The movement in foreign currency exchange rates had a one percentage point negative impact on consolidated net sales growth in the second quarter of Fiscal 2014 versus the prior year. The overall net impact of foreign currency exchange rates had a neutral impact on second quarter Fiscal 2014 earnings per share, compared with a neutral impact last year.

A table detailing the impact of foreign currency on TJX pretax earnings and margins, as well as those of its international businesses, can be found in the Investor Information section of the Company’s website, www.tjx.com.

Margins

For the second quarter of Fiscal 2014, the Company’s consolidated pretax profit margin was 12.0%, up 0.5 percentage points over the prior year.

The gross profit margin for the second quarter of Fiscal 2014 was 28.8%, 0.7 percentage points above last year’s margin. This increase was driven primarily by strong merchandise margin improvement and buying and occupancy expense leverage on the above-plan sales.

Selling, general and administrative costs as a percent of sales were 16.7% in the second quarter, a 0.2 percentage point increase over last year’s ratio, primarily due to increased investments in marketing and the Company’s e-commerce businesses, as well as the Company’s contribution to The TJX Foundation.

Inventory

Total inventories as of August 3, 2013, were $3.2 billion, compared with $3.0 billion at the end of the second quarter last year. Consolidated inventories on a per-store basis at August 3, 2013, including the distribution centers, but excluding the Company’s e-commerce businesses, were down 5% (down 4% on a constant currency basis). The Company enters the third quarter in an excellent inventory position which gives it the flexibility to take advantage of the great buying opportunities it is seeing in the marketplace.

Shareholder Distributions

During the second quarter, the Company repurchased a total of $325 million of TJX stock, retiring 6.4 million shares. For the first half of Fiscal 2014, the Company spent a total of $625 million in repurchases of TJX stock, retiring 12.9 million shares and it continues to expect to repurchase approximately $1.3 billion to $1.4 billion of TJX stock in Fiscal 2014. The Company may adjust the amount of this spending up or down depending on various factors.

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