The discussion that follows relates to our 53-week fiscal year ended January 31, 2009 (fiscal 2009), and the fiscal years ended January 26, 2008 (fiscal 2008) and January 27, 2007 (fiscal 2007), each of which included 52 weeks.

Our results reflect two discontinued operations: Bob's Stores, sold in fiscal 2009 and 34 A.J. Wright stores closed in fiscal 2007 as part of a repositioning of the chain. See Note C to the consolidated financial statements. All references in the following discussion are to continuing operations unless otherwise indicated.

Our results reflect the costs of the unauthorized intrusion or intrusions (collectively, the "Computer Intrusion") into portions of our computer system, which was discovered in late fiscal 2007 and in which we believe customer data were stolen. See "Provision for Computer Intrusion related costs" below.

RESULTS OF OPERATIONS

Our fiscal 2009 performance was adversely affected in the second half of the year by two macroeconomic factors: the worldwide recession which adversely affected consumer spending and retail sales at TJX and generally and the significant strengthening of the U.S. dollar against the Canadian dollar and the British pound, which adversely affected the translation of the operating results of our Canadian and European businesses. With the flexibility of our off-price business model, in fiscal 2009 we increased our inventory turns and maintained the value proposition of our merchandise by buying closer to need and operating with leaner-than-usual inventories. We also continued a focus on tight expense control during fiscal 2009. Despite the challenging environment, customer traffic in fiscal 2009 was up across virtually all of our divisions, and merchandise margins remained strong. Highlights of our financial performance for fiscal 2009 include the following:

- Net sales for fiscal 2009 were $19.0 billion, a 4% increase over fiscal 2008. The 53rd week in fiscal 2009 increased net sales by approximately 1%, which was more than offset by a 2% decline in net sales due to the impact of foreign currency exchange rates. We continued to grow our business, with both stores in operation and selling square footage up 5% at the end of fiscal 2009 compared to last fiscal year end.

- Same store sales on a 52-week basis for fiscal 2009 increased 1% over the prior year.

- Our cost of sales ratio for fiscal 2009 increased 0.3 percentage points, as an increase in merchandise margins and the benefit of the 53rd week were more than offset by buying and occupancy expense deleverage on a 1% same store sales increase. Selling, general and administrative expenses as a percentage of net sales for fiscal 2009 increased by 0.1 percentage points compared to the prior year, primarily due to deleverage on the 1% same store sales increase.

- Our fiscal 2009 pre-tax margin (the ratio of pre-tax income to net sales) was 7.6% compared to 6.9% for fiscal 2008. The comparison of pre-tax margins for fiscal 2009 to fiscal 2008 was affected by the Provision for Computer Intrusion related costs in each year. Fiscal 2009 included a $31 million credit (pre-tax) to the provision, which increased pre-tax margin by 0.2 percentage points, while fiscal 2008 included a pre-tax charge of $197 million, which reduced the fiscal 2008 pre-tax margin by 1.1 percentage points.

- Income from continuing operations was $914.9 million, or $2.08 per diluted share, for fiscal 2009 compared to $782.4 million, or $1.68 per diluted share, last year. The fiscal 2009 credit to the Provision for Computer Intrusion related costs increased fiscal 2009 income from continuing operations by $18 million, or $0.04 per diluted share, while the fiscal 2008 charge for the Provision for Computer Intrusion related costs reduced fiscal 2008 income from continuing operations by $119 million, or $0.25 per diluted share.

- During fiscal 2009, we repurchased 24.0 million shares of our common stock at a cost of $741 million. Our diluted earnings per share reflect the benefit of our stock repurchase program.

- Consolidated average per store inventories of our continuing operations, including inventory on hand at our distribution centers, were down 6% at the end of fiscal 2009 as compared to an increase of 2% at the prior year

end. On a comparable basis, adjusting for currency and a calendar shift due to the 53rd week in fiscal 2009, average per store inventories, including inventory on hand at our distribution centers, were down 4% in fiscal 2009 as compared to fiscal 2008 and were essentially flat in fiscal 2008 as compared to fiscal 2007.

We have implemented steps to position ourselves for the fiscal year ending January 30, 2010 (fiscal 2010) in light of the ongoing worldwide recession including:

- We have planned our consolidated same store sales conservatively, setting our inventory and expense plans around negative low single digit comparable store sales.

- We plan to continue to operate with historically lean inventories and to buy closer to need than in the past, designed to increase inventory turns and drive traffic to our stores.

