TJX 4Q profits slip as sales rise

By Don Hogsett -- Home Textiles Today, 3/5/2001 12:00:00 AM

FRAMINGHAM, MA -Clipped by softer margins, higher costs and sharply higher interest expense, fourth-quarter profits at The TJX Companies, the off-price giant, slipped by 1.3 percent, to $135.2 million from $137.0 million, despite a sales gain of almost 9 percent.

Sales in the all-important Christmas quarter moved up by 8.9 percent, to $2.8 billion from $2.5 billion last year, lifted by new store openings and strong results from Canadian and European operations.

For all of last year, profits rose by 3.1 percent, to $538.1 million from $521.7 million. Sales climbed higher by 8.9 percent, to $9.6 billion from $8.8 million.

In the core Marmaxx Group, comprising T.J. Maxx and Marshalls, same-store sales for all of last year rose a slender 2 percent, compared to an original plan of 3 percent and last year's 4 percent increase. Operating profit for the Marmaxx Group was $858 million, a hefty 10.4 percent of sales.

"Despite the highly promotional environment throughout most of 2000, our solid inventory management led to better-than-expected merchandise margins," said Edmond English, president and ceo. "This, along with savings in a number of expense categories, partially offset the impact of lower-than-planned sales." He added that the strength of the new T.J. Maxx and Marshalls stores was "instrumental in our decision to accelerate our store opening plans at Marmaxx to 75 stores in 2001 vs. our previous plan of 60 stores."

In a big lift to the top line, same-store sales for all of last year at Winners, in Canada, climbed by an above-plan 8 percent, while T.J. Maxx in Europe pushed same-store sales up another 8 percent, on top of last year's 12 percent gain.

The TJX Companies Inc.

a-Prior-year 12-month results included a $5.2 million charge stemming from a change in accounting. Excluding the one-time item, 12-month earnings rose by 2.1 percent, to $538.1 million from $526.8 million.