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TJX FY16 earnings up 5 percent, increases quarterly dividend

By Prachi Singh

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Business |REPORT

The TJX Companies reported net sales for the fourth quarter increased 8 percent to 9 billion dollars and consolidated comparable store sales increased 6 percent over last year's 4 percent increase. For the 52-week fiscal year ended January 30, 2016, net sales were 30.9 billion dollars, a 6 percent increase over last year. Consolidated comparable store sales increased 5 percent over last year's 2 percent increase. Net income for the fiscal year was 2.3 billion dollars and diluted earnings per share were 3.33 dollars, a 5 percent increase over the prior year.

“We are convinced that we are gaining market share profitably around the world. The year 2015 marks our 20th consecutive year of increases in comp sales and EPS! We have sustained profitable growth through many types of economic and retail climates and in different regions around the world, and we have great confidence in the future. We are confident that we are making the right decisions and investments today that position us extremely well to continue capturing market share and reach 40 billion dollars and beyond," said Ernie Herrman, CEO and President of The TJX Companies.

Fourth quarter and full year financial update

Net income for the fourth quarter was 666 million dollars and diluted earnings per share were 0.99 dollar, a 6 percent increase over the prior year's 0.93 dollar. For the fourth quarter, the company's gross profit margin was 28.7 percent, up 0.5 percentage points versus the prior year.

For the full year fiscal 2016, the company's consolidated pretax profit margin was 11.8 percent, a 0.5 percentage point decrease compared with the prior year's adjusted 12.3 percent. The gross profit margin was 28.8 percent, a 0.3 percentage point increase versus the prior year.

During the fiscal year ended January 30, 2016, the company increased its store count by a net of 219 stores to a total of 3,614 stores.

The company also said that it intends to increase the regular quarterly dividend on its common stock to be declared in March 2016 to 0.26 dollar per share, subject to the approval of the Company's Board of Directors. This increase would represent a 24 percent rise in the current per share dividend. Over this period of time, the Company's dividend has grown at a compound annual rate of 23 percent.

Full year and first quarter outlook

For the fiscal year ending January 28, 2017, the company expects diluted earnings per share to be in the range of 3.29 dollars to 3.38 dollars, which would represent a 1percent decrease to a 2 percent increase over the 3.33 dollars in fiscal 2016. This EPS outlook is based upon estimated consolidated comparable store sales growth of 1percent to 2 percent.

For the first quarter of fiscal 2017, the company expects diluted earnings per share to be in the range of 0.68 dollar to 0.70 dollar compared to 0.69 dollar last year. This EPS outlook is based upon estimated consolidated comparable store sales growth of 2 percent to 3 percent.

TJX Companies