TJ Maxx 1999 Annual Report Download - page 23

T h e T J X C o m p a n i e s , I n c .
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S O F
R E S U L T S O F O P E R A T I O N S A N D F I N A N C I A L C O N D I T I O N
A cc o u n t i n g C h a n ge
In February 2000,TJX announced it had adopted the provisions of the Securities and Exchange Commission’s
Staff Accounting Bulletin (SAB) No. 101, “Revenue Recognition in Financial Statements,” issued in December
1999.The SAB requires that “layaway sales” (when a customer puts merchandise on hold for pick up within 30
days) be recorded as a sale at the time the customer picks up the merchandise.We had previously recorded such
sales at the time the customer paid a deposit and had the merchandise put on hold.TJX restated its earnings for
the first three quarters of the fiscal year ended January 29, 2000 and recorded a $5.2 million, or $.02 per share,
non-cash charge for the cumulative effect of the accounting change, effective January 31, 1999. The accounting
change simply defers the recognition of the layaway sales, and on a full year basis has little impact on our results
of operations. However, due to the seasonal influences of the business the accounting change results in a shift of
sales and earnings among our quarterly reporting periods. Presented below is a summary of the restated income
statement data for the first three quarters of the fiscal year ended January 29, 2000:
13 Week s En ded 13 W ee k s En ded 13 Week s End e d
D olla rs In Th o usa nd s M ay 1, 1999 Ju ly 3 1, 1 999 O ct o ber 30 , 19 9 9
E x cept Pe r S ha re A m o u n t s A s R eport ed A s R e stated A s Re ported A s R e stated A s Re ported A s R e stated
Net sales $1,952,084 $1,930,506 $2,098,644 $2,102,851 $2,257,094 $2,235,054
Cost of sales, including buying
and occupancy costs 1,431,479 1,418,792 1,583,132 1,585,248 1,659,885 1,646,270
Income before cumulative effect
of accounting change 127,662 122,274 114,679 115,881 156,974 151,717
Cumulative effect of accounting change,
net of income taxes – (5,154) – – – –
Net income $ 127,662 $ 117,120 $ 114,679 $ 115,881 $ 156,974 $ 151,717
Diluted earnings per share:
Income before cumulative effect
of accounting change $.39 $.38 $.36 $.36 $.50 $.48
Net income $.39 $.36 $.36 $.36 $.50 $.48
R e su l t s o f O p e ra t i o n s
C o n t in u in g O p e ra t i o n s : Income from continuing operations before extraordinary item and cumulative effect
of accounting change (“income from continuing operations”) was $526.8 million in fiscal 2000, $433.2 million
in fiscal 1999, and $306.6 million in fiscal 1998. Income from continuing operations per share was $1.66 in fiscal
2000, versus $1.29 in fiscal 1999 and $.88 in fiscal 1998.
Net sales for fiscal 2000 were $8.80 billion, an increase of 10.6% over net sales of $7.95 billion in fiscal 1999.
Net sales for fiscal 1999 increased 7.6% over net sales of $7.39 billion in fiscal 1998. Fiscal 1998 included 53
weeks while fiscal 2000 and 1999 each included 52 weeks.The increase in net sales for fiscal 1999 over a compa-
rable 52-week period in fiscal 1998 was 9.0% . Consolidated same store sales on a 52-week basis increased 5%
in fiscal 2000 and fiscal 1999. Percentage increases in same store sales, on a divisional basis, are as follows:
Fi scal Ye a r E n d e d
Ja n u a ry 2 9 , Ja n u a ry 3 0,
2 0 0 0 1 9 9 9
Marmaxx +4% +5%
Winners +8% +13%
T.K. Maxx +12% +12%
HomeGoods +13% + 9%