|
|
|
|
|
44,735 |
|
Obligation under capital lease, less portion due within one year |
|
|
23,327 |
|
|
|
24,236 |
|
|
|
25,109 |
|
Long-term debt, exclusive of current installments |
|
|
789,090 |
|
|
|
782,914 |
|
|
|
575,112 |
|
Commitments and contingencies |
|
|
|
|
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|
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SHAREHOLDERS EQUITY |
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|
Common stock, authorized 1,200,000,000 shares,
par value $1, issued and outstanding 449,499,006;
460,967,060 and 465,922,597, respectively |
|
|
449,499 |
|
|
|
460,967 |
|
|
|
465,923 |
|
Additional paid-in capital |
|
|
|
|
|
|
|
|
|
|
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|
Accumulated other comprehensive income (loss) |
|
|
(36,571 |
) |
|
|
(44,296 |
) |
|
|
(32,843 |
) |
Retained earnings |
|
|
1,461,754 |
|
|
|
1,475,983 |
|
|
|
1,180,015 |
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|
|
|
|
|
|
|
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Total shareholders equity |
|
|
1,874,682 |
|
|
|
1,892,654 |
|
|
|
1,613,095 |
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|
|
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TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
|
$ |
5,996,512 |
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$ |
5,496,305 |
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|
$ |
5,592,309 |
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|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the financial
statements.
The period ended July 30, 2005 has been adjusted to reflect the effect of adopting SFAS 123(R).
See note 3 to consolidated interim financial statements.
4
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
IN THOUSANDS
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|
|
|
Twenty-Six Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
301,965 |
|
|
$ |
246,395 |
|
Adjustments to reconcile net income to net cash
provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
172,542 |
|
|
|
156,653 |
|
Property disposals |
|
|
3,494 |
|
|
|
4,578 |
|
Deferred income tax provision |
|
|
(8,515 |
) |
|
|
(14,689 |
) |
Amortization
of stock compensation expense |
|
|
38,971 |
|
|
|
46,728 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable |
|
|
21,980 |
|
|
|
(2,044 |
) |
(Increase) in merchandise inventories |
|
|
(542,315 |
) |
|
|
(474,733 |
) |
(Increase) in prepaid expenses and other current assets |
|
|
(161,732 |
) |
|
|
(131,663 |
) |
Increase in accounts payable |
|
|
239,248 |
|
|
|
249,587 |
|
Increase in accrued expenses and other liabilities |
|
|
114,332 |
|
|
|
96,545 |
|
Other |
|
|
24,113 |
|
|
|
8,151 |
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
204,083 |
|
|
|
185,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Property additions |
|
|
(179,366 |
) |
|
|
(219,112 |
) |
Proceeds from repayments on note receivable |
|
|
343 |
|
|
|
320 |
|
|
|
|
|
|
|
|
Net cash (used in) investing activities |
|
|
(179,023 |
) |
|
|
(218,792 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from borrowings of short-term debt |
|
|
140,871 |
|
|
|
414,498 |
|
Payments on capital lease obligation |
|
|
(839 |
) |
|
|
(774 |
) |
Principal payments on long-term debt |
|
|
|
|
|
|
(99,995 |
) |
Cash payments for repurchase of common stock |
|
|
(375,013 |
) |
|
|
(383,346 |
) |
Proceeds from sale and issuance of common stock |
|
|
72,404 |
|
|
|
27,321 |
|
Cash dividends paid |
|
|
(59,677 |
) |
|
|
(49,857 |
) |
|
|
|
|
|
|
|
Net cash (used in) financing activities |
|
|
(222,254 |
) |
|
|
(92,153 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash |
|
|
5,262 |
|
|
|
(61 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) in cash and cash equivalents |
|
|
(191,932 |
) |
|
|
(125,498 |
) |
Cash and cash equivalents at beginning of year |
|
|
465,649 |
|
|
|
307,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
273,717 |
|
|
$ |
181,689 |
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the financial
statements.
The period ended July 30, 2005 has been adjusted to reflect the effect of adopting SFAS 123(R).
See note 3 to consolidated interim financial statements.
5
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. |
|
The results for the first six months are not necessarily indicative of results for the full
fiscal year, because TJXs business, in common with the businesses of retailers generally, is
subject to seasonal influences, with higher levels of sales and income generally realized in
the second half of the year. |
|
2. |
|
The consolidated interim financial statements are unaudited and, in the opinion of
management, reflect all normal recurring adjustments, the use of retail statistics, and
accruals and deferrals among periods required to match costs properly with the related revenue
or activity, considered necessary by TJX for a fair presentation of its financial statements
for the periods reported, all in accordance with generally accepted accounting principles and
practices consistently applied. The consolidated interim financial statements should be read
in conjunction with the audited consolidated financial statements, including notes thereto,
contained in TJXs Annual Report on Form 10-K for the year ended January 28, 2006. |
|
3. |
|
In the fourth quarter of fiscal 2006 TJX elected to early adopt the provisions of Statement
of Financial Accounting Standards No. 123(R) (SFAS No. 123(R)), Accounting for Stock Based
Compensation. This standard requires that the fair value of all stock-based awards be
reflected in the financial statements based on the fair value of the awards at the date of
grant. TJX has elected the modified retrospective transition method, and accordingly, all
prior periods have been adjusted to reflect the impact of this standard. |
|
|
|
Total stock-based compensation was $19.4 million and $22.6 million for the quarters ended July
29, 2006 and July 30, 2005, respectively, and $39.0 million and $46.7 million for the six months
ended July 29, 2006 and July 30, 2005, respectively. These amounts include stock option expense
as well as restricted stock amortization. TJX revised its general approach to long-term
compensation in fiscal 2006 by substantially decreasing the stock incentives awarded to
individuals and increasing their long-term cash incentive awards going forward. There were options
to purchase 1.5 million and 4.3 million shares of common stock exercised during the second
quarter and six months ended July 29, 2006, respectively. There were options to purchase 42.9
million shares of common stock outstanding as of July 29, 2006. |
|
4. |
|
TJXs cash payments for interest and income taxes are as follows: |
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended |
|
|
July 29, |
|
July 30, |
|
|
2006 |
|
2005 |
|
|
(in thousands) |
Cash paid for: |
