TJ Maxx 2015 Annual Report Download - page 46

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increase in customer traffic. Same store sales increases for home fashions were above the chain average while
apparel overall was below the chain average. Within apparel, jewelry and accessories and activewear were well
above the average. Geographically, same store sales increases were strongest in the Southeast and Southwest.
Segment margin in fiscal 2016 was 14.3% compared to 14.6% in fiscal 2015. Marmaxx results for fiscal
2016 reflect an increase in merchandise margin and occupancy expense leverage on same store sales growth of
approximately 0.6 percentage points. However, these gains were offset by higher distribution costs, reflecting
the increase in units processed as well as higher store payroll, primarily due to our wage initiative, and
processing more units at the store level. In addition, tjmaxx.com and STP (our U.S. e-commerce businesses)
had a negative impact on year-over-year segment margin comparisons of 0.3 percentage points. Our
e-commerce businesses operate at lower profit margins and at STP, we incurred additional costs as we work to
transition this business to be less promotional to align more closely with our off-price model and to adjust its
merchandise mix. Overall, e-commerce sales represent less than 2% of Marmaxx’s net sales.
Segment margin in fiscal 2015 was 14.6%, flat compared to fiscal 2014. Improvements in merchandise
margin as well as a reduction in administrative costs and insurance costs as a percentage of sales were offset by
the impact of our e-commerce businesses and expense deleverage, primarily occupancy costs, on the 1% same
store sales growth.
In fiscal 2017, we expect to open approximately 60 Marmaxx stores and increase selling square footage by
approximately 2%.
HomeGoods
Fiscal Year Ended
Dollars in millions
January 30,
2016
January 31,
2015
February 1,
2014
Net sales $3,915.2 $3,414.4 $2,993.7
Segment profit $ 549.3 $ 463.2 $ 386.5
Segment profit as a percentage of net sales 14.0% 13.6% 12.9%
Increase in same store sales 8% 7% 7%
Stores in operation at end of period 526 487 450
Selling square footage at end of period (in thousands) 10,234 9,537 8,865
HomeGoods’ net sales increased 15% in fiscal 2016, on top of a 14% increase in fiscal 2015. The increase
in fiscal 2016 reflected a 7% increase from new store sales and an 8% increase from same store sales. The
same store sales increase of 8% in fiscal 2016 is on top of a same store sales increase of 7% in fiscal 2015. The
increase in same store sales for fiscal 2016 was primarily due to an increase in customer traffic. Same store
sales growth in fiscal 2015 was driven by an increase in the value of the average transaction along with an
increase in customer traffic.
Segment profit margin for fiscal 2016 was 14.0%, up from 13.6% for fiscal 2015. The growth in segment
margin for fiscal 2016 was driven by expense leverage, primarily buying and occupancy costs, on strong same
store sales growth and an increase in merchandise margin, partially offset by an increase in distribution costs
and higher payroll costs related to our wage initiative. Segment profit margin for fiscal 2015 was 13.6%, up from
12.9% for fiscal 2014. The increase in fiscal 2015 was driven by expense leverage on the 7% same store sales
increase, due to buying and occupancy costs as well as administrative costs, and an increase in merchandise
margins.
In fiscal 2017, we plan an increase of approximately 50 HomeGoods stores and plan to increase selling
square footage by approximately 8%.
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