þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
DELAWARE
(State or other jurisdiction of incorporation or organization) |
04-2207613
(I.R.S. Employer Identification No.) |
|
770 Cochituate Road Framingham, Massachusetts
(Address of principal executive offices) |
01701
(Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Thirteen Weeks Ended | ||||||||
October 31, | October 25, | |||||||
2009 | 2008 | |||||||
Net sales
|
$ | 5,244,946 | $ | 4,761,530 | ||||
|
||||||||
|
||||||||
Cost of sales, including buying and occupancy costs
|
3,802,179 | 3,536,990 | ||||||
Selling, general and administrative expenses
|
864,097 | 807,833 | ||||||
Provision (credit) for Computer Intrusion related costs
|
| (7,000 | ) | |||||
Interest expense, net
|
12,665 | 5,449 | ||||||
|
||||||||
|
||||||||
Income from continuing operations before provision for
income taxes
|
566,005 | 418,258 | ||||||
Provision for income taxes
|
218,206 | 164,141 | ||||||
|
||||||||
|
||||||||
Income from continuing operations
|
347,799 | 254,117 | ||||||
(Loss) from discontinued operations, net of income taxes
|
| (18,268 | ) | |||||
|
||||||||
Net income
|
$ | 347,799 | $ | 235,849 | ||||
|
||||||||
|
||||||||
Basic earnings per share:
|
||||||||
Income from continuing operations
|
$ | 0.82 | $ | 0.61 | ||||
(Loss) from discontinued operations, net of income taxes
|
$ | | $ | (0.04 | ) | |||
Net income
|
$ | 0.82 | $ | 0.57 | ||||
Weighted average common shares basic
|
421,654 | 417,107 | ||||||
|
||||||||
Diluted earnings per share:
|
||||||||
Income from continuing operations
|
$ | 0.81 | $ | 0.58 | ||||
(Loss) from discontinued operations, net of income taxes
|
$ | | $ | (0.04 | ) | |||
Net income
|
$ | 0.81 | $ | 0.54 | ||||
Weighted average common shares diluted
|
428,092 | 440,749 | ||||||
|
||||||||
Cash dividends declared per share
|
$ | 0.12 | $ | 0.11 |
2
Thirty-Nine Weeks Ended | ||||||||
October 31, | October 25, | |||||||
2009 | 2008 | |||||||
Net sales
|
$ | 14,346,698 | $ | 13,619,480 | ||||
|
||||||||
|
||||||||
Cost of sales, including buying and occupancy costs
|
10,609,827 | 10,261,376 | ||||||
Selling, general and administrative expenses
|
2,390,030 | 2,303,155 | ||||||
Provision (credit) for Computer Intrusion related costs
|
| (7,000 | ) | |||||
Interest expense, net
|
28,515 | 9,764 | ||||||
|
||||||||
|
||||||||
Income from continuing operations before provision for
income taxes
|
1,318,326 | 1,052,185 | ||||||
Provision for income taxes
|
499,752 | 387,995 | ||||||
|
||||||||
|
||||||||
Income from continuing operations
|
818,574 | 664,190 | ||||||
(Loss) from discontinued operations, net of income taxes
|
| (34,269 | ) | |||||
|
||||||||
Net income
|
$ | 818,574 | $ | 629,921 | ||||
|
||||||||
|
||||||||
Basic earnings per share:
|
||||||||
Income from continuing operations
|
$ | 1.95 | $ | 1.58 | ||||
(Loss) from discontinued operations, net of income taxes
|
$ | | $ | (0.09 | ) | |||
Net income
|
$ | 1.95 | $ | 1.49 | ||||
Weighted average common shares basic
|
419,398 | 421,371 | ||||||
|
||||||||
Diluted earnings per share:
|
||||||||
Income from continuing operations
|
$ | 1.91 | $ | 1.50 | ||||
(Loss) from discontinued operations, net of income taxes
|
$ | | $ | (0.08 | ) | |||
Net income
|
$ | 1.91 | $ | 1.42 | ||||
Weighted average common shares diluted
|
430,136 | 445,763 | ||||||
|
||||||||
Cash dividends declared per share
|
$ | 0.36 | $ | 0.33 |
3
4
Thirty-Nine Weeks Ended | ||||||||
October 31, | October 25, | |||||||
2009 | 2008 | |||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 818,574 | $ | 629,921 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities:
|
||||||||
Depreciation and amortization
|
318,940 | 301,025 | ||||||
Assets of discontinued operations disposed, net of cash
|
| 31,328 | ||||||
Loss on property disposals and impairment charges
|
6,764 | 22,504 | ||||||
Deferred income tax provision
|
130,539 | 26,866 | ||||||
Amortization of share-based compensation expense
|
40,831 | 38,096 | ||||||