|
|
|
|
|
|
|
|
Interest on debt |
|
$ |
15,648 |
|
|
$ |
14,317 |
|
Income taxes |
|
$ |
283,122 |
|
|
$ |
193,392 |
|
5. |
|
TJX has a reserve for potential future obligations of discontinued operations that relates
primarily to real estate leases of former TJX businesses. The reserve reflects TJXs estimate
of its costs for claims, updated quarterly, that have been, or are likely to be, made against
TJX for liability as an original lessee or guarantor of leases of these businesses, after
mitigation of the number and cost of lease obligations. At July 29, 2006, substantially all
leases of discontinued operations that were rejected in bankruptcy and for which the landlords
asserted liability against TJX had been resolved. Although TJXs actual costs with respect to
any of these leases may exceed amounts estimated in the reserve, and TJX may incur costs for
leases from these discontinued operations that were not terminated or had not expired, TJX
does not expect to incur any material costs related to discontinued operations in excess of
the reserve. The reserve balance was $15.8 million as of July 29, 2006 and $12.1 million as
of July 30, 2005. During the quarter ended April 29, 2006, TJX received a creditor recovery
of $1.6 million, offset by an equivalent addition to the reserve to reflect adjustments to the
reserve during the quarter. Any additional creditor recoveries, if any, are expected to be
immaterial. |
|
|
TJX may also be contingently liable on up to 16 leases of BJs Wholesale Club, Inc. for which
BJs Wholesale Club is primarily liable. TJXs reserve for discontinued operations does not
reflect these leases, because it believes that the likelihood of any future liability with
respect to these leases is remote due to the current financial condition of BJs Wholesale Club. |
6
6. |
|
TJXs comprehensive income for the second quarter and six months ended July 29, 2006 and
July 30, 2005 is presented below: |
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
138,156 |
|
|
$ |
110,814 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Gain (loss) due to foreign currency translation adjustments, net of
related tax effects |
|
|
9,680 |
|
|
|
(16,265 |
) |
Gain (loss) on hedge contracts, net of related tax effects |
|
|
(5,311 |
) |
|
|
12,089 |
|
Gain (loss) on cash flow hedge contracts, net of related tax effects |
|
|
1,788 |
|
|
|
(4,936 |
) |
Amount of cash flow hedges reclassified from other comprehensive
income to net income, net of related tax effects |
|
|
(1,608 |
) |
|
|
2,139 |
|
|
|
|
|
|
|
|
Comprehensive income |
|
$ |
142,705 |
|
|
$ |
103,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
301,965 |
|
|
$ |
246,395 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Gain (loss) due to foreign currency translation adjustments, net of
related tax effects |
|
|
10,313 |
|
|
|
(11,728 |
) |
Gain (loss) on hedge contracts, net of related tax effects |
|
|
(4,493 |
) |
|
|
8,742 |
|
Gain (loss) on cash flow hedge contracts, net of related tax effects |
|
|
(3,659 |
) |
|
|
(3,795 |
) |
Amount of cash flow hedges reclassified from other comprehensive
income to net income, net of related tax effects |
|
|
5,564 |
|
|
|
183 |
|
|
|
|
|
|
|
|
Comprehensive income |
|
$ |
309,690 |
|
|
$ |
239,797 |
|
|
|
|
|
|
|
|
7
7. |
|
The computation of TJXs basic and diluted earnings per share is as follows: |
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
Basic earnings per share |
|
|
|
|
|
|
|
|
Net income |
|
$ |
138,156 |
|
|
$ |
110,814 |
|
Average common shares outstanding for basic EPS |
|
|
452,132 |
|
|
|
467,206 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.31 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
Net income |
|
$ |
138,156 |
|
|
$ |
110,814 |
|
Add back: Interest expense on zero coupon convertible
subordinated notes, net of income taxes |
|
|
1,152 |
|
|
|
1,129 |
|
|
|
|
|
|
|
|
Net income used for diluted earnings per share calculation |
|
$ |
139,308 |
|
|
$ |
111,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares for basic and diluted earnings per share calculations: |
|
|
|
|
|
|
|
|
Average common shares outstanding for basic EPS |
|
|
452,132 |
|
|
|
467,206 |
|
Dilutive effect of stock options and awards |
|
|
8,448 |
|
|
|
8,706 |
|
Dilutive effect of zero coupon convertible subordinated notes |
|
|
16,905 |
|
|
|
16,905 |
|
|
|
|
|
|
|
|
Average common shares outstanding for diluted EPS |
|
|
477,485 |
|
|
|
492,817 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.29 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
Basic earnings per share |
|
|
|
|
|
|
|
|
Net income |
|
$ |
301,965 |
|
|
$ |
246,395 |
|
Average common shares outstanding for basic EPS |
|
|
455,654 |
|
|
|
472,055 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.66 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
Net income |
|
$ |
301,965 |
|
|
$ |
246,395 |
|
Add back: Interest expense on zero coupon convertible
subordinated notes, net of income taxes |
|
|
2,300 |
|
|
|
2,255 |
|
|
|
|
|
|
|
|
Net income used for diluted earnings per share calculation |
|
$ |
304,265 |
|
|
$ |
248,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares for basic and diluted earnings per share calculations: |
|
|
|
|
|
|
|
|
Average common shares outstanding for basic EPS |
|
|
455,654 |
|
|
|
472,055 |
|
Dilutive effect of stock options and awards |
|
|
8,879 |
|
|
|
8,756 |
|
Dilutive effect of zero coupon convertible subordinated notes |
|
|
16,905 |
|
|
|
16,905 |
|
|
|
|
|
|
|
|
Average common shares outstanding for diluted EPS |
|
|
481,438 |
|
|
|
497,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.63 |
|
|
$ |
0.50 |
|
|
|
The weighted average common shares for the diluted earnings per share calculation exclude the
incremental effect related to outstanding stock options for which the exercise price of the
option is in excess of the related periods average price of TJXs common stock. There were
options to purchase 7,956 shares excluded for the thirteen weeks and twenty-six weeks ended July
29, 2006 and options to purchase 10,000 shares excluded for the thirteen weeks and twenty-six
weeks ended July 30, 2005. The 16.9 million shares attributable to the zero |
8
|
|
coupon convertible subordinated notes are reflected in the diluted earnings per share
calculation in all periods presented in accordance with Emerging Issues Task Force Issue No.
04-08, The Effect of Contingently Convertible Debt on Diluted Earnings per Share. This
accounting change was implemented in the fourth quarter ended January 29, 2005 and was applied
retroactively. |
8. |
|
During the second quarter ended July 29, 2006, TJX repurchased and retired 8.7 million shares
of its common stock at a cost of $203.5 million. For the six months ended July 29, 2006, TJX
repurchased and retired 15.9 million shares of its common stock at a cost of $380.5 million.
