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TJX profit surges in Q4; full-year forecast below expectations

BY Katherine Boccaccio

Framingham, Mass. — The TJX Cos. reported Wednesday a profit of $604.8 million for the quarter ended Feb. 2, compared with $475.3 million in the year-ago period. Despite the strong showing, TJX forecast a slowed growth pace for the new fiscal year and issued a profit forecast below analysts’ expectations. And joining many other retailers, the company announced that beginning with the fiscal 2014 second quarter, it will no longer report monthly sales.

For the 14-week fourth quarter ended February 2, 2013, TJX reported net sales of $7.7 billion, a 15% increase over the prior year. Consolidated same-store sales for the quarter increased 4% over the prior year’s 7% increase.

“As large as we are, we have enormous store growth potential and are excited about the opportunity to leverage the success of our brick-and-mortar business with e-commerce over time,” said Carol Meyrowitz, CEO, TJX Companies. “Our management team is focused on our four powerful divisions, and I am as confident as ever in our ability to continue driving profitable sales growth for many years to come. We are well on the road to being a $40 billion-plus company!”

Looking ahead, TJX predicts same-store sales will rise a slight 1% to 2% this year after a 7% bump for the year ended Feb. 2.

Net sales for the 53-week fiscal year were $25.9 billion, a 12% increase over last year. Consolidated same-store sales for the year increased 7% over the prior year’s 4% increase. Net income for the year was $1.9 billion, compared to $1.93 last year.

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E.Ka says:
Mar-19-2013 07:54 pm

We should really expect what is in reality, what we can only achieve to avoid disappointments. We should not be too ambitious for it will destroy the company. - Rich Von Alvensleben

E.Ka says:
Mar-19-2013 07:54 pm

We should really expect what is in reality, what we can only achieve to avoid disappointments. We should not be too ambitious for it will destroy the company. - Rich Von Alvensleben

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Starboard urges Office Depot to sell off interest in Mexican unit

BY Katherine Boccaccio

Boca Raton, Fla. — Office Depot largest shareholder Starboard Value said Wednesday it sent a letter to the office supply retailer’s board, urging it to sell its 50% joint-venture interest in the Office Depot de Mexico business as soon as possible.

Starboard, which owns a 14.8% stake in Office Depot, said it believes the value of the JV interest is not fully reflected in the retailer’s stock price.

JV partner Mexican retailer Grupo Gigante has offered $687.34 million for Office Depot’s half. That offer expires on Thursday, and an answer will require consent from OfficeMax under the terms of the office supply pair’s recently announced merger deal.

"If OfficeMax does not consent to Office Depot’s negotiations with Gigante or any other potential buyer regarding the sale of the JV Interest, Starboard would view this as both unreasonable and potentially anti-competitive," the shareholder said in the letter.

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Target Q4 slips but tops Street; will open 124 stores in Canada by yearend

BY Katherine Boccaccio

Minneapolis — Target Corp. reported Wednesday a profit of $961 million for the fourth quarter, down from $981 million in the year-ago period. The profit slip reflected expenses related to its Canadian market entry along with a spending slowdown during the holiday period. It was Target’s weakest holiday season performance since 2008. But its adjusted results beat analysts’ estimates and it forecast first-quarter earnings above Wall Street’s view. (For commentary on Target’s results, click here.)

“We believe these results position us well to deliver on significant plans in 2013, including completion of the largest store opening program in our company’s history with 124 stores in Canada and additional Target and CityTarget locations in the U.S., investing in new processes and technology that will improve our guests’ multichannel experience and closing the sale of our credit card receivables.” said Gregg Steinhafel, chairman, president and CEO, Target.

On a conference call with analysts, Target said it will open its first 24 Canadian stores in April, with a total of 124 locations planned by yearend. In the U.S., plans call for 15 to 20 new stores, including three CityTarget locations, and some 100 remodels.

"We expect to open many more new stores this year than in any year in our history," Steinhafel said during the call.

Target’s revenue in the fourth quarter climbed 7% to $22.73 billion, from $21.29 billion in the same period last year. Analysts forecast $22.69 billion in revenue. Industry experts said the chain’s holiday showing was partially hurt by the disappointing performance of its collection of gifts sold in partnership with Neiman Marcus. The line launched on Dec. 1, and Target sharply discounted the goods before Christmas Eve.

As previously reported, sales at U.S. stores increased 6.8% to $22.4 billion in the fourth quarter from $20.9 billion last year. Same-store sales inched up 0.4%.

"We’re pleased with Target’s fourth quarter performance, particularly in the face of a highly promotional retail environment and continued consumer uncertainty," Steinhafel said.

For the full-year, sales increased 5.1% to $72.0 billion from $68.5 billion in 2011, with a 2.7% increase in comparable-store sales combined with the contribution from new stores and one additional accounting week.

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