- We are taking measures designed to reduce expenses in fiscal 2010 by up to $150 million including further savings in non-merchandise procurement, implementing processes to more efficiently manage payroll in our store and distribution centers, reducing marketing expenditures while increasing penetration, eliminating open positions, eliminating merit pay increases across the majority of the organization, restructuring certain areas to improve productivity and efficiency and offering a voluntary retirement program for certain employees.

The following is a discussion of our consolidated operating results, followed by a discussion of our segment operating results.

Net sales: Consolidated net sales for fiscal 2009 totaled $19.0 billion, a 4% increase over net sales of $18.3 billion in fiscal 2008. The increase reflected a 4% increase from new stores, a 1% increase from the 53rd week and a 1% increase in same store sales, offset by a 2% decline from the negative impact of foreign currency exchange rates. Consolidated net sales for fiscal 2008 increased 7% over net sales of $17.1 billion for fiscal 2007. The increase reflected increases of 3% from new stores, 2% from same store sales and a 2% favorable impact due to foreign currency exchange rates.

New stores have been a significant source of sales growth. Both our consolidated store count and our selling square footage increased by 5% in fiscal 2009 and by 4% in fiscal 2008 over the respective prior year periods. As a result of economic conditions, we have planned store openings more conservatively and expect to add 64 stores (net of store closings) in fiscal 2010, a 2% increase in our consolidated store base and an increase of 2% in our selling square footage.

The 1% same store sales increase in fiscal 2009 reflected a strong first half performance, especially at our international segments, partially offset by same store sales decreases in the second half of the year largely due to the economic recession. Customer traffic increased at virtually all of our businesses in fiscal 2009, even in the third and fourth quarters, which was partially offset by a reduction in the value of the average transaction. As for merchandise categories, shoes, accessories and dresses were the strongest performers, while home fashions were adversely affected by the weak housing market and economic conditions. Geographically, same store sales in Canada and the United Kingdom were above the consolidated average for fiscal 2009, while in the U.S., same store sales in the West Coast and Florida trailed the consolidated average.

The 2% increase in same store sales for fiscal 2008 was driven by a strong performance at our international segments. In the U.S., sales of dresses, footwear and accessories were strong, partially offset by softer sales in the balance of the women's apparel category. At Marmaxx, our largest business, home categories were also weak. Same store sales increases benefited from the continued expansion of footwear departments in Marshalls. During fiscal 2008, we opened expanded footwear departments in approximately 240 additional Marshalls stores. Same store sales for fiscal 2008 at our international segments were above the consolidated average. Within the U. S., the strongest regions were the West Coast and the Northeast, while Florida and the Southeast trailed the U.S. average. Overall transaction volume was slightly down in fiscal 2008, more than offset by an increase in the value of the average transaction.

We define same store sales to be sales of those stores that have been in operation for all or a portion of two consecutive fiscal years, or in other words, stores that are starting their third fiscal year of operation. We classify a store as a new store until it meets the same store sales criteria. We determine which stores are included in the same store sales calculation at the beginning of a fiscal year and the classification remains constant throughout that year, unless a store is

closed. We calculate same store sales results by comparing the current and prior year weekly periods that are most closely aligned. Relocated stores and stores that are increased in size are generally classified in the same way as the original store, and we believe that the impact of these stores on the consolidated same store percentage is immaterial. Same store sales of our foreign divisions are calculated on a constant currency basis, which removes the effect of changes in currency exchange rates, and we believe it is a more accurate measure of the divisional operating performance.

The following table sets forth our consolidated operating results as a percentage of net sales:

                                                                       Fiscal Year Ended January
                                                                     2009            2008           2007


Net sales                                                           100.0 %         100.0 %        100.0 %


Cost of sales, including buying and occupancy costs                  75.8            75.5           75.8
Selling, general and administrative expenses                         16.7            16.6           16.7
Provision for Computer Intrusion related costs                       (0.2 )           1.1              -
Interest (income) expense, net                                        0.1               -            0.1


Income from continuing operations before provision for income
taxes*                                                                7.6 %           6.9 %          7.4 %

* Due to rounding, the individual items may not foot to Income from continuing operations before provision for income taxes.

Impact of foreign currency exchange rates: Our operating results can be adversely affected by foreign currency exchange rates as a result of significant changes in the value of the U.S. dollar in relation to other currencies. Two of the more significant ways in which foreign currency impacts us are as follows:

Translation of foreign operating results into U.S. dollars: In our financial statements, we translate the operations of our stores in Canada and Europe from local currencies into U.S. dollars using currency rates in effect at different points in time. Significant changes in foreign exchange rates from comparable prior periods can result in meaningful variations in consolidated net sales, income from continuing operations and earnings per share growth as well as the net sales and operating results of our Canadian and European segments. Currency translation generally does not affect operating margins, as sales and expenses of the foreign operations are translated at essentially the same rates each period.

