The TJX Companies, Inc. Reports Strong First Quarter FY10 Results

FRAMINGHAM, Mass.--(Business Wire)--
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 first quarter ended May 2, 2009. Net sales for the first quarter
of Fiscal 2010 increased 1% to $4.35 billion and consolidated comparable store
sales increased 2% over last year. Net income from continuing operations for the
first quarter was $209 million, and diluted earnings per share from continuing
operations were $.49 compared to $.44 last year. Prior year`s first quarter
results included a $.02 benefit from FIN 48 tax adjustments. Excluding last
year`s tax benefit, first quarter diluted earnings per share increased 17% over
the adjusted $.42 for the prior year.

Carol Meyrowitz, President and Chief Executive Officer of The TJX Companies,
Inc., stated, "We are pleased with our first quarter results, which were the
strongest in our history and achieved despite the economic downturn. Customer
traffic increased significantly across virtually all of our divisions, as
customers responded to our extreme values on ever-fresh assortments of great
fashions and great brands. Our strategies of planning comparable store sales
conservatively, running our business with lean inventories, and aggressively
managing expenses drove strong bottom-line results. While we are pleased with
our above-plan start to the year, we remain cautious in our near-term outlook
and are maintaining our conservative approach, as the economic environment
remains uncertain. At the same time, however, we are taking advantage of this
environment to attract new customers, open new vendor doors, and take advantage
of real estate opportunities. Additionally, we are encouraged by the strong
performance of our younger and newer concepts. A.J. Wright in the U.S., T.K.
Maxx in Germany, and HomeSense in the U.K. continue to outperform our
expectations despite widespread consumer weakness, which speaks to the strength
of our value proposition and gives us confidence in our long-term vision to grow
TJX as a global, off-price value retailer."

Sales by Business Segment

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

First Quarter First Quarter
Comparable Store Sales Net Sales ($ in millions)*
FY2010 FY2009 FY2010 FY2009
In the U.S.:
Marmaxx† +1% +1% $2,938 $2,802
HomeGoods -1% +2% $392 $363
A.J. Wright +12% +6% $179 $154
In Canada:
Winners/HomeSense 0% +4% $424 $488
In Europe:
T.K. Maxx/HomeSense +6% +5% $421 $495

TJX +2% +2% $4,354 $4,304
†Combination of T.J. Maxx and Marshalls. *Sales in Canada and Europe were adversely impacted by foreign currency exchange rates.

Impact of Foreign Currency Exchange Rates

In addition to its U.S. businesses, the Company operates stores in Canada, the
U.K., Ireland, and Germany. Changes in foreign exchange rates affect the
translation of the sales and earnings of these businesses into U.S. dollars for
financial reporting purposes. These effects can be material if rates change
significantly versus prior year, as they did during the first quarter of Fiscal
2010.

Additionally, the Company routinely enters into inventory-related hedging
instruments to mitigate the impact of foreign exchange on merchandise margins
when the Company`s international divisions purchase goods from U.S. sources. For
accounting purposes, there is a mark-to-market adjustment on the hedging
instruments at the end of each quarter. While these adjustments occur every
quarter, they are of much greater magnitude when there is significant volatility
in currency exchange rates.

A table detailing the impact of foreign currency on TJX pretax earnings and
margins, as well as on the segment profit and segment profit margins of the
Company`s T.K. Maxx and Winners businesses, is on the Company`s website,
www.tjx.com.

In the first quarter of Fiscal 2010, the movement in foreign currency exchange
rates had a six percentage-point negative impact on consolidated net sales. As
previously announced, the Company began reporting comparable store sales on a
constant currency basis only (which assumes currency exchange rates remained
unchanged from the prior year) at the beginning of the Fiscal 2010 year, which
it believes more closely reflects its operating performance and is consistent
with the reporting practices of other multi-national retailers.

Items Impacting Comparability

The prior year`s first quarter results included a $.02 per share benefit from
FIN 48 tax adjustments. Excluding this tax benefit, Fiscal 2010 first quarter
diluted earnings per share of $.49 increased 17% over the adjusted $.42 for the
prior year`s first quarter.

