Tjx-2017-Annual-Report.Pdf
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THE TJX COMPANIES, INC. 2017 ANNUAL REPORT THE TJX COMPANIES, INC. COMPANIES, INC. THE TJX U.S. CANADA IRELAND U.K. NETHERLANDS GERMANY POLAND AUSTRIA AUSTRALIA TM GROWING AROUND THE GLOBE FOR TODAY AND THE FUTURE 2017 ANNUAL REPORT The TJX Companies, Inc. 770 Cochituate Road Framingham, MA 01701 508-390-1000 tjx.com THE TJX COMPANIES, INC., the leading off-price CANADA apparel and home fashions retailer in the U.S. and worldwide, is ranked 87 among Fortune 500 companies and operates four major divisions: Marmaxx, HomeGoods, TJX Canada, and TJX Winners is the leading off-price family apparel and home fashions International (comprised of Europe and Australia). With more retailer in Canada and was acquired by TJX in 1990. Select stores than 4,000 stores, three e-commerce sites, and approximately offer fine jewelry and some feature The Runway at Winners, a high- 249,000 Associates, we see ourselves as a global, off-price, end designer department. Winners operated 264 stores at 2017’s value retailer, and our mission is to deliver great value to our year end. customers every day. We do this by offering a rapidly changing assortment of quality, fashionable, brand name, and designer merchandise at prices generally 20% to 60% below full-price retailers’ (including department, specialty, and major online HomeSense introduced the off-price home fashions concept to retailers) regular prices on comparable merchandise. With Canada in 2001. This chain offers a broad array of home basics and our value proposition, we reach a broad range of fashion- home décor merchandise. It operates in a standalone and superstore and value-conscious customers across many income format, which pairs HomeSense with Winners. At 2017’s year end, levels and demographic groups. HomeSense operated 117 stores in Canada. UNITED STATES Marshalls launched in Canada in 2011. In Canada, Marshalls offers T.J. Maxx was founded in 1976 and together with Marshalls great, off-price values on family apparel, with an expanded footwear forms Marmaxx, the largest off-price retailer of apparel and department, and The CUBE, an exciting juniors’ department. home fashions in the U.S. T.J. Maxx launched its e-commerce Marshalls operated 73 stores in Canada at 2017’s year end. site, tjmaxx.com, in 2013. T.J. Maxx operated 1,223 stores in 49 states and Puerto Rico at 2017’s year end. T.J. Maxx offers EUROPE family apparel, home fashions, and expanded fine jewelry and accessories departments, as well as The Runway at Maxx, a high-end designer department, in some stores. Launched in 1994, T.K. Maxx introduced off-price retailing to the U.K. and Ireland and is the only brick-and-mortar, off-price apparel and home fashions retailer of significant size in Europe. T.K. Maxx expanded into Germany in 2007, Poland in 2009, and Austria and the Marshalls was acquired by TJX in 1995 and with T.J. Maxx forms Netherlands in 2015. T.K. Maxx offers top-brand family apparel as well Marmaxx. Marshalls operated 1,062 stores in 47 states and Puerto as home fashions, and in some stores, the Mod Box, a department Rico at 2017’s year end. Marshalls offers family apparel and home specifically for younger customers, and Gold Label, which features fashions, including expanded footwear and men’s departments, high-end designer labels. T.K. Maxx ended 2017 with 540 stores. and The CUBE, a department specifically for juniors. It also operates tkmaxx.com in the U.K. Homesense introduced the off-price home fashions concept to the U.K. in 2008 and expanded into Ireland HomeGoods, introduced in 1992, is the leading off-price retailer in 2017. This business offers our customers great values of home fashions in the U.S. HomeGoods offers an eclectic on top-quality home fashions, including home basics assortment of home fashions, including furniture, rugs, lighting, soft and home décor merchandise. At 2017’s year end, home, decorative accessories, tabletop, and cookware as well as Homesense operated 55 stores. expanded pet, kids, and gourmet food departments. HomeGoods operates in a standalone and superstore format, which couples HomeGoods with T.J. Maxx or Marshalls. At 2017’s year end, AUSTRALIA HomeGoods operated 667 stores in 47 states and Puerto Rico. In 2015, TJX acquired Trade Secret, an Australian off-price retailer that was converted to T.K. Maxx in 2017. The Australian chain offers branded apparel for the family, as well as footwear, accessories, and Sierra Trading Post, acquired by TJX in 2012, is an off-price home fashions, all at great values. With the first store opening in 1992, Internet retailer of brand name outdoor gear, family apparel and it is now a 38-store chain with locations in New South Wales, Victoria, footwear, sporting goods, and home fashions. Sierra Trading Post Queensland, and the Australian Capital Territory. launched its e-commerce site, sierratradingpost.com, in 