TJX reflects stock repurchases in its financial statements on a settlement basis which
amounted to $375.0 million for the six months ended July 29, 2006, compared to $383.3 million
for the same period last year. Since the inception of the current $1 billion stock repurchase
program through July 29, 2006, TJX had repurchased 16.1 million shares at a total cost of
$387.1 million. |
9. |
|
TJX evaluates the performance of its segments based on segment profit or loss, which TJX
defines as pre-tax income before general corporate expense and interest. Segment profit or
loss as defined by TJX may not be comparable to similarly titled measures used by other
entities. In addition, this measure of performance should not be considered an alternative to
net income or cash flows from operating activities as an indicator of TJXs performance or as
a measure of liquidity. Presented below is financial information on TJXs business segments: |
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
Net sales: |
|
|
|
|
|
|
|
|
Marmaxx |
|
$ |
2,658,503 |
|
|
$ |
2,537,311 |
|
Winners and HomeSense |
|
|
400,536 |
|
|
|
316,842 |
|
T.K. Maxx |
|
|
405,440 |
|
|
|
327,540 |
|
HomeGoods |
|
|
301,347 |
|
|
|
259,116 |
|
A.J. Wright |
|
|
158,065 |
|
|
|
147,251 |
|
Bobs Stores |
|
|
64,341 |
|
|
|
59,806 |
|
|
|
|
|
|
|
|
|
|
$ |
3,988,232 |
|
|
$ |
3,647,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss): |
|
|
|
|
|
|
|
|
Marmaxx |
|
|
208,265 |
|
|
|
202,295 |
|
Winners and HomeSense |
|
|
41,477 |
|
|
|
18,563 |
|
T.K. Maxx |
|
|
17,971 |
|
|
|
9,023 |
|
HomeGoods |
|
|
4,198 |
|
|
|
(4,739 |
) |
A.J. Wright |
|
|
(5,041 |
) |
|
|
(2,709 |
) |
Bobs Stores |
|
|
(4,037 |
) |
|
|
(9,155 |
) |
|
|
|
|
|
|
|
|
|
|
262,833 |
|
|
|
213,278 |
|
|
|
|
|
|
|
|
|
|
General corporate expenses |
|
|
27,847 |
|
|
|
25,416 |
|
Interest expense, net |
|
|
5,413 |
|
|
|
7,917 |
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
$ |
229,573 |
|
|
$ |
179,945 |
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
Net sales: |
|
|
|
|
|
|
|
|
Marmaxx |
|
$ |
5,305,205 |
|
|
$ |
5,100,897 |
|
Winners and HomeSense |
|
|
769,346 |
|
|
|
629,939 |
|
T.K. Maxx |
|
|
754,760 |
|
|
|
645,246 |
|
HomeGoods |
|
|
607,179 |
|
|
|
517,743 |
|
A.J. Wright |
|
|
320,546 |
|
|
|
286,622 |
|
Bobs Stores |
|
|
127,679 |
|
|
|
119,249 |
|
|
|
|
|
|
|
|
|
|
$ |
7,884,715 |
|
|
$ |
7,299,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss): |
|
|
|
|
|
|
|
|
Marmaxx |
|
|
477,784 |
|
|
|
459,780 |
|
Winners and HomeSense |
|
|
69,563 |
|
|
|
28,455 |
|
T.K. Maxx |
|
|
17,770 |
|
|
|
6,787 |
|
HomeGoods |
|
|
12,732 |
|
|
|
(5,405 |
) |
A.J. Wright |
|
|
(7,956 |
) |
|
|
(6,882 |
) |
Bobs Stores |
|
|
(10,266 |
) |
|
|
(16,141 |
) |
|
|
|
|
|
|
|
|
|
|
559,627 |
|
|
|
466,594 |
|
|
|
|
|
|
|
|
|
|
General corporate expenses |
|
|
60,486 |
|
|
|
52,916 |
|
Interest expense, net |
|
|
9,172 |
|
|
|
13,953 |
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
$ |
489,969 |
|
|
$ |
399,725 |
|
|
|
|
|
|
|
|
10. |
|
The following represents the net periodic pension and postretirement benefit costs and
related components for the thirteen weeks ended July 29, 2006 and July 30, 2005: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension |
|
|
Pension |
|
|
|
(Funded Plan) |
|
|
(Unfunded Plan) |
|
|
|
July 29, |
|
|
July 30, |
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
Service cost |
|
$ |
9,678 |
|
|
$ |
8,113 |
|
|
$ |
305 |
|
|
$ |
380 |
|
Interest cost |
|
|
5,527 |
|
|
|
4,806 |
|
|
|
633 |
|
|
|
717 |
|
Expected return on plan assets |
|
|
(7,248 |
) |
|
|
(6,269 |
) |
|
|
|
|
|
|
|
|
Amortization of transition related obligation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 |
|
Amortization of prior service cost |
|
|
14 |
|
|
|
14 |
|
|
|
119 |
|
|
|
90 |
|
Recognized actuarial losses |
|
|
1,657 |
|
|
|
1,567 |
|
|
|
327 |
|
|
|
368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expense |
|
$ |
9,628 |
|
|
$ |
8,231 |
|
|
$ |
1,384 |
|
|
$ |
1,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
The following represents the net periodic pension and postretirement benefit costs and related
components for the twenty-six weeks ended July 29, 2006 and July 30, 2005:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension |
|
|
Pension |
|
|
|
(Funded Plan) |
|
|
(Unfunded Plan) |
|
|
|
July 29, |
|
|
July 30, |
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
Service cost |
|
$ |
19,356 |
|
|
$ |
16,225 |
|
|
$ |
610 |
|
|
$ |
760 |
|
Interest cost |
|
|
11,054 |
|
|
|
9,611 |
|
|
|
1,267 |
|
|
|
1,433 |
|
Expected return on plan assets |
|
|
(14,496 |
) |
|
|
(12,538 |
) |
|
|
|
|
|
|
|
|
Amortization of transition related obligation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37 |
|
Amortization of prior service cost |
|
|
28 |
|
|
|
29 |
|
|
|
238 |
|
|
|
180 |
|
Recognized actuarial losses |
|
|
3,314 |
|
|
|
3,134 |
|
|
|
654 |
|
|
|
738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expense |
|
$ |
19,256 |
|
|
$ |
16,461 |
|
|
$ |
2,769 |
|
|
$ |
3,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TJX made voluntary funding contributions to its funded pension plan in the fiscal years ended in
January 2006 and 2005. TJX does not anticipate any required funding for its current fiscal
year. |
|
|
Effective January 1, 2006, TJX amended its postretirement medical plan to eliminate all plan
benefits for anyone retiring after January 1, 2006. For retirees enrolled in the plan as of
that date and who enroll in Medicare Part D within specified timeframes, the amended plan
provides a $35.00 monthly benefit, which is intended to cover the cost of the retirees monthly
premium payment for Medicare coverage. The reduction in the liability related to this plan
amendment is amortized over the remaining lives of the current participants. During the six
months ended July 29, 2006, the postretirement medical plan generated pre-tax income of $1.4
million versus an expense of $3.5 million for the six months
ended July 30, 2005. |
11. |
|
At July 29, 2006, TJX had interest rate swap agreements outstanding with a notional amount of
$100 million. The agreements entitle TJX to receive biannual payments of interest at a fixed
rate of 7.45% and pay a floating rate of interest indexed to the six-month LIBOR rate with no
exchange of the underlying notional amounts. The interest rate swap agreements converted a
portion of TJXs long-term debt from a fixed rate obligation to a floating rate obligation.
TJX has designated the interest rate swaps as a fair value hedge of the related long-term
debt. The fair value of the swap agreements outstanding at July 29, 2006, excluding the
estimated net interest receivable, was a liability of $5.5 million. The valuation of the
derivative instruments results in an offsetting fair value adjustment to the debt hedged;
accordingly, long-term debt has been reduced by $5.5 million. |
|
|
Also at July 29, 2006, TJX had an interest rate swap on the entire principal amount of its C$235
million three-year note converting the interest on the note from floating to a fixed rate of
interest at approximately 4.136%. The interest rate swap is designated as a cash flow hedge of
the underlying debt. The fair value of the contract, excluding the net interest accrual,
amounted to an asset of $1.5 million (C$1.7 million) as of July 29, 2006. The valuation of the
swap results in an offsetting adjustment to other comprehensive
income. |
|
|
On July 20, 2006 TJX determined that a C$355 million intercompany loan, due from Winners to TJX,
would not be payable in the foreseeable future due to the capital and cash flow needs of
Winners. As a result the intercompany loan and a currency swap (designated as a cash flow hedge
of the loan) were re-designated as a net investment in a foreign operation. Accordingly, future
gains or losses on these items will be recorded in other
comprehensive income. |
12. |
|
In May 2006, TJX amended its $500 million four-year revolving credit facility and its $500
million five-year revolving credit facility (initially entered into in May 2005), extending
the maturity dates of these agreements until May 5, 2010 and May 5, 2011, respectively. These
agreements have no compensating balance requirements and have various covenants including a
requirement of a specified ratio of debt to earnings. These agreements serve as back up to
TJXs commercial paper program. At July 29, 2006 and July 30, 2005, TJX had $141 million and
$415 million of commercial paper outstanding, respectively. The availability under revolving
credit facilities at July 29, 2006 and July 30, 2005 was $859 million and $585 million,
respectively. |
11
13. |
|
TJX accrues for inventory purchase obligations at the time the inventory is shipped rather
than when received and accepted by TJX. As a result, merchandise inventory on TJXs balance
sheets include an accrual for in-transit inventory of $370.5 million at July 29, 2006 and
$326.0 million at July 30, 2005. A liability for a comparable amount is included in accounts
payable for the respective period. |
14. |
|
Accrued expenses and other current liabilities as of July 29, 2006 and July 30, 2005 include
$197.5 million and $173.3 million, respectively, of checks outstanding in excess of the book
balance in certain cash accounts. These are zero balance cash accounts maintained with
certain financial institutions that TJX funds as checks clear and for which no right of offset
exists. |
15. |
|
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No.