Foreign currency rates and one-time costs related to the Company`s cost
reduction initiatives also impacted the comparability of its results. Overall,
the combined impact of foreign currency translation as well as mark-to-market
adjustments on the Company`s inventory-related hedges reduced Fiscal 2010 first
quarter earnings per share by $.04, compared to a $.01 reduction to the prior
year`s earnings per share. One-time costs related to the Company`s cost
reduction initiatives reduced the current year`s first quarter earnings per
share by $.01.

Margins

For the first quarter of Fiscal 2010, the Company`s consolidated pretax profit
margin from continuing operations was 7.8%, up 0.9 percentage points over the
prior year. This improvement was due to strong merchandise margins and expense
control. The gross profit margin for the Fiscal 2010 first quarter was 24.8%, up
90 basis points above the prior year primarily due to strong merchandise
margins. Selling, general and administrative costs as a percent of sales were
16.9%, flat to the prior year, despite one-time expenses related to the
Company`s cost reduction initiatives.

Inventory

Total inventories as of May 2, 2009, were $2.8 billion compared with $2.9
billion at the end of the prior year`s first quarter. Consolidated inventories
on a per-store basis, including the warehouses, at May 2, 2009, were down 4%
versus being down 2% at the end of the first quarter 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 continue to buy close to need and flow fresh merchandise assortments to its
stores.

Share Repurchases

During the first quarter, the Company spent a total of $43 million in
repurchases of TJX stock, retiring 1.6 million shares. The Company also
completed its previously announced debt offering, raising $374.3 million to
redeem its zero coupon convertible subordinated notes. Prior to their redemption
as of May 5, 2009, substantially all of these notes were converted into 15.1
million shares of TJX stock by the note holders. The Company expects to use the
proceeds from its debt offering to repurchase all or a portion of these shares.
This share repurchase is incremental to its previously announced plan to
repurchase approximately $250 million of TJX stock. As a result, the Company now
expects to repurchase approximately $625 million of TJX stock in Fiscal 2010.
The Company may adjust the amount of this spending up or down depending on the
economic environment.

Second Quarter Fiscal 2010 Outlook

For the second quarter of Fiscal 2010, the Company expects earnings per share in
the range of $.43 to $.49 compared with $.48 in earnings per share from
continuing operations in the prior year. This range is based upon estimated
consolidated comparable store sales growth of approximately flat to minus 2%,
which reflects the Company`s expectations that the economic and retail
environments will continue to be challenging.

Stores by Concept

During the first quarter, the Company added a total of 28 stores. TJX increased
square footage by 4% over the same period last year.

Store Locations Gross Square Feet
First Quarter First Quarter
(in millions)
Beginning End Beginning End
In the U.S.:
T.J. Maxx 874 882 25.9 26.2
Marshalls 806 809 25.5 25.5
HomeGoods 318 322 7.9 8.0
A.J. Wright 135 140 3.4 3.6
In Canada:
Winners 202 206 5.9 6.0
HomeSense 75 75 1.8 1.8
In Europe:
T.K. Maxx 235 238 7.5 7.6
HomeSense 7 8 0.1 0.2

TJX 2,652 2,680 78.0 78.8

About The TJX Companies, Inc.

The TJX Companies, Inc. is the leading off-price retailer of apparel and home
fashions in the U.S. and worldwide. The Company operates 882 T.J. Maxx, 809
Marshalls, 322 HomeGoods, and 140 A.J. Wright stores in the United States. In
Canada, the Company operates 203 Winners, 75 HomeSense and 3 STYLESENSE stores,
and in Europe, 238 T.K. Maxx and 8 HomeSense stores. TJX`s press releases and
financial information are also available on the Internet at www.tjx.com.

Fiscal 2010 First Quarter Earnings Conference Call

At 11:00 a.m. ET today, Carol Meyrowitz, President and Chief Executive Officer
of TJX, will hold a conference call with stock analysts to discuss the Company`s
first quarter Fiscal 2010 results, operations and business trends. A real-time
webcast of the call will be available at www.tjx.com. A replay of the call will
also be available by dialing (866) 367-5577 through Tuesday, May 26, 2009 or at
www.tjx.com.