Excess tax benefits from share-based compensation expense
|
(15,755 | ) | (18,971 | ) | ||||
Changes in assets and liabilities:
|
||||||||
(Increase) in accounts receivable
|
(16,466 | ) | (33,420 | ) | ||||
(Increase) in merchandise inventories
|
(577,469 | ) | (736,768 | ) | ||||
Decrease (increase) in prepaid expenses and other
current assets
|
15,876 | (24,416 | ) | |||||
Increase in accounts payable
|
522,079 | 349,702 | ||||||
Increase in accrued expenses and other liabilities
|
82,156 | 157,928 | ||||||
Other
|
(36,848 | ) | (16,960 | ) | ||||
|
||||||||
Net cash provided by operating activities
|
1,289,221 | 726,835 | ||||||
|
||||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Property additions
|
(318,948 | ) | (443,008 | ) | ||||
Purchase of short-term investments
|
(199,839 | ) | | |||||
Sales and maturities of short-term investments
|
126,741 | | ||||||
Proceeds from sale of discontinued operations, net of cash sold
|
| 4,804 | ||||||
Cash payments for costs associated with sale of discontinued
operations
|
| (5,647 | ) | |||||
Other
|
(5,802 | ) | 602 | |||||
|
||||||||
Net cash (used in) investing activities
|
(397,848 | ) | (443,249 | ) | ||||
|
||||||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of long-term debt
|
774,263 | | ||||||
Principal payments on current portion of long-term debt
|
(193,573 | ) | | |||||
Cash payments for debt issuance expenses
|
(7,202 | ) | | |||||
Proceeds from borrowing of short-term debt
|
| 105,930 | ||||||
Payments on capital lease obligation
|
(1,614 | ) | (1,491 | ) | ||||
Cash payments for repurchase of common stock
|
(530,501 | ) | (667,099 | ) | ||||
Proceeds from sale and issuance of common stock
|
154,095 | 141,133 | ||||||
Excess tax benefits from share-based compensation expense
|
15,755 | 18,971 | ||||||
Cash dividends paid
|
(147,403 | ) | (131,136 | ) | ||||
|
||||||||
Net cash provided by (used in) financing activities
|
63,820 | (533,692 | ) | |||||
|
||||||||
|
||||||||
Effect of exchange rate changes on cash
|
36,928 | (95,155 | ) | |||||
|
||||||||
|
||||||||
Net increase (decrease) in cash and cash equivalents
|
992,121 | (345,261 | ) | |||||
Cash and cash equivalents at beginning of fiscal year
|
453,527 | 732,612 | ||||||
|
||||||||
|
||||||||
Cash and cash equivalents at end of period
|
$ | 1,445,648 | $ | 387,351 | ||||
|
5
Accumulated | ||||||||||||||||||||||||
Common Stock | Additional | Other | ||||||||||||||||||||||
Par Value | Paid-In | Comprehensive | Retained | |||||||||||||||||||||
Shares | $1 | Capital | Income (Loss) | Earnings | Total | |||||||||||||||||||
Balance, January 31, 2009
|
412,822 | $ | 412,822 | $ | | $ | (217,781 | ) | $ | 1,939,516 | $ | 2,134,557 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||
Net income
|
| | | | 818,574 | 818,574 | ||||||||||||||||||
Gain due to foreign currency
translation adjustments
|
| | | 94,187 | | 94,187 | ||||||||||||||||||
Recognition of unfunded post
retirement liabilities
|
| | | (1,212 | ) | | (1,212 | ) | ||||||||||||||||
Recognition of prior service
cost and deferred gains
|
| | | 5,170 | | 5,170 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total comprehensive income
|
916,719 | |||||||||||||||||||||||
Cash dividends declared on common stock
|
| | | | (152,375 | ) | (152,375 | ) | ||||||||||||||||
Restricted stock awards granted
|
466 | 466 | (466 | ) | | | | |||||||||||||||||
Amortization of share-based
compensation expense
|
| | 40,831 | | | 40,831 | ||||||||||||||||||
Issuance of common stock upon
conversion of convertible debt
|
15,094 | 15,094 | 349,994 | | | 365,088 | ||||||||||||||||||
Issuance of common stock under stock
incentive plan and related tax effect
|
7,193 | 7,193 | 158,995 | | | 166,188 | ||||||||||||||||||
Common stock repurchased
|
(15,866 | ) | (15,866 | ) | (514,635 | ) | | | (530,501 | ) | ||||||||||||||
|
||||||||||||||||||||||||
Balance, October 31, 2009
|
419,709 | $ | 419,709 | $ | 34,719 | $ | (119,636 | ) | $ | 2,605,715 | $ | 2,940,507 | ||||||||||||
