Succeeding in All Types of Environments

The TJX business model is built to have tremendous flexibility and grow with the times, through economic downturns as well as upturns. Over our 34-year history as a Company, we have achieved consistent, strong performance. In fact, over this period we have had only one year with a comparable store sales decline. Over the last 15 years, we have delivered annual comparable store increases in each year, and earnings have grown solidly. Our long successful track record through many types of economic and retail environments is one of the reasons for our confidence that our strong top- and bottom-line growth is sustainable.

On the top line, we have great growth opportunities with our value proposition. Whether the economy is weak or strong, we believe that value is here to stay! We strongly believe that our compelling values are why new customers will turn to TJX brands and our loyal customers will continue to choose our stores. With our broad U.S. and international customer base, we believe we have one of the widest demographic audiences in retail and we continue to expand our customer reach. Our research tells us that there remains significant opportunity to further our market penetration and tap consumers who have not yet shopped our stores. In 2011, we plan to reach out even more aggressively with our marketing to these consumers, emphasizing that we are a source for current fashions at great values. In addition, we are continuing to upgrade stores across our businesses to attract and retain more new customers. Overall, we believe we continue to have major growth opportunities in our four large divisions, both in the U.S. and abroad.

On the bottom line, we also believe we continue to have major opportunities. In the last two years, we have run our business with very low levels of inventories, which has driven faster inventory turns and stronger merchandise margins. We believe we can run even leaner and make our supply chain even faster and better which is a major factor that gives us confidence in the sustainability of our bottom-line growth. We have great flexibility in real estate, and continue to take advantage of opportunities that we believe will benefit our business long term. At TJX, being a low cost operator allows us to offer customers great values while maintaining strong profitability. We have seen the benefit of our major cost reduction initiatives over the past several years and in 2011, we are planning $50-$75 million in cost reductions. Further, we expect to continue gaining cost leverage as our businesses grow and lever their infrastructures. Underpinning our confidence in the sustainability of our profitability is our financial strength and flexibility. Our strong operations and low cost model have enabled us to deliver superior financial returns that are among the highest in retail.