The TJX Companies, Inc. Reports 28% Adjusted EPS Growth On $25.9 Billion In Sales In Fiscal 2013; Announces New $1.5 Billion Stock Repurchase Program; Plans 26% Increase In Dividend

On a reported basis, diluted earnings per share for the full Fiscal 2013 year were $2.55 compared to $1.93 last year. On an adjusted basis, excluding the items detailed above, diluted earnings per share for the 53-week fiscal year represented a 28% increase over last year’s adjusted $1.99. The 53 ^rd week in Fiscal 2013 also impacted the comparability of results. Excluding the approximately $.08 benefit from the 53 ^rd week and the items above, adjusted earnings per share on a 52-week basis were $2.47, a 24% increase over the prior year’s adjusted $1.99.

For the full Fiscal 2013 year, foreign currency exchange rates had a neutral impact on earnings per share, compared with a neutral impact last year.

The 53 ^rd week in Fiscal 2013 also impacted the comparability of results in the fourth quarter. On a reported basis, diluted earnings per share for the 14-week fourth quarter were $.82, a 32% increase over $.62 per share last year. Excluding the approximately $.08 benefit from the extra week, adjusted earnings per share on a 13-week basis were $.74, a 19% increase over last year. Foreign currency exchange rates had a $.01 positive impact on earnings per share in the fourth quarter, compared with a neutral impact last year.

Margins

For the full year Fiscal 2013, the Company’s consolidated pretax profit margin was 11.9%, up 1.2 percentage points over the prior year’s adjusted margin. The increase was primarily driven by merchandise margin improvement, as well as expense leverage on the above-plan sales. The 53 ^rd week in the Fiscal 2013 calendar positively impacted pretax margins by approximately 0.2 percentage points.

The gross profit margin for Fiscal 2013 was 28.4%, 1.0 percentage points above the adjusted margin in the prior year primarily driven by improved merchandise margins across all divisions coupled with buying and occupancy leverage. Selling, general and administrative costs as a percent of sales were 16.4%, a 0.1 percentage point improvement over the prior year’s adjusted ratio. A number of items impacted SG&A costs during the year which partially offset the expense leverage on above-plan sales, including the Company’s contribution to The TJX Foundation as well as two items recorded in the Fiscal 2013 third quarter: a non-cash charge for the cumulative impact of a correction to the Company’s pension accrual for prior years and a non-operating charge due to the adjustment in the Company’s reserve for former operations relating to closed stores.

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