May Fiscal 2010 Sales Recording

Additionally, the Company expects to release its May 2009 sales results on
Thursday, June 4, 2009, at approximately 8:15 a.m. ET. Concurrent with that
press release, a recorded message with more detailed information regarding TJX`s
May sales results, operations and business trends will be available via the
Internet at www.tjx.com, or by calling (703) 736-7248 through Thursday, June 11,
2009.

Important Information at Website

Archived versions of the Company`s recorded messages and conference calls,
reconciliations of Non-GAAP to GAAP measures, and other financial information
are available at www.tjx.com after they are no longer available by telephone.
The Company routinely posts information that may be important to investors in
the Investor Information section at www.tjx.com. The Company encourages
investors to consult that section of its website regularly.

Forward-looking Statement

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: Various statements made in this release are forward-looking and involve a
number of risks and uncertainties. All statements that address activities,
events or developments that we intend, expect or believe may occur in the future
are forward-looking statements. The following are some of the factors that could
cause actual results to differ materially from the forward-looking statements:
conditions of global economies and credit and financial markets; foreign
currency exchange rates; execution of buying and inventory management; expansion
of operations; identification of customer trends and preferences; fluctuation in
results; risks of new market/category expansion; implementation of marketing,
advertising and promotional programs; losses from and consequences of computer
intrusion(s); seasonal influences; risks of operating large, multi-division,
multi-national business; unseasonable weather; competition; retention of
personnel; acquisitions and divestitures; operation and implementation of
information systems and technology; protection of data; level of cash flows
generated; factors affecting consumer spending; merchandise quality and safety;
import risks; risks of foreign operations; changes in law and regulations;
outcomes of litigation and proceedings; risks of real estate ownership and
leasing; stock price fluctuations and other factors that may be described in our
filings with the Securities and Exchange Commission. We do not undertake to
publicly update or revise our forward-looking statements even if experience or
future changes make it clear that any projected results expressed or implied in
such statements will not be realized.

The TJX Companies, Inc. and Consolidated Subsidiaries
Financial Summary
(Unaudited)
(Dollars In Thousands Except Per Share Amounts)

Thirteen Weeks Ended
May 2, April 26,

2009
2008

Net sales $ 4,354,224 $ 4,303,555

Cost of sales, including buying and occupancy costs 3,273,346 3,276,943
Selling, general and administrative expenses 735,057 728,386
Interest expense, net 6,601 1,674

Income from continuing operations before provision for income taxes 339,220 296,552
Provision for income taxes 130,006 98,552

Income from continuing operations 209,214 198,000

Loss from discontinued operations, net of income taxes - (4,151 )
Net income $ 209,214 $ 193,849

Diluted earnings per share:
Income from continuing operations $ 0.49 $ 0.44
Net income $ 0.49 $ 0.43

Cash dividends declared per share $ 0.12 $ 0.11
Weighted average common shares - diluted (in thousands) 431,798 450,161

The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Balance Sheets
(Unaudited)
(In Millions)

May 2, April 26,

2009
2008

ASSETS
Current assets:
Cash and cash equivalents $ 1,012.5 $ 698.1
Accounts receivable and other current assets 438.2 353.4
Current deferred income taxes, net 138.5 100.9
Merchandise inventories 2,817.7 2,899.8

Total current assets 4,406.9 4,052.2

Property and capital leases, net of depreciation 2,167.7 2,222.2
Other assets 184.7 190.9
Goodwill and tradename, net of amortization 179.6 181.4

TOTAL ASSETS $ 6,938.9 $ 6,646.7

LIABILITIES AND SHAREHOLDERS` EQUITY
Current liabilities:
Current installments of long-term debt $ 742.2 $ -
Accounts payable 1,551.4 1,678.3
Accrued expenses and other liabilities 1,034.2 1,144.4

Total current liabilities 3,327.8 2,822.7

Other long-term liabilities 751.9 774.4
Non-current deferred income taxes, net 148.9 78.9
Long-term debt 374.3 832.6

Shareholders` equity 2,336.0 2,138.1

TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY $ 6,938.9 $ 6,646.7

The TJX Companies, Inc. and Consolidated Subsidiaries
Condensed Statements of Cash Flows
(Unaudited)
(In Millions)

