Earnings for the quarter ended Jan. 27 totaled 205.5 million, or 43 cents per share, down from $288.7 million, or 60 cents per share, earned during the fourth quarter a year earlier. Overall sales were up 9% to $5.1 billion from $4.68 billion a year earlier. Sales from stores open at least one year rose 5% overall.
Carol Meyrowitz, president and CEO, said in a conference call that the closing of 34 underperforming A.J. Wright stores will allow the company to refocus on the craft store's demographics to bring that division to the break-even point by 2008. A.J. Wright lost $1 million last year but should show a positive cash flow soon, she said.
The Framingham, MA-based discount retailer said it also expects more positive growth overall in first quarter of the new fiscal year. Net income is projected to be between 36 cents and 38 cents per share, an increase from the 34 cents per share earned in the year-ago period. Same store sales are also expected to rise 3%.
"We enter '07 with great momentum and an organization that is energized and results driven," said Meyrowitz , adding that 2006 was "a turning point" for the company. The firm, which operates 2,466 stores under the T.J. Maxx, Marshalls, HomeGoods, A.J. Wright, Bob's Stores, Winners, HomeSense and TK Maxx flags in the United States, Canada and Europe, has recently been struggling with a computer security breach that resulted in the theft of customer information. TJX said the security breach cost approximately $5 million, or 1 cent per share, in the fourth quarter including costs incurred to investigate the security lapse, enhance computer security and communicate with customers along with legal, technical and other fees. Meyrowitz said TJX officials do not yet have enough information to estimate the total losses it may still incur as a result of that intrusion.
For the fiscal year ending Jan. 26, 2008, the company said it expects per share earnings of between $1.80 to $1.85, reflecting an increase of between 10% and 13%.
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