|
6
7
Thirteen | Thirty-Nine | |||||||
Weeks | Weeks | |||||||
Net sales
|
$ | 20,573 | $ | 148,040 | ||||
Segment profit (loss)
|
$ | 1,234 | $ | (25,524 | ) | |||
After- tax income (loss) from operations
|
$ | 687 | $ | (15,314 | ) |
Thirty-Nine Weeks Ended | ||||||||
October 31, | October 25, | |||||||
In thousands | 2009 | 2008 | ||||||
Balance at beginning of year
|
$ | 40,564 | $ | 46,076 | ||||
Additions to the reserve charged to net income:
|
||||||||
Interest accretion
|
1,321 | 1,365 | ||||||
Cash charges against the reserve:
|
||||||||
Lease-related obligations
|
(3,658 | ) | (5,873 | ) | ||||
Termination benefits and all other
|
(41 | ) | | |||||
|
||||||||
Balance at end of period
|
$ | 38,186 | $ | 41,568 | ||||
|
8
Thirteen Weeks Ended | ||||||||
October 31, | October 25, | |||||||
In thousands | 2009 | 2008 | ||||||
Net income
|
$ | 347,799 | $ | 235,849 | ||||
Other comprehensive income (loss):
|
||||||||
Loss due to foreign currency translation adjustments, net of
related tax effects
|
(6,113 | ) | (146,869 | ) | ||||
Gain on net investment hedge contracts, net of related tax effects
|
| 87,982 | ||||||
Gain on cash flow hedge contract, net of related tax effects
|
| 530 | ||||||
Recognition of prior service cost and deferred gains (losses)
|
2,267 | (92 | ) | |||||
Amount of cash flow hedge reclassified from other comprehensive
income to net income
|
| (170 | ) | |||||
|
||||||||
Total comprehensive income
|
$ | 343,953 | $ | 177,230 | ||||
|
Thirty-Nine Weeks Ended | ||||||||
October 31, | October 25, | |||||||
In thousands | 2009 | 2008 | ||||||
Net income
|
$ | 818,574 | $ | 629,921 | ||||
Other comprehensive income (loss):
|
||||||||
Gain (loss) due to foreign currency translation adjustments, net
of related tax effects
|
94,187 | (147,841 | ) | |||||
Gain on net investment hedge contracts, net of related tax effects
|
| 84,853 | ||||||
Gain on cash flow hedge contract, net of related tax effects
|
| 856 | ||||||
Recognition of unfunded post retirement liabilities
|
(1,212 | ) | | |||||
Recognition of prior service cost and deferred gains (losses)
|
5,170 | (905 | ) | |||||
Amount of cash flow hedge reclassified from other comprehensive
income to net income
|
| (380 | ) | |||||
|
||||||||
Total comprehensive income
|
$ | 916,719 | $ | 566,504 | ||||
|
9
Thirteen Weeks Ended | ||||||||
October 31, | October 25, | |||||||
In thousands, except per share data | 2009 | 2008 | ||||||
Basic earnings per share
|
||||||||
Income from continuing operations
|
$ | 347,799 | $ | 254,117 | ||||
Weighted average common shares outstanding for basic EPS
|
421,654 | 417,107 | ||||||
|
||||||||
Basic earnings per share continuing operations
|
$ | 0.82 | $ | 0.61 | ||||
|
||||||||
Diluted earnings per share
|
||||||||
Income from continuing operations
|
$ | 347,799 | $ | 254,117 | ||||
Add back: Interest expense on zero coupon convertible
subordinated notes, net of income taxes
|
| 1,203 | ||||||
|
||||||||
Income from continuing operations used for diluted EPS calculation
|
$ | 347,799 | $ | 255,320 | ||||
|
||||||||
|
||||||||
Shares for basic and diluted earnings per share calculations:
|
||||||||
Weighted average common shares outstanding for basic EPS
|
421,654 | 417,107 | ||||||
Assumed conversion/exercise/vesting of:
|
||||||||
Stock options and awards
|
6,438 | 6,788 | ||||||
Zero coupon convertible subordinated notes
|
| 16,854 | ||||||
|
||||||||
Weighted average common shares outstanding for diluted EPS
|
428,092 | 440,749 | ||||||
|
||||||||
|
||||||||
Diluted earnings per share continuing operations
|
$ | 0.81 | $ | 0.58 |
Thirty-Nine Weeks Ended | ||||||||
October 31, | October 25, | |||||||
In thousands, except per share data | 2009 | 2008 | ||||||
Basic earnings per share
|
||||||||
Income from continuing operations
|
$ | 818,574 | $ | 664,190 | ||||
Weighted average common shares outstanding for basic EPS
|
419,398 | 421,371 | ||||||
|
||||||||