48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109
(FIN 48). FIN 48 establishes a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. Pursuant to FIN 48, the effects of a tax position are recognized in
the financial statements when it is more likely than not, based on the technical merits, that
the position will be sustained upon examination by the taxing authority and cease to be
recognized when this criteria is no longer met. FIN 48 also requires certain disclosures
regarding unrecognized tax benefits and the amounts and classification of the related interest
and penalties. FIN 48 is effective for fiscal years beginning after December 15, 2006. TJX is
currently evaluating the impact of this new statement. |
12
Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
The Thirteen Weeks (second quarter) and Twenty-Six Weeks (six months) Ended July 29, 2006
Versus
The Thirteen Weeks (second quarter) and Twenty-Six Weeks (six months) Ended July 30, 2005
Forward-looking Statements
This Form 10-Q including various portions of this Managements Discussion and Analysis and the
footnotes to our Financial Statements contain forward-looking statements. Words such as
expects, anticipates, goals, plans, believes, continues, may, and variations of such
words and similar words and expressions identify such forward-looking statements. In addition, any
statements that refer to projections of our future financial performance, our anticipated growth
and trends in our businesses, and other characterizations of future events or circumstances are
forward-looking statements. There are a number of important risks and uncertainties that could
cause our actual results to differ materially from those indicated or implied by such
forward-looking statements. These risks and uncertainties include our ability to continue
successful expansion of our store base and increase same store sales; risks of expansion; our
ability to successfully implement our opportunistic inventory strategies and to effectively manage
our inventories; successful advertising and promotion; consumer confidence, demand, spending habits
and buying preferences; effects of unseasonable weather; competitive factors; factors affecting
availability of store and distribution center locations on suitable terms; factors affecting our
recruitment and employment of associates; factors affecting expenses; success of our acquisition
and divestiture activities; our ability to successfully implement technologies and systems and
protect data; our ability to continue to generate adequate cash flows; availability and cost of
financing; general economic conditions, including gasoline prices; potential disruptions due to
wars, natural disasters and other events beyond our control; changes in currency and exchange
rates; import risks; adverse outcomes for any significant litigation; changes in laws and
regulations and accounting rules and principles; and effectiveness of internal controls. These
risks and uncertainties are discussed in Item 1A, Risk Factors in our Form 10-K for the year
ended January 28, 2006 and in this and our other filings with the Securities and Exchange
Commission. We do not intend to publicly update or revise any forward-looking statements as a
result of new information, future events or otherwise.
Basis of Presentation
In the fourth quarter of fiscal 2006, TJX elected to early adopt the provisions of SFAS No. 123(R),
which requires that the fair value of all stock-based awards be reflected in the financial
statements based on the fair value of the awards at the date of grant. TJX elected the modified
retrospective transition method and, accordingly, all prior periods have been adjusted to reflect
the impact of this standard.
Results of Operations
Overview: Highlights of our financial performance for the second quarter and six months ended July
29, 2006, include the following:
|
|
|
Net sales increased 9% to $4.0 billion for the second quarter and 8% to $7.9 billion for
the six-month period over last years comparable periods. We continued to grow our
business, with stores in operation at July 29, 2006 up 6% and total selling square footage
up 7% from a year ago. |
|
|
|
|
Consolidated same store sales increased 4% for the second quarter and 3% on a
year-to-date basis as compared to the same periods last year. |
|
|
|
|
Same store sales were primarily driven by growth in unit sales during the second
quarter, with the average unit selling price (average ticket) essentially flat compared
to last year. |
|
|
|
|
Our second quarter pre-tax margin (the ratio of pre-tax income to net sales) increased
to 5.8% from 4.9% last year, primarily due to significant improvement in the profitability
of our smaller divisions. The pre-tax margin increase reflects improved expense ratios,
primarily due to the 4% same store sales increase and cost reduction initiatives, as well
as the non-recurrence of certain charges related to the closing of three Winners stores and
a HomeGoods distribution center and the elimination of e-commerce losses included in last
years second quarter. Merchandise margins improved slightly over last years second
quarter very strong performance. |
|
|
|
|
Year-to-date, our pre-tax margin increased to 6.2% from 5.5% last year, primarily due to
improved merchandise margins and improvement in our operating expense ratios. The
improvement in our selling, |
13
|
|
|
general and administrative expense to sales rate is partially offset by a one-time charge
relating to a workforce reduction which was taken in the first quarter of this year. |
|
|
|
|
Net income for the second quarter was $138 million, a 25% increase above last years
second quarter. Net income for the six-month period was $302 million, a 23% increase from
net income of $246 million for the same period last year. |
|
|
|
|
Diluted earnings per share were $0.29 and $0.63 for the second quarter and six-month
period, respectively, each a 26% increase over the same periods last year. Earnings per
share in both periods reflect the favorable impact of our share repurchase program. |
|
|
|
|
During the second quarter, we repurchased 8.7 million shares of our common stock at a
cost of $204 million and for the year-to-date period, we repurchased 15.9 million shares of
our common stock at a cost of $381 million. |
|
|
|
|
Consolidated average per store inventories, including inventory on hand at our
distribution centers, as of July 29, 2006 were 4% below the prior year. |
The following is a discussion of our consolidated operating results, followed by a discussion of
our segment operating results. All references to earnings per share are diluted earnings per share
unless otherwise indicated.
Net sales: Consolidated net sales for the quarter ended July 29, 2006 were $4.0 billion, up 9% from
$3.6 billion in last years second quarter. The increase in net sales for this years second
quarter includes 5% from new stores and 4% from same store sales. The same store sales increase
for the quarter ended July 29, 2006 benefited by approximately
1 percentage point from foreign currency exchange
rates as compared to a benefit in last years second quarter of approximately one-half percentage point.
On a year-to-date basis, consolidated net sales for the six months ended July 29, 2006 were $7.9
billion, up 8% from $7.3 billion in last years comparable period. The increase in net sales for
the six months ended July 29, 2006 includes 5% from new stores and 3% from same store sales.
Foreign currency exchange rates favorably impacted same store sales
increases by approximately 1 percentage point
in both the current and prior year six-month periods.
During the second quarter, same store sales increases were primarily due to higher unit sales, with
the average ticket essentially flat. Year-to-date, increases in unit sales have been partially
offset by a reduction in the average ticket, which impacted the first quarter due to a shift in our
merchandise mix as a result of a planned increase in the percentage of opportunistic, off-price
purchases. This reduction in the average ticket has since been offset through refinements to our
merchandise mix.
Net sales for the second quarter and six months ended July 29, 2006 reflected increased demand for
misses sportswear, jewelry, accessories, footwear and home fashions. These increases were
partially offset by the juniors sportswear and childrens categories, which recorded same store
declines across most of our divisions. Geographically, the Northeast and Southwest performed above
the consolidated average, while the Midwest was below the average.
We define same store sales to be sales of those stores that have been in operation for all or a
portion of two consecutive fiscal years, or in other words, stores that are starting their third
fiscal year of operation. We classify a store as a new store until it meets the same store
criteria. We determine which stores are included in the same store sales calculation at the
beginning of a fiscal year and the classification remains constant throughout that year, unless a
store is closed. We calculate same store sales results by comparing the current and prior year
weekly periods that are most closely aligned. Relocated stores and stores that are increased in
size are generally classified in the same way as the original store, and we believe that the impact
of these stores on the same store percentage is immaterial. Consolidated and divisional same store
sales are calculated in U.S. dollars. We also show divisional same store sales in local currency
for our foreign divisions, because this removes the effect of changes in currency exchange rates,
and we believe it is a more appropriate measure of the divisional operating performance.