1998. As of 2017’s year end, it also operated 27 stores in the U.S. In 2017, Homesense launched in the U.S. with four stores. Homesense complements HomeGoods, offering a differentiated mix and expanded departments, such as large-scale furniture, lighting, and rugs, as well as new departments such as a general store and an entertaining marketplace. During the last 41 years, we have grown TJX to be the world’s only major international off-price apparel and home fashions retailer. We are proud of our long, consistent track record of steady sales and profit growth, with only one annual comparable store sales decline in the history of our Company. Looking ahead, we are even more excited about the future. Giving us great confidence are the key strengths of our business that we have developed over many decades and differentiate us in a changing retail landscape. Most importantly, across our organization, we constantly strive to bring consumers extraordinary value every day on amazing brands and fashions, and to surpass our goals for the business. We are convinced that we will continue to gain market share around the world and grow our Company successfully for today and many years to come. Driving Market Share BY DELIVERING EXTRAORDINARY VALUES EVERY DAY TO OUR FELLOW SHAREHOLDERS: in 2017, we were excited to mark another year of across our global organization. Net income rose to $2.6 successful growth for TJX, following many successful billion in 2017 and adjusted earnings per share were years of growth over the last four decades! We surpassed $3.85, increasing 9% over the prior year and exceeding $35 billion in sales and opened our 4,000th store, our expectations.1 Importantly, merchandise margin proud milestones for our Company. We reached the high remained strong on top of a significant increase last year. end of our comparable store sales plan and exceeded Overall, we grew total square footage by 4%, adding a our earnings per share expectations. We are convinced net total of 258 stores, to end the fiscal year with 4,070 that we grew our market share around the world as each stores. We are proud of our store growth, especially in a of our four major divisions delivered comparable store year when there were thousands of retail store closings. sales growth driven by customer traffic gains, which We are also extremely proud to employ approximately we view as a great way for a retailer to grow sales. Our 249,000 Associates worldwide as of year end. outstanding values and eclectic mix of quality, branded merchandise continue to resonate with shoppers, and STRONGLY POSITIONED FOR CONTINUED we are convinced we will continue our successful SUCCESSFUL GROWTH growth around the world. Marmaxx, our largest divi- sion, delivered results in line with our expectations while TJX is the largest off-price retailer of apparel and home driving strong customer traffic increases through its fashions worldwide! Over the last 41 years, we have two chains, T.J. Maxx and Marshalls. HomeGoods had developed and grown our highly integrated, global, another strong year, surpassing $5 billion in sales and off-price retail model, infrastructure, and international launching Homesense, our second U.S. home concept. teams. In a rapidly changing retail landscape and with TJX Canada achieved excellent results at all three of the growth of e-commerce in general, we see TJX as our Canadian retail banners and further extended our very strongly positioned. We believe the depth of our reach in that country. TJX International met our sales off-price knowledge and expertise on a global level expectations and beat our profit plans with solid is unmatched. The key advantages that differentiate performance in Europe and terrific sales results in us from so many other retailers are major reasons we Australia. We were also very pleased with the growth have great confidence in our Company. Further, these of our e-commerce businesses in the U.S. and U.K., strengths have led to consistent comparable store sales which, while still small relative to our overall business, growth and customer traffic increases for TJX. was significant as we added categories and brands. Our best-in-class buying organization, worldwide In 2017, 53-week sales reached $35.9 billion, up more vendor universe, and international store base are than $2 billion over 2016. This represents sales growth clearly major strengths. We function as “One TJX,” of 8% over an increase of 7% in the prior year. capitalizing on our global presence and Consolidated comparable store sales on leveraging talent, infrastructure, ideas, and a 52-week basis grew 2% over last year’s expertise across all our geographies. Further, strong 5% increase. In our history as we are dedicated to teaching and training a Company, we have had an annual our Associates to transfer knowledge comparable store sales decline in and develop the next generation of only one year.