TJ Maxx 2015 Annual Report Download - page 47

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Foreign Segments:
TJX Canada
Fiscal Year Ended
U.S. Dollars in millions
January 30,
2016
January 31,
2015
February 1,
2014
Net sales $2,854.6 $2,883.9 $2,877.8
Segment profit $ 375.3 $ 393.6 $ 405.4
Segment profit as a percentage of net sales 13.1% 13.6% 14.1%
Increase in same store sales 12% 3% 0%
Stores in operation at end of period
Winners 245 234 227
HomeSense 101 96 91
Marshalls 41 38 27
Total 387 368 345
Selling square footage at end of period (in thousands)
Winners 5,470 5,310 5,196
HomeSense 1,900 1,824 1,748
Marshalls 975 914 666
Total 8,345 8,048 7,610
Net sales for TJX Canada in fiscal 2016 were down 1% compared to fiscal 2015. While net sales reflected a
3% increase from new store sales and a 12% increase from same store sales, these were more than offset by
currency translation that negatively impacted sales growth by 16%. The same store sales increase of 12% in
fiscal 2016 was primarily due to an increase in customer traffic. Same store sales increased 3% in fiscal 2015.
Net sales for TJX Canada were essentially flat in fiscal 2015 compared to fiscal 2014 as a 4% increase from new
store sales and a 3% increase in same store sales were completely offset by a 7% negative impact from foreign
currency.
Segment profit margin decreased 0.5 percentage points to 13.1% in fiscal 2016. The decrease in segment
margin was primarily due to a decrease in merchandise margins, the unfavorable impact of mark-to-market
adjustments on inventory-related derivatives and an increase in incentive pay due to the above-plan
performance. Collectively, these items reduced segment margin by 1.2 percentage points. The decrease in
merchandise margin was driven by transactional foreign exchange as the year-over-year changes in currency
exchange rates increased TJX Canada’s cost of merchandise purchased in U.S. dollars. These declines in the
segment margin were partially offset by expense leverage on same store sales, particularly buying and
occupancy costs.
Segment profit margin decreased 0.5 percentage points to 13.6% in fiscal 2015. The decrease in segment
margin was due to a decrease in merchandise margins and the unfavorable impact of mark-to-market
adjustments on inventory-related derivatives, which collectively reduced segment margin by 0.8 percentage
points. The decline in merchandise margin in fiscal 2015 as compared to fiscal 2014 was also largely related to
transactional foreign exchange. The decline in the fiscal 2015 segment margin was partially offset by expense
leverage on same store sales, particularly buying and occupancy costs, along with a reduction in advertising
costs as a percentage of sales.
In fiscal 2017, we plan an increase of approximately 30 stores in Canada and plan to increase selling square
footage by approximately 7%.
31