US: TJX Q2 profit slumps on computer breach costs
Off-price retailer The TJX Companies has seen its second quarter profit more than halved after it was hit by a massive charge for a breach of consumer data earlier this year.
Income from continuing operations st the Framingham, Massachusetts-based company was $59m compared with $138.2m during the same period last year.
Net sales from continuing operations increased 9% to $4.3bn, and consolidated same-store sales increased 5% over last year.
The company recorded an after-tax charge of $118m for the computer intrusion. Excluding this charge, adjusted diluted earnings per share from continuing operations for the second quarter were $.38 versus $.29 for the prior year, a 31% increase and well above the company's plan, it said today (14 August).
For the first half of fiscal 2008, net sales from continuing operations were $8.4bn, a 7% increase over last year, and year-to-date same-store sales increased 4% over the prior year. Income from continuing operations was $221m including after-tax charges of $130m related to the unauthorised computer intrusion.
Carol Meyrowitz, president and CEO of The TJX Companies, said: "Our operating results mark the strongest second quarter performance in the company's history and were achieved on top of very strong performance last year.
"Importantly, virtually all of our businesses delivered significant top- and bottom-line improvement that was in line with or above our plan. Quarterly pre-tax profit margins continue to benefit from strong comp sales as well as our focus on cost reduction, trends that began in late 2005."
Meyrowitz added that the company has now strengthened the security of its computer systems.
For the third quarter of fiscal 2008, the company expects earnings per share from in the range of $.53 to $.55, which represents a 10% to 15% increase over $.48 per share in the prior year. This outlook is based upon estimated consolidated same-store sales growth in the range of 3% to 4%.
For the fiscal year ending 26 January 2008, the company sees earnings per share of $1.57 - $1.61 on consolidated same-store sales growth of 3% to 4% for the full year.
TJ Maxx operates stores under the Marshalls, Winners, HomeSense, HomeGoods, TK Maxx, AJ Wright and Bob's Stores nameplates.
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