14
The following table sets forth operating results expressed as a percentage of net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Net Sales |
|
Percentage of Net Sales |
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 29, |
|
July 30, |
|
July 29, |
|
July 30, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
Net sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales, including buying and
occupancy costs |
|
|
76.6 |
|
|
|
77.0 |
|
|
|
76.1 |
|
|
|
76.7 |
|
Selling, general and administrative expenses |
|
|
17.5 |
|
|
|
17.9 |
|
|
|
17.6 |
|
|
|
17.7 |
|
Interest expense, net |
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
|
5.8 |
% |
|
|
4.9 |
% |
|
|
6.2 |
% |
|
|
5.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales, including buying and occupancy costs: Cost of sales, including buying and occupancy
costs, as a percentage of net sales, decreased 0.4 percentage points for the quarter ended July 29,
2006 as compared to the same period last year. This decrease reflects a reduction in distribution
costs as a percentage of net sales, due to productivity improvements at our distribution centers,
and effective buying cost leverage, partially offset by an increase in occupancy costs as a
percentage of net sales. Merchandise margins improved slightly on top of strong merchandise
margins in last years second quarter.
On a year-to-date basis, cost of sales, including buying and occupancy costs, as a percentage of
net sales, decreased by 0.6 percentage points, as compared to the same period last year. The
decrease in this ratio reflects a 0.5 percentage point increase in our consolidated merchandise
margin, which improved across virtually all of our divisions. The merchandise margin improvement
was driven primarily by reduced markdowns. Consolidated distribution and buying costs as a
percentage of net sales also improved from the same period in the prior year, largely due to the
levering of the same store sales increases at our smaller divisions and cost containment measures,
although partially offset by an increase in occupancy costs, as a percentage of sales as compared
to the same period last year.
Selling, general and administrative expenses: Selling, general and administrative expenses, as a
percentage of net sales for the second quarter decreased 0.4 percentage points over last year and
decreased 0.1 percentage points for the six-month period as compared to the same period last year.
The decreases are primarily attributable to leverage from the 4% same store sales increase on
expense ratios, the second quarter effects of our continued focus on cost management and the impact
on last years second quarter of closing costs associated with three Winners stores and a HomeGoods
distribution center. These improvements were partially offset by the impact of a planned increase
in advertising costs (up 0.1 percentage points as a percent of net
sales) and a one-time charge of approximately $7 million in the first quarter
relating to the cost of a workforce reduction. We have planned advertising and other marketing
expense to increase for the remainder of the year.
Interest expense, net: Interest expense, net of interest income for the second quarter ended July
29, 2006 was $5 million compared to $8 million in last years second quarter. Year-to-date net
interest expense was $9 million compared to $14 million for the same period last year. The
reduction in net interest expense for both periods is due to higher interest income in the periods
ended July 29, 2006 versus the comparable periods last year. Interest income was $4 million in the
current years second quarter versus $1 million in the prior year and was $10 million for the
six-months ended July 29, 2006 compared to $4 million for the same period last year. The increase
in interest income was due to higher cash balances available for investment as well as higher
interest rates on these investments during the current year periods versus last years comparable
periods.
Income taxes: Our effective income tax rate was 39.8% for the quarter ended July 29, 2006 compared
to 38.4% in last years second quarter, and 38.4% for the current year-to-date period as compared
to 38.4% for last years comparable period. Through July 20, 2006, the effective income tax rate
was impacted by the tax treatment of foreign currency exchange gains and losses on certain
intercompany loans between Winners and TJX. This increased our current second quarter effective
tax rate by 0.8 percentage points and reduced our year-to-date effective rate by 0.4 percentage
points. Effective July 20, 2006, we re-designated this intercompany loan and the related hedge as
a net investment in our foreign operations and future gains or losses on these items, net of tax
effects, will be recorded in other comprehensive income (see Note 11 of the Notes to Consolidated
Interim Financial Statements).
15
Net income: Net income for this years second quarter was $138 million, or $.29 per diluted
share, versus $111 million, or $0.23 per diluted share in last years second quarter. Net income
for the six months ended July 29, 2006 was $302 million, or $0.63 per diluted share, compared to
$246 million, or $0.50 per diluted share, for the same period last year. Currency exchange rates
had a favorable impact on net income and earnings per share for the quarter and six months ended
July 29, 2006 and increased diluted earnings per share by approximately $.01 in both periods.
Earnings per share in both years reflect the favorable impact of our share repurchase program.
Segment information: The following is a discussion of the operating results of our business
segments. We consider each of our operating divisions to be a segment. We evaluate the
performance of our segments based on segment profit or loss, which we define as pre-tax income
before general corporate expense and interest. Segment profit or loss as we define the term may
not be comparable to similarly titled measures used by other entities. In addition, this measure
of performance should not be considered an alternative to net income or cash flows from operating
activities as an indicator of our performance or as a measure of liquidity. Presented below is
selected financial information related to our business segments (U.S. dollars in millions):
Segment results for all prior periods have been adjusted to reflect the impact of expensing stock
options due to the adoption of SFAS No. 123R.
Marmaxx
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 29, |
|
July 30, |
|
July 29, |
|
July 30, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
Net sales |
|
$ |
2,658.5 |
|
|
$ |
2,537.3 |
|
|
$ |
5,305.2 |
|
|
$ |
5,100.9 |
|
Segment profit |
|
$ |
208.3 |
|
|
$ |
202.3 |
|
|
$ |
477.8 |
|
|
$ |
459.8 |
|
Segment profit as a percentage of net sales |
|
|
7.8 |
% |
|
|
8.0 |
% |
|
|
9.0 |
% |
|
|
9.0 |
% |
Percent increase in same store sales |
|
|
2 |
% |
|
|
2 |
% |
|
|
1 |
% |
|
|
3 |
% |
Stores in operation at end of period |
|
|
|
|
|
|
|
|
|
|
1,536 |
|
|
|
1,477 |
|
Selling square footage at end of period
(in thousands) |
|
|
|
|
|
|
|
|
|
|
37,563 |
|
|
|
35,903 |
|
Marmaxx posted a 2% same store sales increase for the quarter ended July 29, 2006 and a 1% same
store sales increase for the six months ended July 29, 2006, compared to the same periods last
year. The second quarter increase was primarily due to an increase in the number of units sold,
with the average ticket essentially flat. The year-to-date increase was due to an increase in the
number of units sold, partially offset by a slight decline in the average ticket. During the first
quarter of this year, Marmaxx had a significant shift from upfront buys to more opportunistic
off-price buys, which reduced the average ticket. We view the shift to more off-price buys as a
positive, as these purchases are made closer to need, when we know more about fashion and the
pricing environment. The decline in average ticket experienced during the first quarter was
largely offset during the second quarter through refinements to the merchandise mix.
Marmaxxs second quarter sales results reflected a 6% same store sales increase in womens
sportswear and a 3% increase in jewelry, accessories and footwear, combined. Trends in home
fashions same store sales continued to improve, increasing 2% for the quarter, while the juniors
sportswear and childrens categories recorded same store sales declines. Year-to-date same store
sales reflected strong growth in jewelry, accessories and footwear. While we have substantially
completed the expansion of jewelry and accessories departments in TJ Maxx, we continue to expand
footwear departments in Marshalls. As of the end of the current second quarter, 213 of the 729
Marshalls stores had expanded footwear departments, with the potential to expand a significant
number of the remaining stores. Geographically, same store sales in the Northeast and Southwest
were the strongest in the country, the West Coast was in line with the chain and the Midwest
continued to trail the chain.
