The TJX Companies Inc, the leading off-price retailer of apparel and home fashions in the U.S. and worldwide, announced sales and earnings results for the first quarter ended April 26, 2008. Net sales for the first quarter of Fiscal 2009 increased 6% to $4.4 billion, and consolidated comparable store sales increased 3% over last year.
Net income for the first quarter was $194 million, and diluted earnings per share were $.43 compared to $.34 last year. This year’s first quarter results include a benefit of $12 million, which rounds to $.02 per share, due to certain tax-related adjustments unanticipated at the beginning of the quarter.
Prior year’s first quarter results included an after-tax charge of $12 million, which rounds to $.03 per share, with respect to the computer intrusion(s). Excluding these items, first quarter Fiscal 2009 adjusted diluted earnings per share of $.41 increased 11% over the adjusted $.37 for the prior year.
Carol Meyrowitz, President and Chief Executive Officer of The TJX Companies, Inc., stated, “We are pleased with our first quarter performance, as we once again drove strong sales, merchandise margins, and profit growth despite the challenges of the consumer environment and unfavorable weather in the first two months.
While we continue our sharp execution of our off-price business model and deliver strong results, we are also funding our expansion domestically and internationally. We are excited by our prospects for growth in Europe, having opened our first HomeSense stores in the U.K. and another T.K. Maxx store in Germany. As we move into the second quarter, we are very well positioned to continue to capitalize upon merchandise opportunities and deliver great value to our customers every day.”
Margins:
For the first quarter of Fiscal 2009, the Company’s consolidated pretax profit margin was 6.6%. This compares to 6.4% in the prior year, which included the negative impact (0.5 percentage points) of a charge related to the previously announced computer intrusion(s). Excluding the intrusion(s) charge, this year’s first quarter consolidated pretax profit margin was 0.3 percentage points below the adjusted 6.9% last year and slightly below the Company's plan, due to slightly lower gross profit margin and reduced interest income versus prior year.
The gross profit margin for the Fiscal 2009 first quarter was 24.0%, 0.1 percentage points below the prior year, due to investments in growing the Company’s European businesses and deleverage from buying and occupancy costs. These costs were mostly offset by improvement in merchandise margins, which were achieved despite higher fuel costs. Selling, general and administrative costs as a percent of sales was 17.3%, flat to prior year and better than the Company expected, due to solid expense control.
Inventory:
Total inventories as of April 26, 2008, were $2.9 billion compared with $2.8 billion at the same time in the prior year. Consolidated inventories on a per-store basis, including the warehouses, at April 26, 2008, were down 3% versus being up 7% at the same time last year. At the Marmaxx division, the total inventory commitment, including the warehouses, stores and merchandise on order, was down versus last year on a per-store basis.
The Company remains very comfortable with its inventory levels and the liquidity within its inventories, which position it very well entering the second quarter to take advantage of buying opportunities.