Basic earnings per share continuing operations
|
$ | 1.95 | $ | 1.58 | ||||
|
||||||||
Diluted earnings per share
|
||||||||
Income from continuing operations
|
$ | 818,574 | $ | 664,190 | ||||
Add back: Interest expense on zero coupon convertible
subordinated notes, net of income taxes
|
1,073 | 3,600 | ||||||
|
||||||||
Income from continuing operations used for diluted EPS calculation
|
$ | 819,647 | $ | 667,790 | ||||
|
||||||||
|
||||||||
Shares for basic and diluted earnings per share calculations:
|
||||||||
Weighted average common shares outstanding for basic EPS
|
419,398 | 421,371 | ||||||
Assumed conversion/exercise/vesting of:
|
||||||||
Stock options and awards
|
5,537 | 7,504 | ||||||
Zero coupon convertible subordinated notes
|
5,201 | 16,888 | ||||||
|
||||||||
Weighted average common shares outstanding for diluted EPS
|
430,136 | 445,763 | ||||||
|
||||||||
|
||||||||
Diluted earnings per share continuing operations
|
$ | 1.91 | $ | 1.50 |
10
11
12
October 31, | ||||
In thousands | 2009 | |||
Current assets
|
$ | 6,398 | ||
Non-current assets
|
947 | |||
Current liabilities
|
(5,176 | ) | ||
Non-current liabilities
|
| |||
|
||||
Net fair value asset
|
$ | 2,169 | ||
|
Amount of Gain | ||||||||||
(Loss) | ||||||||||
Location of Gain (Loss) | Recognized in | |||||||||
Recognized in Income by | Income by | |||||||||
In thousands | Derivative | Derivative | ||||||||
Derivatives designated as hedging instruments
|
||||||||||
Fair value hedges
|
||||||||||
|
||||||||||
Interest rate swap fixed to floating on notional of $50,000
|
Interest expense, net | US$ | 892 | |||||||
Interest rate swap fixed to floating on notional of $50,000
|
Interest expense, net | US$ | 1,176 | |||||||
Intercompany balances, primarily short-term debt and related interest
|
Selling, general and administrative expenses | US$ | (6,491 | ) | ||||||
Derivatives not designated as hedging instruments
|
||||||||||
Diesel contracts
|
Cost of sales, including buying and occupancy costs | US$ | 4,349 | |||||||
Merchandise purchase commitments
|
Cost of sales, including buying and occupancy costs | US$ | (3,073 | ) | ||||||
|
||||||||||
Loss Recognized in Income
|
(3,147 | ) | ||||||||
|
13
Thirteen Weeks Ended | ||||||||
October 31, | October 25, | |||||||
In thousands | 2009 | 2008 | ||||||
Net sales:
|
||||||||
U.S. segments:
|
||||||||
Marmaxx
|
$ | 3,380,543 | $ | 3,058,207 | ||||
HomeGoods
|
452,004 | 382,864 | ||||||
A.J. Wright
|
197,841 | 163,713 | ||||||
International segments:
|
||||||||
TJX Canada
|
611,485 | 576,971 | ||||||
TJX Europe
|
603,073 | 579,775 | ||||||
|
||||||||
|
$ | 5,244,946 | $ | 4,761,530 | ||||
|
||||||||
|
||||||||
Segment profit (loss):
|
||||||||
U.S. segments:
|
||||||||
Marmaxx
|
$ | 422,754 | $ | 278,661 | ||||
HomeGoods
|
39,454 | 14,675 | ||||||
A.J. Wright
|
1,273 | (788 | ) | |||||
International segments:
|
||||||||
TJX Canada
|
113,011 | 109,782 | ||||||
TJX Europe
|
48,790 | 48,212 | ||||||
|
||||||||
|
625,282 | 450,542 | ||||||
|
||||||||
General corporate expenses
|
46,612 | 33,835 | ||||||
Provision (credit) for Computer Intrusion related costs
|
| (7,000 | ) | |||||
Interest expense, net
|
12,665 | 5,449 | ||||||
|
||||||||
Income from continuing operations before provision for income taxes
|
$ | 566,005 | $ | 418,258 | ||||
|
14
Thirty-Nine Weeks Ended | ||||||||
October 31, | October 25, | |||||||
In thousands | 2009 | 2008 | ||||||
Net sales:
|
||||||||
U.S. segments:
|
||||||||
Marmaxx
|
$ | 9,464,356 | $ | 8,817,687 | ||||
HomeGoods
|
1,256,736 | 1,096,726 | ||||||
A.J. Wright
|
559,162 | 478,432 | ||||||
International segments:
|
||||||||
TJX Canada
|
1,531,248 | 1,604,049 | ||||||
TJX Europe
|
1,535,196 | 1,622,586 | ||||||
|
||||||||
|
$ | 14,346,698 | $ | 13,619,480 | ||||
|
||||||||
|
||||||||
Segment profit (loss):
|
||||||||
U.S. segments:
|
||||||||
Marmaxx
|
$ | 1,111,775 | $ | 855,222 | ||||
HomeGoods
|
79,559 | 25,738 | ||||||
A.J. Wright
|
7,057 | (2,438 | ) | |||||
International segments:
|
||||||||
TJX Canada
|
180,709 | 211,068 | ||||||
TJX Europe
|
82,803 | 63,420 | ||||||
|
||||||||
|
1,461,903 | 1,153,010 | ||||||
|
||||||||
General corporate expenses
|
115,062 | 98,061 | ||||||
Provision (credit) for Computer Intrusion related costs
|
| (7,000 | ) | |||||
Interest expense, net
|
28,515 | 9,764 | ||||||
|
||||||||
Income from continuing operations before provision for income taxes
|
$ | 1,318,326 | $ | 1,052,185 | ||||
|
Pension | Pension | |||||||||||||||
(Funded Plan) | (Unfunded Plan) | |||||||||||||||
Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
October 31, | October 25, | October 31, | October 25, | |||||||||||||
In thousands | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Service cost
|
$ | 6,406 | $ | 7,210 | $ | 274 | $ | 276 | ||||||||
Interest cost
|
7,708 | 7,757 | 730 | 1,064 | ||||||||||||
Expected return on plan assets
|
(7,157 | ) | (8,594 | ) | | | ||||||||||
Amortization of prior service cost
|
4 | 4 | 31 | 32 | ||||||||||||
Recognized actuarial losses
|
3,439 | | 285 | 671 | ||||||||||||
Settlement cost
|
| | 579 | | ||||||||||||
|
||||||||||||||||
Total expense
|
$ | 10,400 | $ | 6,377 | $ | 1,899 | $ | 2,043 | ||||||||
|
15
Pension | Pension | |||||||||||||||
(Funded Plan) | (Unfunded Plan) | |||||||||||||||
Thirty-Nine Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||
October 31, | October 25, | October 31, | October 25, | |||||||||||||
In thousands | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Service cost
|
$ | 22,537 | $ | 22,804 | $ | 821 | $ | 801 | ||||||||
Interest cost
|
23,490 | 21,534 | 2,189 | 2,524 | ||||||||||||
Expected return on plan assets
|
(21,167 | ) | (25,777 | ) | | | ||||||||||
Amortization of prior service cost
|
12 | 33 | 94 | 94 | ||||||||||||
Recognized actuarial losses
|
10,242 | | 854 | 953 | ||||||||||||
Settlement cost
|
| | 1,737 | | ||||||||||||
|
||||||||||||||||
Total expense
|
$ | 35,114 | $ | 18,594 | $ | 5,695 | $ | 4,372 | ||||||||
|
16
Level 1:
|
Unadjusted quoted prices in active markets for identical assets or liabilities. | |
|
||
Level 2:
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are less active, or inputs other than quoted prices that are observable for the asset or liability. | |
|
||
Level 3:
|
Unobservable inputs for the asset or liability. |
17
October 31, | January 31, | October 25, | ||||||||||
In thousands | 2009 | 2009 | 2008 | |||||||||
Level 1
|
||||||||||||
Assets:
|
||||||||||||
Cash equivalents
|
$ | 830,405 | $ | 161,592 | $ | 60,893 | ||||||
Executive savings plan
|
52,981 | 40,636 | 39,771 | |||||||||
|
||||||||||||
Level 2
|
||||||||||||
Assets:
|
||||||||||||
Foreign currency exchange contracts
|
$ | 5,855 | $ | 9,534 | $ | 154,838 | ||||||
Interest rate swaps
|
1,490 | 1,859 | 1,250 | |||||||||
|
||||||||||||
Liabilities:
|
||||||||||||
Foreign currency exchange contracts
|
$ | 4,594 | $ | 1,435 | $ | 65,777 | ||||||
Diesel fuel contracts
|
582 | 4,931 | | |||||||||
Interest rate swaps
|
| | 386 |
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Compared to
The Thirteen Weeks (third quarter) and Thirty-Nine Weeks (nine months) Ended October 25, 2008
Consolidated same store sales increased 7% for the third quarter and increased 5% for
the nine-month period over last years comparable periods. Same store sales growth was
driven by significant increases in customer traffic and strong performance by virtually all
of our businesses.
Net sales increased 10% to $5.2 billion for the third quarter and 5% to $14.3 billion
for the nine-month period over last years comparable periods. Stores in operation and
total selling square footage were both up 4% as of October 31, 2009 when compared to the
same period last year. For both the quarter and nine-month periods of fiscal 2010,
increases in consolidated same store sales and the increases in our number of stores in
operation were partially offset by foreign currency exchange rates, which negatively
impacted sales growth.