Segment profit for the quarter ended July 29, 2006 grew to $208 million, a 3% increase compared to
last years second quarter. Segment profit as a percentage of net sales (segment profit margin
or segment margin) decreased to 7.8% from 8.0% last year. Merchandise margins were down 0.3
percentage points, as expected, for the quarter, as we anniversaried very strong merchandise
margins from a year ago. Overall, operating costs as a percentage of net sales decreased, with
improved distribution and administrative costs and the elimination of e-
commerce losses partially offset by higher occupancy costs and a planned increase in advertising
expense. Cost ratios were also favorably impacted by our cost
reduction initiatives.
16
Segment profit for the six months ended July 29, 2006 increased 4% to $478 million, compared to the
same period last year. Segment profit margin was 9.0%, unchanged from the prior year. Segment
margin was favorably impacted by merchandise margins, which increased 0.2 percentage points,
primarily due to lower markdowns. The improved merchandise margins were offset by increases in
operating costs as a percentage of net sales, primarily due to the impact of the 1% same store
sales increase on expense ratios.
As of July 29, 2006, Marmaxxs average per store inventories, including inventory on hand at its
distribution centers, were down 8% from inventory levels at the same time last year, compared to a
13% increase at July 29, 2005 over the respective prior-year period-end.
Winners and HomeSense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
Twenty-Six Weeks Ended |
|
|
|
July 29, |
|
|
July 30, |
|
|
July 29, |
|
|
July 30, |
|
|
|
2006 |
|
|
2005 |
|
|
2006 |
|
|
2005 |
|
|
Net sales |
|
$ |
400.5 |
|
|
$ |
316.8 |
|
|
$ |
769.3 |
|
|
$ |
629.9 |
|
Segment profit |
|
$ |
41.5 |
|
|
$ |
18.6 |
|
|
$ |
69.6 |
|
|
$ |
28.5 |
|
Segment profit as a percentage of net sales |
|
|
10.4 |
% |
|
|
5.9 |
% |
|
|
9.0 |
% |
|
|
4.5 |
% |
Percent increase (decrease) in same store sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. currency |
|
|
17 |
% |
|
|
(1 |
)% |
|
|
13 |
% |
|
|
3 |
% |
Local currency |
|
|
6 |
% |
|
|
(9 |
)% |
|
|
3 |
% |
|
|
(5 |
)% |
Stores in operation at end of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Winners |
|
|
|
|
|
|
|
|
|
|
178 |
|
|
|
167 |
|
HomeSense |
|
|
|
|
|
|
|
|
|
|
61 |
|
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Winners and
HomeSense |
|
|
|
|
|
|
|
|
|
|
239 |
|
|
|
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling square footage at end of period (in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Winners |
|
|
|
|
|
|
|
|
|
|
4,094 |
|
|
|
3,814 |
|
HomeSense |
|
|
|
|
|
|
|
|
|
|
1,148 |
|
|
|
876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Winners and
HomeSense |
|
|
|
|
|
|
|
|
|
|
5,242 |
|
|
|
4,690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales for Winners and HomeSense increased 26% for the second quarter ended July 29, 2006 over
last years second quarter and 22% for the six-month period over the same period last year.
Currency exchange rates accounted for nearly one-half of the increase in both periods. In local
currency, same store sales increased 6% for the second quarter compared to the same store sales
decline of 9% for the second quarter last year, and increased 3% for the year-to-date period this
year compared to a 5% same store sales decrease for the year-to-date period last year. Same store
sales for the periods ended July 29, 2006 were positively impacted by strong growth in sales of
jewelry, accessories and footwear, and home fashions, partially offset by declines in the mens and
childrens businesses. The same store sales declines of last years second quarter and six-month
periods were primarily due to lower clearance sales volume in those periods than in the comparable
periods in 2004 as well as a decline in the average ticket. In both the current and prior year
periods, Winners refocused on maintaining liquid inventory, buying into current trends and flowing
fresh product to their stores, among other things, to improve inventory turns and reduce markdowns.
Segment profit for the current years second quarter more than doubled to $42 million and segment
margin increased 4.5 percentage points over the same period last year to 10.4%. Currency exchange
rates accounted for approximately one-third of the growth in segment profit in this years second
quarter. The improved segment margin reflected an increase in merchandise margins (1.0 percentage
point) primarily due to improved mark on. Segment profit improvement
also reflected expense leverage across all categories due to the impact of the 6% increase in same
store sales on expense ratios, as well as the results of Winners focus on cost containment.
Additionally, last years second quarter included costs associated with closing of three stores,
which favorably impacted second quarter year-over-year comparisons by 0.5 percentage points.
Segment profit for the six months ended July 29, 2006 increased significantly to $70 million and
segment margin increased 4.5 percentage points over the same period last year to 9.0%. Currency
exchange rates accounted for
approximately 20% of the growth in the year-to-date segment profit. The improved segment margin
was driven by a 2.4 percentage point increase in Winners merchandise margins over the same period
last year, due to improved mark on and lower markdowns.
17
Winners results for the year-to-date
period also reflected expense leverage across most categories, reflecting the results of Winners
cost containment efforts. Winners results for the year-to-date period include a charge of
approximately $2 million for Winners share of the one-time cost of the workforce reduction, which
was taken during the first quarter of this year.
T.K. Maxx
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 29, |
|
July 30, |
|
July 29, |
|
July 30, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
Net sales |
|
$ |
405.4 |
|
|
$ |
327.5 |
|
|
$ |
754.8 |
|
|
$ |
645.2 |
|
Segment profit (loss) |
|
$ |
18.0 |
|
|
$ |
9.0 |
|
|
$ |
17.8 |
|
|
$ |
6.8 |
|
Segment profit (loss) as a percentage of net sales |
|
|
4.4 |
% |
|
|
2.7 |
% |
|
|
2.4 |
% |
|
|
1.1 |
% |
Percent increase (decrease) in same store sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. currency |
|
|
13 |
% |
|
|
1 |
% |
|
|
5 |
% |
|
|
2 |
% |
Local currency |
|
|
10 |
% |
|
|
2 |
% |
|
|
7 |
% |
|
|
0 |
% |
Stores in operation at end of period |
|
|
|
|
|
|
|
|
|
|
202 |
|
|
|
184 |
|
Selling square footage at end of period (in
thousands) |
|
|
|
|
|
|
|
|
|
|
4,378 |
|
|
|
3,850 |
|
T.K. Maxxs net sales for the second quarter ended July 29, 2006 increased 24% compared to the same
period last year and the year-to-date period net sales increased 17% over the same period last
year. Currency exchange rates accounted for approximately 3 percentage points of the growth in the
second quarter net sales, but had a negative impact of approximately 3 percentage points on
year-to-date sales growth. In local currency, T.K. Maxxs same store sales increased 10% for the
second quarter as compared to 2% for last years second quarter. On a year-to-date basis in local
currency, same store sales increased 7% this year and were flat last year. Same store sales for
home fashions, childrens and accessories performed well above the chain average for both periods
this year.
Segment profit for the current years second quarter doubled to $18 million, and segment margin
increased 1.7 percentage points over last years second quarter. Segment profit for the six-month
period more than doubled to $17.8 million, and segment margin increased 1.3 percentage points over
the first six months last year. T.K. Maxxs segment margin for both the second quarter and
six-month period reflects improvement in merchandise margins and leveraging of expenses across most
major expense categories. These improvements were partially offset by an increase in occupancy
costs as a percentage of net sales due to higher base rent, real estate taxes and utility costs.