Thirteen Weeks Ended
May 2, April 26,

2009
2008

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 209.2 $ 193.8
Depreciation and amortization 104.1 99.7
Deferred income tax provision 18.3 32.1
Amortization of stock compensation expense 12.4 12.2
(Increase) decrease in accounts receivable and other assets 31.8 (1.7 )
(Increase) in merchandise inventories (183.8 ) (163.6 )
Increase in accounts payable 267.5 162.4
(Decrease) in accrued expenses and other liabilities (100.8 ) (69.5 )
Other (0.9 ) (1.9 )

Net cash provided by operating activities 357.8 263.5

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (66.4 ) (110.8 )
Purchases of short-term investments (56.7 ) -
Other 0.1 0.2
Net cash (used in) investing activities (123.0 ) (110.6 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for repurchase of common stock (32.4 ) (227.4 )
Proceeds from issuance of long-term debt 374.3 -
Proceeds from sale and issuance of common stock 10.2 71.7
Cash dividends paid (45.4 ) (38.5 )
Other (0.3 ) 9.0
Net cash provided by (used in) financing activities 306.4 (185.2 )

Effect of exchange rate changes on cash 17.8 (2.2 )

Net increase (decrease) in cash and cash equivalents 559.0 (34.5 )
Cash and cash equivalents at beginning of year 453.5 732.6

Cash and cash equivalents at end of period $ 1,012.5 $ 698.1

The TJX Companies, Inc. and Consolidated Subsidiaries
Selected Information by Major Business Segment
(Unaudited)
(In Thousands)

Thirteen Weeks Ended
May 2, April 26,

2009
2008

Net sales:
Marmaxx $ 2,938,309 $ 2,802,290
Canada 424,092 488,384
Europe 420,534 495,194
HomeGoods 391,895 363,429
A.J. Wright 179,394 154,258
$ 4,354,224 $ 4,303,555

Segment profit (loss):
Marmaxx $ 330,670 $ 278,499
Canada 19,727 40,897
Europe 9,293 1,463
HomeGoods 15,573 8,894
A.J. Wright 4,413 (885 )
379,676 328,868

General corporate expenses 33,855 30,642
Interest expense, net 6,601 1,674
Income from continuing operations before provision for income taxes $ 339,220 $ 296,552

The TJX Companies, Inc. and Consolidated Subsidiaries
Notes to Consolidated Condensed Statements

1
During the first quarter ended May 2, 2009, TJX repurchased 1.6
million shares of its common stock at a cost of $43 million. TJX
records the repurchase of its stock on a cash basis and the amounts
reflected in the financial statements may vary from the above due to
the timing of settlement of repurchases.
2
On August 19, 2008, the Company sold its Bob’s Stores division. The
operating results for Bob’s first quarter of last year have been
reclassified to discontinued operations.
3
On April 7, 2009 TJX issued $375 million of 6.950% ten year notes and
shortly thereafter called for the redemption of its coupon convertible
subordinated notes, originally due in 2021. Virtually all of the
subordinated notes were converted into 15.1 million shares of TJX
common stock by May 5, 2009. The Company expects to use the proceeds
from the notes offering to repurchase TJX common stock under its stock
repurchase program.
4
Certain immaterial amounts in the prior period financial summary have
been reclassified from “selling general and administrative expenses”
to “cost of sales including buying and occupancy costs” to be
consistent with the fiscal 2010 presentation.
5
The following is a reconciliation of last year’s first quarter diluted
earnings per share, as reported on a GAAP basis, to the adjusted
diluted earnings per share referenced in our earnings release.

First Quarter Ended
May 2, April 26,

2009
2008
EPS from continuing operations, as reported $ 0.49 $ 0.44

Adjustments:
Tax benefit relating to reduction in FIN 48 tax liability - (0.02 )

Adjusted EPS from continuing operations $ 0.49 $ 0.42

The TJX Companies, Inc.
Sherry Lang
Senior Vice President
Investor and Public Relations
(508) 390-2323

Copyright Business Wire 2009