The TJX Companies, Inc. (NYSE:TJX)
May 2008 Sales Call
June 5, 2008 8:15 am ET
Sherry Lang - Senior Vice President, Investor and Public Relations
Good morning I’m Sherry Lang, Senior Vice President of Investor and Public Relations for The TJX Companies. Today is June 5, 2008, and I would like to welcome you to our investor call to discuss our May 2008 Sales. Before I begin please note that the forward looking statements I make today about the companies results and plans are subject to risks and uncertainties that could cause these results and plans to vary materially.
These risks are discussed in the company’s SEC filings including, without limitation the Form 10-K filed March 26, 2008. Further, these comments are copyrighted by the TJX Companies. Any recording, rebroadcast, reproduction or other use of these comments for profit or otherwise without prior consent of TJX is prohibited and a violation of the United States Copyright Laws. If at any time during this message you would like to return to the beginning please press the one key.
To recap the numbers, sales for the four week period ended May 31, 2008, were $1.45 billion up 6% over the $1.37 billion achieved during the comparable four week period ended June 2, 2007. For the 17 weeks ended May 31, 2008, sales reached $5.9 billion a 6% increase over last years $5.5 billion. Consolidated comparable store sales for May 2008 increased 2% over a strong 5% increase last year. Foreign currency exchange rates benefited comp store sales by about one percentage point which was about what we had expected.
Our 2% consolidated comp sales increase in May was at the high end of our expectations. All of our off price divisions either met or exceeded our plans for comp sales increases for the month and where weather was seasonable we did particularly well. We flowed compelling assortments to our stores and our value proposition which combines great fashion, quality brand, and price continue to resonate with customers in a challenging retail environment.
Divisional comp store sales for May were as follows: at the Marmaxx Group comp store sales increased by 1% in May over a solid 4% increase last year which was at the high end of our plan. I will go into more detail on this division in a moment. At Winners and HomeSense in Canada comp store sales in US Dollars increased 13% in May. In local currency, which we believe more closely reflects our operating performance comp store sales in Canada increased by 3% in May over a 4% increase last year.
HomeGoods reported a comp store sales increase of 3% in May versus a 1% increase last year. At T.K. Maxx comp store sales in US Dollars increased 5% in May, in local currency, which again we believe more closely reflects our operating performance, comp store sales increased by a strong 5% over a 6% increase last year.
A.J. Wright reported a 1% increase in comp store sales in May over a 10% increase last year which was its strongest monthly compare of that year. At Bob’s Stores comp sales decreased by 14% in May versus a strong 14% increase last year. The Northeast had tough weather for all of our chains but with a store base concentrated in the Northeast Bob’s was disproportionately hurt.
To give some further color to May’s results at the Marmaxx Group, geographically regions where the weather was seasonable did very well including the Southeast, Midwest, Southwest and West Coast. Again, in the Northeast weather was wet and cold and comps trailed the chain. Florida also trailed the chain.
As to merchandise categories at Marmaxx, apparel comps rounded to a 1% comp increase and home fashions rounded to a 1% comp decrease. While misses sportswear was down overall dresses continued to be strong with a mid single digit comp increase over a huge double digit increase last year. Footwear and accessories also were very strong over tough compares to last year. Men’s outperformed the chain which bodes well for Father’s Day and children’s did extremely well.
We are very encouraged to see continued improvement in home fashions as comps in this category were nearly flat on leaner inventory levels. As to inventories at the Marmaxx Group our total inventory commitment including the warehouses, stores and merchandise on order was down versus last year on a per store basis as of the end of May. Our inventories are in great shape as we enter June ready to take full advantage of a marketplace flush with opportunities.
Summing up, for June we continue to look for a 3% increase in comparable store sales on a consolidated basis and a 2% increase at Marmaxx. For the second quarter we continue to expect diluted earnings per share to be in the range of $0.40 to $0.42. This compares to $0.13 in diluted earnings per share in the prior year which includes the $0.25 per share intrusion charge. Excluding this charge our guidance represents a 5% to 11% increase over the adjusted $0.38 diluted earnings per share in the prior year.
Thank you and have a good day.
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