Our fiscal 2010 third quarter pre-tax margin (the ratio of pre-tax income to net sales)
was 10.8% compared to 8.8% for the same period last year. Year-to-date, our pre-tax margin
was 9.2% compared to 7.7% for the same period last year. The improvement in both the third
quarter and nine-month periods of fiscal 2010 was primarily driven by increased merchandise
margins, which were achieved through well executed buying and faster turning inventories.
Our cost of sales ratios improved in both the third quarter and nine-month periods,
primarily due to improved merchandise margins, partially offset by the negative impact of
the mark-to-market adjustment of our inventory-related hedges. Selling, general and
administrative expense ratios decreased for both the third quarter and nine-month periods,
due to levering of expenses.
Income from continuing operations for the third quarter of fiscal 2010 was $347.8
million, or $0.81 per diluted share compared to $254.1 million, or $0.58 per diluted share,
in last years third quarter. Income
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from continuing operations for the nine months ended October 31, 2009 was $818.6 million, or
$1.91 per diluted share compared to $664.2 million, or $1.50 per diluted share, for the same
period last year. Diluted earnings per share from continuing operations for the nine months
ended last year benefited by $0.02 from tax related reserve adjustments. Both the third
quarter and nine months ended October 25, 2008 benefited by $0.01 for adjustments related to
the provision for costs associated with the Computer Intrusion that was discovered in fiscal
2007.
During the third quarter of fiscal 2010, we repurchased 8.2 million shares of our common
stock at a cost of $304 million, and for the first nine months of fiscal 2010, we
repurchased 16.1 million shares of our common stock at a cost of $541 million. Diluted
earnings per share reflect the benefit of the stock repurchase program. In conjunction
with a $375 million notes offering in our fiscal 2010 first quarter, we called for the
redemption of our zero 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. We used the net proceeds from the $375 million notes offering to
repurchase common stock under our stock repurchase program.
Consolidated average per store inventories, including inventory on hand at our
distribution centers, as of October 31, 2009 were down 5% from the prior year and were down
6% as of October 25, 2008 from the comparable prior years quarter end. Excluding the
impact of foreign currency exchange, average per store inventories, including inventory on
hand at our distribution centers, as of October 31, 2009 were down 7% compared to the prior
years quarter end.
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Percentage of Net Sales
Percentage of Net Sales
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31,
October 25,
October 31,
October 25,
2009
2008
2009
2008
100.0
%
100.0
%
100.0
%
100.0
%
72.5
74.3
74.0
75.3
16.5
17.0
16.7
16.9
(0.1
)
(0.1
)
0.2
0.1
0.2
0.1
10.8
%
8.8
%
9.2
%
7.7
%
*
Due to rounding, the individual items may not sum to Income from continuing operations before provision for income taxes.
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Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31,
October 25,
October 31,
October 25,
Dollars in millions
2009
2008
2009
2008
$
3,380.5
$
3,058.2
$
9,464.4
$
8,817.7
$
422.8
$
278.7
$
1,111.8
$
855.2
12.5
%
9.1
%
11.7
%
9.7
%
9
%
5
%
1
%
889
872
820
807
1,709
1,679
20,859
20,500
20,658
20,430
41,517
40,930
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Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31,
October 25,
October 31,
October 25,
Dollars in millions
2009
2008
2009
2008
$
452.0
$
382.9
$
1,256.7
$
1,096.7
$
39.5
$
14.7
$
79.6
$
25.7
8.7
%
3.8
%
6.3
%
2.3
%
13
%
(5
)%
7
%
(1
)%
324
315
6,360
6,185
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31,
October 25,
October 31,
October 25,
Dollars in millions
2009
2008
2009
2008
$
197.8
$
163.7
$
559.2
$
478.4
$
1.3
$
(0.8
)
$
7.1
$
(2.4
)
0.6
%
(0.5
)%
1.3
%
(0.5
)%
11
%
5
%
10
%
6
%
148
135
2,966
2,681
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Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31,
October 25,
October 31,
October 25,
U.S. Dollars in millions
2009
2008
2009
2008
$
611.5
$
577.0
$
1,531.2
$
1,604.0
$
113.0
$
109.8
$
180.7
$
211.1
18.5
%
19.0
%
11.8
%
13.2
%
1
%
5
%
1
%
5
%
211
201
79
75
290
276
4,847
4,622
1,527
1,437
6,374
6,059
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Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31,
October 25,
October 31,
October 25,
U.S. Dollars in millions
2009
2008
2009
2008
$
603.1
$
579.8
$
1,535.2
$
1,622.6
$
48.8
$
48.2
$
82.8
$
63.4
8.1
%
8.3
%
5.4
%
3.9
%
1
%
4
%
4
%
5
%
262
235
14
7
276
242
6,089
5,379
222
107
6,311
5,486
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 31,
October 25,
October 31,
October 25,
Dollars in millions
2009
2008
2009
2008
$
46.6
$
33.8
$
115.1
$
98.1
Table of Contents
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Payments Due by Period
Less Than
1-3
3-5
More Than
Total
1 Year
Years
Years
5 Years
$
1,343,540
$
250,671
$
85,725
$
85,725
$
921,419
Table of Contents
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Maximum Number (or
Approximate Dollar
Total Number of Shares
Value) of Shares that
Total
Purchased as Part of a
May Yet be Purchased
Number of Shares
Average Price Paid
Publicly Announced
Under the Plans or
Repurchased
(1)
Per Share
(2)
Plan or Program
(3)
Programs
(3)
1,807,000
$
35.69
1,807,000
$
443,690,304
3,168,900
$
36.67
3,168,900
$
1,327,492,872
3,194,965
$
38.56
3,194,965
$
1,204,300,070
8,170,865
8,170,865
(1)
All shares were purchased as part of publicly announced plans.