Inventory hedges: Additionally, we routinely enter into inventory-related hedging instruments to mitigate the impact of foreign currency exchange rates on merchandise margins when our international divisions purchase goods in currencies that are not their local currencies, primarily U.S. dollar purchases. As we have not elected "hedge accounting" as defined by SFAS No. 133 ("Accounting for Derivative Instruments and Hedging Activities"), under generally accepted accounting principles we record a mark-to-market adjustment on the hedging instruments in our results of operations at the end of each reporting period, prior to the currency gain or loss being recorded on the items being hedged. In subsequent periods, the income statement impact of the hedges are effectively offset when the related inventory is sold. While these effects occur every reporting period, they are of much greater magnitude when there are sudden and significant changes in currency exchange rates, as there were in the third and fourth quarters of fiscal 2009. Historically, the impact on a full-year basis has not been material. Since the mark-to-market adjustment on these hedges has no impact on net sales, it affects both our operating margins and earnings growth.

Cost of sales, including buying and occupancy costs: Cost of sales, including buying and occupancy costs, as a percentage of net sales was 75.8% in fiscal 2009, 75.5% in fiscal 2008 and 75.8% in fiscal 2007. This ratio for fiscal 2009, as compared to fiscal 2008, increased 0.3 percentage points primarily due to deleverage of buying and occupancy costs on the 1% same store sales increase. This deleverage more than offset a benefit to this expense ratio due to the 53rd week (estimated at approximately 0.2 percentage points) as well as an improvement in our consolidated merchandise margin of 0.2 percentage points. Throughout fiscal 2009, we solidly executed our off-price fundamentals, buying close to need, operating with leaner inventories and taking advantage of opportunities in the market place.

Cost of sales, including buying and occupancy costs, as a percentage of net sales for fiscal 2008, as compared to fiscal 2007, reflected an improvement in our consolidated merchandise margin (0.4 percentage points), due to improved markon and lower markdowns. Throughout fiscal 2008, we solidly executed our off-price fundamentals, buying close to need and taking advantage of opportunities in the market place. This merchandise margin improvement was

partially offset by a slight increase in occupancy costs as a percentage of net sales. All other buying and occupancy costs remained relatively flat as compared to the same period in the prior year.

Selling, general and administrative expenses: Selling, general and administrative expenses as a percentage of net sales were 16.7% in fiscal 2009, 16.6% in fiscal 2008 and 16.7% in fiscal 2007. The increase in fiscal 2009 compared to fiscal 2008 reflects deleverage from the low same store sales increase, primarily in store payroll and field costs, partially offset by savings from cost containment initiatives. Advertising costs as a percentage of net sales in fiscal 2009 were essentially flat to the prior year.

The fiscal 2008 expense ratio was slightly down compared to the prior year with a planned increase in advertising costs (0.1 percentage point) being offset by cost containment initiatives.

Provision for Computer Intrusion related costs: From the time of the discovery of the Computer Intrusion late in fiscal 2007, through the end of fiscal 2009, we cumulatively expensed $171.5 million (pre-tax) with respect to the Computer Intrusion, including a net charge of $159.2 million in fiscal 2008 to reserve for probable losses, costs of $42.8 million incurred prior to establishment of the reserve ($5 million of which was recorded in fiscal 2007) and a $30.5 million reduction in the reserve in fiscal 2009 as a result of negotiations, settlements, insurance proceeds and adjustments in our estimated losses. Costs relating to the Computer Intrusion incurred and paid after establishment of the reserve were charged against the reserve, which is included in accrued expenses and other liabilities on our balance sheet.

As of January 31, 2009, our reserve balance was $42.2 million, which reflects our current estimation of remaining probable losses (in accordance with U.S. generally accepted accounting principles) with respect to the Computer Intrusion, including litigation, proceedings, investigations and other claims, as well as legal, monitoring, reporting and other costs. As an estimate, our reserve is subject to uncertainty, our actual costs may vary from our current estimate and such variations may be material. We may decrease or increase the amount of our reserve to adjust for developments in the course and resolution of litigation, claims and investigations and related expenses and receipt of insurance proceeds and for other changes.

Interest (income) expense, net: Interest (income) expense, net amounted to expense of $14.3 million for fiscal 2009, income of $1.6 million for fiscal 2008 and expense of $15.6 million for fiscal 2007. The changes from year to year relate primarily to interest income which totaled $22.2 million in fiscal 2009, $40.7 million in fiscal 2008 and $23.6 million in fiscal 2007. In fiscal 2008, we generated more interest income due to higher cash balances available for investment as well as higher interest rates earned on our investments.