HomeGoods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 29, |
|
July 30, |
|
July 29, |
|
July 30, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
Net sales |
|
$ |
301.3 |
|
|
$ |
259.1 |
|
|
$ |
607.2 |
|
|
$ |
517.7 |
|
Segment profit (loss) |
|
$ |
4.2 |
|
|
$ |
(4.7 |
) |
|
$ |
12.7 |
|
|
$ |
(5.4 |
) |
Segment profit (loss) as a percentage of net sales |
|
|
1.4 |
% |
|
|
(1.8 |
)% |
|
|
2.1 |
% |
|
|
(1.0 |
)% |
Percent increase (decrease) in same store sales: |
|
|
4 |
% |
|
|
0 |
% |
|
|
4 |
% |
|
|
0 |
% |
Stores in operation at end of period |
|
|
|
|
|
|
|
|
|
|
260 |
|
|
|
230 |
|
Selling square footage at end of period (in
thousands) |
|
|
|
|
|
|
|
|
|
|
5,021 |
|
|
|
4,453 |
|
HomeGoods net sales for the second quarter of fiscal 2007 increased 16% compared to the same
period last year, and on a year-to-date basis net sales increased 17% over the same period last
year. Same store sales increased 4% in both the second quarter and six months ended July 29, 2006
as compared to flat same store sales results in both periods last year. Segment margin for both
the quarter and six months ended July 29, 2006 improved over last years comparable periods
primarily due to a reduction in distribution costs as a percentage of net sales. Last years
distribution costs reflected the impact of transitioning to a new distribution facility. Segment
margin for both periods in the current year
also reflected the favorable impact on expense ratios of 4% same store sales increases and the
elimination of e-commerce losses included in last years results.
18
A.J. Wright
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 29, |
|
July 30, |
|
July 29, |
|
July 30, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
Net sales |
|
$ |
158.1 |
|
|
$ |
147.3 |
|
|
$ |
320.5 |
|
|
$ |
286.6 |
|
Segment profit (loss) |
|
$ |
(5.0 |
) |
|
$ |
(2.7 |
) |
|
$ |
(8.0 |
) |
|
$ |
(6.9 |
) |
Segment profit (loss) as a percentage of net sales |
|
|
(3.2 |
)% |
|
|
(1.8 |
)% |
|
|
(2.5 |
)% |
|
|
(2.4 |
)% |
Percent increase (decrease) in same store sales: |
|
|
1 |
% |
|
|
1 |
% |
|
|
2 |
% |
|
|
1 |
% |
Stores in operation at end of period |
|
|
|
|
|
|
|
|
|
|
156 |
|
|
|
143 |
|
Selling square footage at end of period (in
thousands) |
|
|
|
|
|
|
|
|
|
|
3,137 |
|
|
|
2,872 |
|
A.J. Wrights net sales increased 7% for the second quarter ended July 29, 2006 over the same
quarter in the prior year, and increased 12% for the six months ended July 29, 2006 as compared to
the same period last year. A.J. Wrights operating loss increased for both of the 2006 periods
over those a year earlier entirely due to the sales being lower than planned combined with the
related markdown impact, which resulted in lower merchandise margins compared to prior year.
Additionally, A.J. Wrights expenses increased across most categories as a percentage of net sales,
primarily due to the delevering impact of the 1% same store sales increase on expense ratios. We
are working to find the right merchandising strategy, level of advertising and marketing message
for this business and to address underperforming stores.
Bobs Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
|
|
July 29, |
|
July 30, |
|
July 29, |
|
July 30, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
Net sales |
|
$ |
64.3 |
|
|
$ |
59.8 |
|
|
$ |
127.7 |
|
|
$ |
119.2 |
|
Segment profit (loss) |
|
$ |
(4.0 |
) |
|
$ |
(9.1 |
) |
|
$ |
(10.3 |
) |
|
$ |
(16.1 |
) |
Segment profit (loss) as a percentage of net
sales |
|
|
(6.3 |
)% |
|
|
(15.2 |
)% |
|
|
(8.0 |
)% |
|
|
(13.5 |
)% |
Percent increase (decrease) in same store sales: |
|
|
6 |
% |
|
|
(11 |
%) |
|
|
4 |
% |
|
|
(9 |
)% |
Stores in operation at end of period |
|
|
|
|
|
|
|
|
|
|
36 |
|
|
|
34 |
|
Selling square footage at end of period (in
thousands) |
|
|
|
|
|
|
|
|
|
|
1,306 |
|
|
|
1,230 |
|
Bobs Stores second quarter net sales increased 8% as compared to the same period in the prior
year, and increased 7% for the six months ended July 29, 2006 as compared to the same period last
year. Same store sales increased in both the second quarter and six months ended July 20, 2006 as
compared to same store sales decreases in both periods last year. Bobs Stores segment losses for
the second quarter and year-to-date periods were smaller than last year primarily due to the sales
increases combined with significant improvement in merchandise margins. Merchandise margin
increases were driven by improved mark-on, the result of better buying, which has more than offset
increases in promotional markdowns. We continue to evaluate this
business and assess its potential for future growth.
General corporate expense
General corporate expense for segment reporting purposes refers to those costs not specifically
related to the operations of our business segments, and is included in selling, general and
administrative expenses. The increase in general corporate expense for the second quarter and six
months ended July 29, 2006 compared to those periods last year reflected normal increases in
compensation costs. In addition, general corporate expense for the six months ended July 29, 2006
included $4 million for the portion of the pre-tax charge relating to the workforce reduction
allocated to the corporate group.
19
Analysis of Financial Condition
Liquidity and Capital Resources
Operating activities for the six months ended July 29, 2006 provided cash of $204 million, an
increase of $18 million over last years cash provided from operations of $186 million. The
increase in operating cash flows in the current year compared to last year reflects an increase in
net income (adjusted for depreciation) of $71 million, as well as a favorable change in accounts
receivable of $24 million, largely due to the receipt of the settlement from the VISA/Mastercard
litigation and some insurance proceeds. These increases in operating cash flows were partially
offset by the change in inventory, net of accounts payable, which required additional cash of $78
million in the six-month period ended July 29, 2006 versus the
same period in the prior year. The reduction in the non-cash charge
for stock compensation for the six months ended July 29, 2006 is
largely offset by an increase in our accrual for long-term cash
incentive awards. In fiscal 2006 we revised our approach to long-term
compensation by substantially decreasing the stock incentives awarded
to individuals and increasing their long-term cash incentive
opportunities.
Investing activities relate primarily to property additions for new stores, store improvements and
renovations and investment in existing and new distribution centers. Cash outlays for property
additions amounted to $179 million in the six months ended July 29, 2006 compared to $219 million
in the same period last year. We anticipate that capital spending for the current fiscal year will
be approximately $100 million less than capital spending for the prior fiscal year.
Financing activities consist primarily of our share repurchase program. During the six months
ended July 29, 2006, we repurchased and retired 15.9 million shares of our common stock at a cost
of $381 million. We reflect stock repurchases in our financial statements on a settlement basis
which amounted to $375 million for the six-month period ended July 29, 2006, compared to $383
million in the comparable period last year. We expect to repurchase $650 million of its common
stock in fiscal 2007. Since the inception of our current $1 billion stock repurchase program
through July 29, 2006, we repurchased 16.1 million shares at a total cost of $387 million.
