TJX Companies, Inc. F3Q09 (Qtr End 10/25/08) Earnings Call Transcript

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Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Kimberly Greenberger – Citigroup.

Kimberly Greenberger - Citigroup

I was hoping you could address the SG&A. It looks like you are holding the absolute dollar growth rate down, but could you talk about the major contributors of the increase in SG&A as a percentage of sales? And just remind us at what comp level corporate-wide you need in order to hold that SG&A rate flat going forward.

Nirmal K. Tripathy

I assume you are talking about the third quarter and I will also talk about the fourth quarter very briefly.

In the third quarter, again apples-to-apples, 52 weeks, excluding mark-to-market, of course the third quarter doesn’t have the 53^rd week. So SG&A delivered 60 basis points, primarily because of a low comp, but in the third quarter of last year, you know typically in the third quarter we do a number of true-ups, primarily for insurance and benefits that happens every year, last year we got quite a big pop out of it and this year we didn’t get as big a pop out of it, and as a result of that, that contributed to the deleverage.

So those are the two reasons primarily for SG&A deleverage in the third quarter.

And then just looking at the fourth quarter, we are basically flat to last year, but there is actually a little bit of deleverage. I won’t go into a lot of detail there, but essentially we are flat to last year and the reason for that is that we have a lot of cost initiatives going on that are kicking in and we have actually planned those numbers in the fourth quarter.

Kimberly Greenberger - Citigroup

The fourth quarter, is it flat to last year, SG&A including the extra week or excluding the extra week?

Nirmal K. Tripathy

It is actually the same on both basis, so that’s the relative things to look at. It’s the same percentage on both.

Carol M. Meyrowitz

In the third quarter we did have a slight decrease in retail, which going into the fourth quarter our on order is pretty flat in retail which will benefit us a little bit.

Kimberly Greenberger - Citigroup

And that helps just lower the processing cost at the stores?

Carol M. Meyrowitz

Exactly.

Operator

Your next question comes from Brian Tunick - J.P. Morgan.

Brian Tunick - J.P. Morgan

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