TJ Maxx 2009 Annual Report Download - page 46

TJX Europe:
U.S. Dollars in millions 2010 2009 2008
Fiscal Year Ended January
Net sales $2,275.4 $2,242.1 $2,216.2
Segment profit $ 164.0 $ 137.6 $ 127.2
Segment profit as a percentage of net sales 7.2% 6.1% 5.7%
Percent increase in same store sales 5% 4% 6%
Stores in operation at end of period
T.K. Maxx 263 235 226
HomeSense 14 7—
Total 277 242 226
Selling square footage at end of period (in thousands)
T.K. Maxx 6,106 5,404 5,096
HomeSense 222 107 —
Total 6,328 5,511 5,096
Net sales for TJX Europe increased in fiscal 2010 to $2.3 billion compared to $2.2 billion in fiscal 2009. Currency
exchange rate translation reduced fiscal 2010 sales by approximately $252 million, or 11%, as compared to fiscal 2009.
Same store sales increased 5% for fiscal 2010 compared to a 4% increase in fiscal 2009. Segment profit for fiscal 2010
increased 19% to $164 million, and segment profit margin increased 1.1 percentage points to 7.2%. The increase in
segment margin for fiscal 2010 reflects improved merchandise margins and leverage of expenses on the 5% same store
sales increase, partially offset by costs of operations in Germany and Poland along with higher accruals for performance-
based incentive compensation. We are encouraged by the performance of our stores in Germany and Poland and our
HomeSense stores in the U.K., but as newer operations, they reduce the segment margin generated by the more
established T.K. Maxx stores in the U.K. and Ireland. We also invested in strengthening the shared services infrastructure
for our planned European expansion. Foreign currency had an immaterial impact on fiscal 2010 segment profit, while
segment profit for fiscal 2009 included a favorable mark-to-market adjustment of $10 million, primarily relating to the
conversion of Euros to Pound Sterling.
Net sales for TJX Europe for fiscal 2009 were up 1% compared to fiscal 2008. Currency exchange rate translation
negatively affected fiscal 2009 net sales by approximately $282 million. Segment profit for fiscal 2009 increased 8% to
$137.6 million, and segment margin increased 0.4 percentage points to 6.1% compared to fiscal 2008. Currency
exchange rate translation negatively affected segment profit by approximately $26 million in fiscal 2009 as compared to
fiscal 2008. The increase in segment margin in fiscal 2009 reflected improved merchandise margins, partially offset by an
increase in occupancy costs as a percentage of sales and the cost of operations in Germany. During fiscal 2009, T.K. Maxx
added 4 more stores in Germany, following the opening of its first 5 stores in Germany in fiscal 2008. In fiscal 2009, T.K.
Maxx also introduced the HomeSense concept into the U.K. with 7 new stores.
As a result of the performance of TJX Europe and the opportunity for off-price retail in Europe, we intend to
increase the rate of expansion in Europe. In fiscal 2011, we plan to open a net of 48 new T.K. Maxx stores in Europe and
a net of 6 HomeSense stores in the U.K. for a net total of 54 new stores in Europe. We also plan to expand total TJX
Europe selling square footage by 16%.
General Corporate Expense:
Dollars in millions 2010 2009 2008
Fiscal Year Ended January
General corporate expense $166.4 $140.0 $139.4
General corporate expense for segment reporting purposes represents those costs not specifically related to the
operations of our business segments and is included in selling, general and administrative expenses. The increase in
general corporate expense in fiscal 2010 compared to fiscal 2009 is primarily due to an $18 million contribution to the
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