(2)
Average price paid per share includes commissions and is rounded to the nearest two decimal
places.
(3)
The $304 million in stock repurchases during the fiscal 2010 third quarter were made under
the multi-year stock repurchase plan of $1 billion authorized by TJXs Board of Directors in
February 2008, under which $204 million remained as of October 31, 2009. In September 2009,
TJXs Board of Directors approved a multi-year stock purchase plan of an additional $1 billion,
all of which remained available as of October 31, 2009. Neither stock repurchase plan has an
expiration date.
Table of Contents
10.1
12.1
12.2
31.1
31.2
32.1
32.2
101
Table of Contents
THE TJX COMPANIES, INC.
/s/ Jeffrey G. Naylor
Table of Contents
Exhibit Number
Description of Exhibit
Letter Agreement dated as of
September 17, 2009 with Ernie Herrman.
Form of Non-Qualified Stock Option Certificate Granted under the Stock Incentive Plan for
certain executives.
Form of Non-Qualified Stock Option Certificate Granted under the Stock Incentive Plan for
employees.
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of
2002.
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes- Oxley Act of
2002.
The following materials from The TJX Companies, Inc.s Quarterly Report on Form 10-Q for the
quarter ended October 31, 2009, formatted in XBRL (Extensible Business Reporting Language):
(i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the
Consolidated Statements of Cash Flows, (iv) the Consolidated Statement of Shareholders
Equity, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text.
The TJX Companies, Inc.
|
||||
By: | /s/ Carol Meyrowitz | |||
Title: | President & CEO | |||
/s/ Ernie Herrman
|
||
|
||
Date: October 15, 2009
|
1.
|
Optionee: | |||
|
||||
2.
|
Number of Shares of Common Stock of the Company Subject to this Option: | |||
|
||||
3.
|
Date of Grant: | |||
|
||||
4.
|
Expiration Date: | |||
|
||||
5.
|
Option Price: | [ ] per share, payable by (i) certified or bank check, (ii) through a broker-assisted exercise as described in the Plan, or (iii) shares of Common Stock of the Company not then subject to restrictions under any Company Plan (which shares, if acquired directly from the Company, must have been held for at least six months), or a combination of (i), (ii) and (iii). | ||
|
||||
6.
|
Exercise of Option: | This option shall become exercisable in annual installments as specified below: |
This option may be exercised to the extent it has become exercisable in full at any time prior to the Expiration Date, or in part from time to time prior to the Expiration Date. | ||
7. | Termination of Employment: In the event of the termination of employment of the optionee or in the event of the designation of the optionee as an inactive employee by reason of Disability, this option may thereafter be exercised during the following applicable period (or until the Expiration Date, if earlier) but only to the extent it was exercisable at the earlier of such termination or designation (except as otherwise indicated below): |
|
Reason for Termination or Designation | Subsequent Period for Exercise |
8. | Partial Acceleration of Exercisability Upon Death and Disability: Subject to Paragraph 7 above, in the event of the termination of employment due to the death or Disability of the optionee, or in the event of the designation of the optionee as an inactive employee by reason of Disability, this option shall be exercisable as to the number of shares for which it could have been exercised immediately prior to such termination or designation or, if greater, (i) the total number of shares subject to this option multiplied by a fraction the numerator of which shall be the number of days between the grant of this option and such termination or designation and the denominator of which shall be the number of days between the grant of this option and the date upon which this option, by its terms, would have become fully exercisable, minus (ii) the number of shares, if any, previously purchased under this option, provided, however, that no shares may be purchased under this option in the event that such termination or designation occurs within three months after the grant of this option. | |
9. | Change of Control: This option unless previously terminated or expired shall automatically become fully exercisable upon the occurrence of a Change of Control. | |
10. | Automatic Exercise in Certain Circumstances: To the extent any portion of this option is otherwise exercisable but remains unexercised at the close of business on the Expiration Date (or on the date of the earlier expiration of the period for exercising such portion of the option following a termination of employment or a designation as an inactive employee by reason of Disability), and if on such date the Fair Market Value of the shares subject to such exercisable but unexercised portion of this option exceeds the aggregate consideration that would have been required to be paid to purchase such shares had such portion of this option been exercised, the optionee will automatically be paid, in cancellation of such portion of the option, an amount of Company Stock having a Fair Market Value equal to such excess, if any. | |
