TJ Maxx 2014 Annual Report Download - page 47

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TJX Europe
Fiscal Year Ended
U.S. Dollars in millions
January 31,
2015
February 1,
2014
February 2,
2013
Net sales $4,092.3 $3,621.6 $3,283.9
Segment profit $ 337.4 $ 275.5 $ 215.7
Segment profit as a percentage of net sales 8.2% 7.6% 6.6%
Increase in same store sales 3% 6% 10%
Stores in operation at end of period
T.K. Maxx 407 371 343
HomeSense 33 28 24
Total 440 399 367
Selling square footage at end of period (in thousands)
T.K. Maxx 9,109 8,383 7,830
HomeSense 545 464 411
Total 9,654 8,847 8,241
Net sales for TJX Europe increased 13% in fiscal 2015 to $4.1 billion compared to $3.6 billion in fiscal 2014
on top of a 10% increase in fiscal 2014 compared to fiscal 2013. The increase in fiscal 2015 reflected an 8%
increase from new store sales, 3% from same store sales and a 2% favorable impact from currency translation.
The fiscal 2015 same store sales increase of 3% compares to an increase of 6% in fiscal 2014 and a 10%
increase in fiscal 2013. The increase in same store sales for fiscal 2015 was driven by an increase in the value of
the average transaction along with an increase in customer traffic. Net sales for TJX Europe increased 10% in
fiscal 2014 to $3.6 billion compared to $3.3 billion in fiscal 2013. Currency translation had an immaterial impact
on fiscal 2014 sales growth.
Segment profit increased 22% to $337.4 million for fiscal 2015, and segment profit margin increased to
8.2% compared to 7.6% in fiscal 2014. The improvement in segment margin was primarily due to an increase in
merchandise margins and expense leverage on same store sales, particularly buying and occupancy costs. The
increase in segment margin was also largely due to the positive impact of the mark-to-market adjustment on
inventory-related derivatives. These margin improvements were partially offset by an increase in store payroll
costs as a percentage of sales as well as investments in talent and research to open stores in two new countries
in fiscal 2016.
Segment profit increased 28% to $275.5 million for fiscal 2014, and segment margin increased to 7.6%. The
improvement in segment margin was due primarily to expense leverage on strong same store sales, particularly
buying and occupancy costs and a lower incentive compensation accrual. The mark-to-market adjustment on
inventory-related derivatives had a negative impact of 0.3 percentage points and the 53rd week in fiscal 2013 had
a negative impact of 0.2 percentage points on the year-over-year comparison of segment margin for fiscal 2014.
We expect to add approximately 50 stores (net of closings) in Europe in fiscal 2015 and plan to increase
selling square footage by approximately 10%.
General Corporate Expense:
Fiscal Year Ended
Dollars in millions
January 31,
2015
February 1,
2014
February 2,
2013
General corporate expense $324.4 $329.5 $335.0
General corporate expense for segment reporting purposes represents those costs not specifically related to
the operations of our business segments. Virtually all general corporate expenses are included in selling, general
and administrative expenses. Overall general corporate expense in fiscal 2015 decreased slightly from the prior
year. This decrease reflects a favorable adjustment to our reserve for former operations in fiscal 2015 as well as
31