TJ Maxx 2009 Annual Report Download - page 43

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operating activities as an indicator of our performance or as a measure of liquidity. Presented below is selected financial
information related to our business segments:
U.S. Segments:
Marmaxx:
Dollars in millions 2010 2009 2008
Fiscal Year Ended January
Net sales $13,270.9 $12,362.1 $11,966.7
Segment profit $ 1,588.5 $ 1,155.8 $ 1,158.2
Segment profit as a percentage of net sales 12.0% 9.3% 9.7%
Percent increase in same store sales 7% 0% 1%
Stores in operation at end of period
T.J. Maxx 890 874 847
Marshalls 813 806 776
Total Marmaxx 1,703 1,680 1,623
Selling square footage at end of period (in thousands)
T.J. Maxx 20,890 20,543 20,025
Marshalls 20,513 20,388 19,759
Total Marmaxx 41,403 40,931 39,784
Net sales at Marmaxx increased 7% in fiscal 2010 as compared to fiscal 2009. Same store sales for Marmaxx were up
7% compared to being flat in fiscal 2009.
Sales at Marmaxx for fiscal 2010 reflected significantly increased customer traffic, partially offset by a decrease in the
value of the average transaction. Categories that posted particularly strong same store sales increases included juniors,
dresses, children’s apparel and footwear. Home categories improved significantly at Marmaxx during the year, with same
store sales increases above the chain average for fiscal 2010. Geographically, there were strong trends throughout the
country. Same store sales were strongest in the Midwest, West Coast and Southeast, while New England and Florida
trailed the chain average for fiscal 2010. We also saw a lift in the net sales of stores renovated during the year, and we
anticipate increasing our store renovation program in fiscal 2011.
Segment profit as a percentage of net sales (“segment margin” or “segment profit margin”) increased to 12.0% in
fiscal 2010 from 9.3% in fiscal 2009. This increase in segment margin for fiscal 2010 was primarily due to an increase in
merchandise margin of 2.4 percentage points driven by lower markdowns and higher markon. In addition, the 7%
increase in same store sales provided expense leverage on numerous costs as a percentage of net sales, particularly
occupancy costs, which improved by 0.3 percentage points. These increases were partially offset by an increase in
administrative costs as a percentage of sales, primarily due to higher accruals for performance-based incentive
compensation as a result of operating performance well ahead of objectives.
Segment margin decreased to 9.3% in fiscal 2009 from 9.7% in fiscal 2008. Segment margin was negatively
impacted by an increase in occupancy costs as a percentage of net sales (0.5 percentage points) due to deleverage on the
flat same store sales. This decrease was partially offset by an increase in merchandise margin (0.1 percentage point) due to
increased markon.
As of January 30, 2010, Marmaxx’s average per store inventories, including inventory on hand at its distribution
centers, were down 10% as compared to these inventory levels at the same time last year. Average per store inventories at
January 31, 2009 were down 4% compared to those of the prior year period. As of January 30, 2010, inventory
commitments (inventory on hand and merchandise on order) were essentially flat on a per store basis compared to the
end of fiscal 2009.
We expect to open approximately 53 new stores (net of closings) in fiscal 2011, increasing the Marmaxx store base by
3% and increasing its selling square footage by 3%.
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