11. | Limited Transferability: This option may not be transferred by the optionee other than by will or by the laws of descent and distribution, and is exercisable during the optionees lifetime only by the optionee. | |
12. | Withholding: No shares will be delivered pursuant to the exercise or automatic exercise of this option unless and until the person exercising the option has paid to the Company any taxes required to be withheld by the Company as a consequence of such exercise or automatic exercise, or otherwise provided to the Companys satisfaction for the payment of such taxes. |
THE TJX COMPANIES, INC. | ||||||
|
||||||
|
BY: | |||||
|
|
1. | Date of Grant : | |
2. | Expiration Date : | |
3. | Exercise of Option : | |
This option may be exercised to the extent it has become exercisable at any time prior to the Expiration Date. | ||
4. | Termination of Employment : In the event of the termination of employment of the optionee or in the event of the designation of the optionee as an inactive employee by reason of Disability, this option may thereafter be exercised during the following applicable period (or until the Expiration Date, if earlier) but only to the extent it was exercisable at the earlier of such termination or designation (except as otherwise indicated below): |
|
Reason for Termination or Designation | Subsequent Period for Exercise |
5. | Partial Acceleration of Exercisability Upon Death and Disability : Subject to Paragraph 4 above, in the event of the termination of employment due to the death or Disability of the optionee, or in the event of the designation of the optionee as an inactive employee by reason of Disability, this option shall be exercisable as to the number of shares for which it could have been exercised immediately prior to such termination or designation or, if greater, (i) the total number of shares subject to this option multiplied by a fraction the numerator of which shall be the number of days between the grant of this option and such termination or designation and the denominator of which shall be the number of days between the grant of this option and the date upon which this option, by its terms, would have become fully exercisable, minus (ii) the number of shares, if any, previously purchased under this option, provided, however, that no shares may be purchased under this option in the event that such termination or designation occurs within three months after the grant of this option. | |
6. | Change of Control : This option unless previously terminated or expired shall automatically become fully exercisable upon the occurrence of a Change of Control. | |
7. | Automatic Exercise in Certain Circumstances : To the extent any portion of this option is otherwise exercisable but remains unexercised at the close of business on the Expiration Date (or on the date of the earlier expiration of the period for exercising such portion of the option following a termination of employment or a designation as an inactive employee by reason of Disability), and if on such date the Fair Market Value of the shares subject to such exercisable but unexercised portion of this option exceeds the aggregate consideration that would have been required to be paid to purchase such shares had such portion of this option been exercised, the optionee will automatically be paid, in cancellation of such portion of the option, an amount of Company Stock having a Fair Market Value equal to such excess, if any. | |
8. | Limited Transferability : This option may not be transferred by the optionee other than by will or by the laws of descent and distribution, and is exercisable during the optionees lifetime only by the optionee. | |
9. | Withholding : No shares will be delivered pursuant to the exercise or automatic exercise of this option unless and until the person exercising the option has paid to the Company any taxes required to be withheld by the Company as a consequence of such exercise or automatic exercise, or otherwise provided to the Companys satisfaction for the payment of such taxes. |
1. | I have reviewed this quarterly report on Form 10-Q of The TJX Companies, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
|
/s/ Carol Meyrowitz | |||||
Date: December 1, 2009
|
Name: |
|
||||
|
Title: | President and Chief Executive Officer |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
|
/s/ Jeffrey G. Naylor | |||||
Date: December 1, 2009
|
Name: |
|
||||
|
Title: | Executive Vice President, | ||||
|
Chief Financial and Administrative Officer |
1. | the Companys Form 10-Q for the fiscal quarter ended October 31, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Companys Form 10-Q for the fiscal quarter ended October 31, 2009 fairly presents, in all material respects, the financial condition and results of operations of the Company. |
|
/s/ Carol Meyrowitz | |||||
|
Name: | Carol Meyrowitz | ||||
|
Title: | President and Chief Executive Officer |
1. | the Companys Form 10-Q for the fiscal quarter ended October 31, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Companys Form 10-Q for the fiscal quarter ended October 31, 2009 fairly presents, in all material respects, the financial condition and results of operations of the Company. |
|
/s/ Jeffrey G. Naylor | |||||
|
Name: | Jeffrey G. Naylor | ||||
|
Title: | Executive Vice President, | ||||
|
Chief Financial and Administrative Officer |