In May 2006, we amended our $500 million four-year revolving credit facility and our $500 million
five-year revolving credit facility (initially entered into in May 2005), extending the maturity
dates of these agreements until May 5, 2010 and May 5, 2011, respectively. These agreements have
no compensating balance requirements and have various covenants including a requirement of a
specified ratio of debt to earnings. These agreements serve as back up to our commercial paper
program. At July 29, 2006 and July 30, 2005, we had $141 million and $415 million, respectively,
of commercial paper outstanding. The availability under revolving credit facilities at July 29,
2006 and July 30, 2005 was $859 million and $585 million, respectively. We believe internally
generated funds and our revolving credit facilities are more than adequate to meet our operating
needs.
New Accounting Pronouncements
In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes an interpretation of FASB Statement No. 109 (FIN48). FIN 48 establishes a recognition
threshold and measurement attribute for the financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. Pursuant to FIN 48, the effects of a
tax position are recognized in the financial statements when it is more likely than not, based on
the technical merits, that the position will be sustained upon examination by the taxing authority.
Conversely, previously recognized tax positions cease to be recognized when this is no longer
true. FIN 48 also requires certain disclosures regarding unrecognized tax benefits and the amounts
and classification of the related interest and penalties. FIN 48 is effective for fiscal years
beginning after December 15, 2006. We are currently evaluating the impact of FIN 48.
20
|
|
|
Item 3 |
|
Quantitative and Qualitative Disclosure about Market Risk |
We are exposed to foreign currency exchange rate risk on our investment in our Canadian
(Winners and HomeSense) and European (T.K. Maxx) operations. As more fully described in
Note D to our consolidated financial statements, on page F-15 of our Annual Report on
Form 10-K for the fiscal year ended January 28, 2006, we hedge a significant portion of
our net investment and certain merchandise commitments in these operations with
derivative financial instruments. We enter into derivative contracts only when there is
an underlying economic exposure. We utilize currency forward and swap contracts,
designed to offset the gains or losses in the underlying exposures, most of which are
recorded directly in shareholders equity. The contracts are executed with financial
institutions we believe are creditworthy and are denominated in currencies of major
industrial countries. We have performed a sensitivity analysis assuming a hypothetical
10% adverse movement in foreign currency exchange rates applied to the hedging contracts
and the underlying exposures described above. As of January 28, 2006, the analysis
indicated that such market movements would not have a material effect on our
consolidated financial position, results of operations or cash flows.
Our cash equivalents and short-term investments and certain lines of credit bear
variable interest rates. Changes in interest rates affect interest earned and paid by
us. We periodically enter into financial instruments to manage our cost of borrowing,
however, we believe that the use of primarily fixed rate debt minimizes our exposure to
market conditions.
We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in
interest rates applied to the maximum variable rate debt outstanding during the previous
year. As of January 28, 2006, the analysis indicated that such market movements would
not have a material effect on our consolidated financial position, results of operations
or cash flows.
|
|
|
Item 4 |
|
Controls and Procedures |
We have carried out an evaluation, under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of our disclosure controls and procedures
as of July 29, 2006 pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act
of 1934, as amended (the Act). Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and
procedures are effective in ensuring that information required to be disclosed by us in
the reports that we file or submit under the Act is (i) recorded, processed, summarized
and reported, within the time periods specified in the Securities and Exchange
Commissions rules and forms; and (ii) accumulated and communicated to our management,
including our principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosures. There were no changes in our internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Act) during the fiscal
quarter ended July 29, 2006 identified in connection with our Chief Executive Officers
and Chief Financial Officers evaluation that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
21
PART II. Other Information
Item 1A Risk Factors
There have been no material changes from the risk factors disclosed in Part 1, Item 1A, of our
Form 10-K for the fiscal year ended January 28, 2006.
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
Information on Share Repurchases
The number of shares of common stock we repurchased (on a trade-date basis) during the
second quarter of fiscal 2007 and the average price per share we paid is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum Number (or |
|
|
|
|
|
|
|
|
|
|
Total Number of |
|
Approximate Dollar |
|
|
|
|
|
|
|
|
|
|
Shares Purchased |
|
Value) of Shares |
|
|
|
|
|
|
|
|
|
|
as Part of |
|
that May Yet be |
|
|
Number of Shares |
|
Average Price |
|
Publicly Announced |
|
Purchased Under |
|
|
Repurchased |
|
Paid Per Share(1) |
|
Plan or Program(2) |
|
Plans or Programs |
April 30, 2006
through May 27,
2006 |
|
|
3,228,200 |
|
|
$ |
23.88 |
|
|
|
3,228,200 |
|
|
$ |
739,350,537 |
|
May 28, 2006
through July 1,
2006 |
|
|
4,353,100 |
|
|
$ |
22.89 |
|
|
|
4,353,100 |
|
|
$ |
639,693,739 |
|
July 2, 2006
through July 29,
2006 |
|
|
1,121,200 |
|
|
$ |
23.89 |
|
|
|
1,121,200 |
|
|
$ |
612,905,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: |
|
|
8,702,500 |
|
|
|
|
|
|
|
8,702,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Average price paid per share includes commissions and is rounded to the nearest
two decimal places. |
|
(2) |
|
As of July 29, 2006, we had repurchased 16.1 million shares at a cost of $387.1
million under our $1 billion share repurchase program that was announced on October 11,
2005 and that authorizes the repurchases of shares from time to time. |
Item 4 Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of stockholders on June 6, 2006. The following
actions were taken at the Annual Meeting:
|
|
|
|
|
|
|
|
|
Election of Directors |
|
For |
|
Withheld |
David A. Brandon |
|
|
410,073,374 |
|
|
|
5,342,140 |
|
Bernard Cammarata |
|
|
408,739,415 |
|
|
|
6,676,099 |
|
Gary L. Crittenden |
|
|
411,559,366 |
|
|
|
3,856,148 |
|
Gail Deegan |
|
|
411,535,501 |
|
|
|
3,880,013 |
|
Dennis F. Hightower |
|
|
410,655,308 |
|
|
|
4,760,206 |
|
Amy B. Lane |
|
|
411,582,329 |
|
|
|
3,833,185 |
|
Richard G. Lesser |
|
|
408,167,331 |
|
|
|
7,248,183 |
|
John F. OBrien |
|
|
411,518,661 |
|
|
|
3,896,853 |
|
Robert F. Shapiro |
|
|
408,176,653 |
|
|
|
7,238,861 |
|
Willow B. Shire |
|
|
408,939,993 |
|
|
|
6,475,521 |
|
Fletcher H. Wiley |
|
|
408,338,362 |
|
|
|
7,077,152 |
|
22
Proposal 2
Ratification of appointment of independent registered public accounting firm:
|
|
|
|
|
For |
|
|
407,530,813 |
|
Against |
|
|
5,612,289 |
|
Abstain |
|
|
2,272,412 |
|
Shareholder Proposal 1
Proposal presented by certain shareholders regarding the Director election vote
standard:
|
|
|
|
|
For |
|
|
131,310,644 |
|
Against |
|
|
251,032,045 |
|
Abstain |
|
|
5,145,483 |
|
Broker non-votes |
|
|
27,927,342 |
|
Item 6 Exhibits
|
|
|
10.1 |
|
The TJX Companies, Inc. Stock
Incentive Plan, as amended through June 5, 2006. |
31.1 |
|
Certification Statement of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 |
|
Certification Statement of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 |
|
Certification Statement of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 |
|
Certification Statement of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
23
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934 the registrant
has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
|
|
|
|
|
THE TJX COMPANIES, INC.
|
|
|
(Registrant)
|
|
|
Date: September 1, 2006 |
|
|
|
/s/ Jeffrey G. Naylor
|
|
|
Jeffrey G. Naylor, Senior Executive Vice President Finance, on behalf of The TJX Companies, Inc. and as
Principal Financial and Accounting Officer of
The TJX Companies, Inc. |
|
|
24