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The Tjx Companies, Inc. Reports Above-Plan Q4 And Fy16 Results; Q4 Comp Sales

The following excerpt is from the company's SEC filing.

up 6% and EPS up 6%; Announces Plans to Increase Dividend 24% and Buy Back $1.5B to $2.0B of Stock; Provides FY17 Guidance

FRAMINGHAM, Mass.--(BUSINESS WIRE)--February 24, 2016--The TJX Companies, Inc. (NYSE: TJX), the leading off-price retailer of apparel and home fashions in the U.S. and worldwide, today announced sales and earnings results for the fourth quarter and fiscal year ended January 30, 2016. Net sales for the fourth quarter of Fiscal 2016 increased 8% to $9.0 billion and consolidated comparable store sales increased 6% over last year’s 4% in crease. Net income for the fourth quarter was $666 million and diluted earnings per share were $.99, a 6% increase over the prior year’s $.93.

For the 52-week fiscal year ended January 30, 2016, net sales were $30.9 billion, a 6% increase over last year. Consolidated comparable store sales increased 5% over last year’s 2% increase. Net income for the fiscal year was $2.3 billion. Diluted earnings per share were $3.33, a 5% increase over the prior year’s adjusted $3.16, which excluded a $.01 per share debt extinguishment charge from reported earnings per share of $3.15.

Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., stated, “We are extremely pleased to end another strong year with terrific fourth quarter results! Our fourth quarter 6% comp growth and 6% increase in earnings per share significantly exceeded our expectations. Once again, customer traffic drove our entire consolidated comp increase. It was also the primary driver of our comp increases at every division in the fourth quarter and full year as we continued delivering consumers a differentiated offering at extreme value. We are convinced that we are gaining market share profitably around the world. We were particularly pleased that our overall merchandise margin was up in the fourth quarter while we continued to offer shoppers outstanding values. For the full year, we were thrilled to surpass $30 billion in sales, achieve consolidated comp sales growth of 5%, and deliver above-plan EPS growth. The year 2015 marks our 20

consecutive year of increases in comp sales and EPS! We have sustained profitable growth through many types of economic and retail climates and in different regions around the world, and we have great confidence in the future.”

Herrman continued, “The year is off to a strong start and we have many initiatives planned to continue driving sales and traffic. Our business is very healthy, and similar to last year, our plans for earnings per share growth reflect the negative impact of foreign currency and our previously announced wage initiative. We plan to continue to balance our growth with investments, develop new seeds for growth, and strengthen our leadership positions across the globe. We now operate in nine countries, across three continents, and are excited about the opportunities we see both in our existing regions and new international markets. As always, we have a management team that is laser focused on achieving its plans and passionate about surpassing them. We are confident that we are making the right decisions and investments today that position us extremely well to continue capturing market share and reach $40 billion and beyond!”

Shareholder Distributions

The Company intends to increase the regular quarterly dividend on its common stock to be declared in March 2016 and payable in June 2016 to $.26 per share, subject to the approval of the Company’s Board of Directors. This increase would represent a 24% increase in the current per share dividend and mark the 20

consecutive year that the Company has raised the dividend. Over this period of time, the Company’s dividend has grown at a compound annual rate of 23%.

The Company also announced today its plan to repurchase approximately $1.5 to $2.0 billion of TJX stock during the fiscal year ending January 28, 2017. With $1.5 billion remaining at Fiscal 2016 year end under the Company’s existing stock repurchase program, the Company’s Board of Directors approved a new stock repurchase program that authorizes the repurchase of up to an additional $2.0 billion of TJX common stock from time to time. The new authorization represents approximately 4% of the Company’s outstanding shares at current prices. The new stock repurchase program marks the 17

program approved by the Board since 1997. Over this period, the Company has spent approximately $16.3 billion on the repurchase of TJX stock. During the fourth quarter, the Company spent a total of $510 million to repurchase TJX stock, retiring 7.3 million shares. In Fiscal 2016, the Company spent a total of $1.8 billion to repurchase TJX stock, retiring 26.5 million shares. Under the Company’s repurchase plans, share repurchases may be made from time to time in market or private transactions and may include derivative transactions. The repurchase program announced today has no time limit and may be suspended or discontinued at any time.

Ernie Herrman commented, “Our business continues to generate tremendous amounts of cash and excellent financial returns. In Fiscal 2017, we plan to continue investing to support our growth while distributing cash to our shareholders. In addition to investing in our Associates, our capital spending plans include new stores, store remodels, and our supply chain and infrastructure. Simultaneously, we plan to significantly increase our regular quarterly dividend and will continue to buy back shares at significant levels. All of these actions underscore our confidence in our ability to continue delivering strong, profitable sales across all of our divisions and cash flow that enables us to both fund our continued growth and return value to our shareholders.”

Sales by Business Segment

The Company’s comparable store sales and net sales by division, in the fourth quarter, were as follows:

Fourth Quarter

Comparable Store Sales

Net Sales

($ in millions)

FY2016

FY2015

Marmaxx (U.S.)

+6%

+3%

$5,720

$5,286

HomeGoods (U.S.)

+7%

+11%

$1,180

$1,033

TJX Canada

+14%

$781

$788

TJX International (Europe & Australia)

+1%

+2%

$1,280

$1,198

+4%

$8,962

$8,304

Comparable store sales outside the U.S. calculated on a constant currency basis, which removes the effect of changes in currency exchange rates.

Comparable store sales exclude Sierra Trading Post, tjmaxx.com, tkmaxx.com, and Trade Secret sales.

Net sales in Canada, Europe and Australia include the impact of foreign currency exchange rates. See below.

Figures may not foot due to rounding.

Combination of T.J. Maxx and Marshalls.

Net sales include Sierra Trading Post.

FY2016 net sales include Trade Secret since the acquisition on October 24, 2015.

Sales by Business Segment (continued)

The Company’s comparable store sales and net sales by division for the full year were as follows:

Full Year

$19,948

$18,688

+8%

$3,915

$3,414

+12%

$2,855

$2,884

$4,227

$4,092

+5%

$30,945

$29,078

Impact of Foreign Currency Exchange Rates

Changes in foreign currency...


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