Income taxes: Our effective annual income tax rate was 36.9% in fiscal 2009, 37.9% in fiscal 2008 and 37.7% in fiscal 2007. The decrease in the tax rate for fiscal 2009 as compared to fiscal 2008 reflects the favorable impact of a $19 million reduction in the FIN 48 tax liability, which reduced the annual effective income tax rate for fiscal 2009 by 1.3 percentage points. This improvement in the annual income tax rate in fiscal 2009 was offset by the absence of a fiscal 2008 favorable tax benefit of 0.4 percentage points relating to the tax treatment of our Puerto Rico subsidiary. See Note J to the consolidated financial statements.

The increase in the tax rate for fiscal 2008 as compared to fiscal 2007 reflects the absence of some fiscal 2007 one-time benefits as well as an increase due to certain FIN 48 tax positions, partially offset by the favorable impact of increased income at our foreign operations and increased foreign tax credits relating to the tax treatment of our Puerto Rico subsidiary.

Income from continuing operations: Income from continuing operations was $914.9 million in fiscal 2009, $782.4 million in fiscal 2008 and $787.2 million in fiscal 2007. Income from continuing operations per share was $2.08 in fiscal 2009, $1.68 in fiscal 2008 and $1.65 in fiscal 2007. Unlike many companies in the retail industry, we did not have a 53rd week in fiscal 2007, but did have a 53rd week in fiscal 2009. We estimate the 53rd week in fiscal 2009 favorably affected earnings per share by $0.09 per share.

The reduction in the Provision for Computer Intrusion related costs in fiscal 2009 benefited income from continuing operations by approximately $18 million, after-tax, or $0.04 per share. The charge relating to the Computer Intrusion related costs in fiscal 2008, adversely affected income from continuing operations by approximately $119 million, after tax, or $0.25 per share.

Changes in foreign currency exchange rates also affected the comparability of our results. Changes in currency rates reduced earnings per share by $0.05 per share in fiscal 2009 as compared to an increase of $0.01 per share in fiscal 2008. Changes in foreign currency exchange rates increased fiscal 2008 earnings per share by $0.05 per share in comparison to fiscal 2007.

In addition, our share repurchase program affects the comparability of earnings per share. We repurchased 24.0 million shares of our stock at a cost of $741 million in fiscal 2009; we repurchased 33.3 million shares at a cost of $950 million in fiscal 2008; and we repurchased 22.0 million shares at a cost of $557 million in fiscal 2007.

Discontinued operations and net income: All historical income statements have been adjusted to reflect the sale of Bob's Stores in fiscal 2009 and the closure of 34 A.J. Wright stores in fiscal 2007 as discontinued operations. Including the impact of discontinued operations, net income was $880.6 million, or $2.00 per share, for fiscal 2009, $771.8 million, or $1.66 per share, for fiscal 2008 and $738.0 million, or $1.55 per share, for fiscal 2007.

Segment information: The following is a discussion of the operating results of our business segments. In the United States, our T.J. Maxx and Marshalls stores are aggregated as the Marmaxx segment, and HomeGoods and A.J. Wright each is reported as a separate segment. TJX's stores operated in Canada (Winners and HomeSense) are reported as the Canadian segment, and TJX's stores operated in Europe (T.K. Maxx and HomeSense) are reported as the European segment. We evaluate the performance of our segments based on "segment profit or loss," which we define as pre-tax income before general corporate expense, Provision for Computer Intrusion related costs and interest. "Segment profit or loss," as we define the term, may not be comparable to similarly titled measures used by other entities. In addition, this measure of performance should not be considered an alternative to net income or cash flows from operating activities as an indicator of our performance or as a measure of liquidity. Presented below is selected financial information related to our business segments:

Marmaxx:



                                                                    Fiscal Year Ended January
Dollars in millions                                                2009           2008           2007


Net sales                                                    $ 12,362.1     $ 11,966.7     $ 11,531.8
Segment profit                                               $  1,155.8     $  1,158.2     $  1,079.3
Segment profit as a percentage of net sales                         9.3 %          9.7 %          9.4 %
Percent increase in same store sales                                  0 %            1 %            2 %
Stores in operation at end of period
T.J. Maxx                                                           874            847            821
Marshalls                                                           806            776            748


Total Marmaxx                                                     1,680          1,623          1,569


Selling square footage at end of period (in thousands)
T.J. Maxx                                                        20,543         20,025         19,390
Marshalls                                                        20,388         19,759         19,078


Total Marmaxx                                                    40,931         39,784         38,468

Net sales at Marmaxx increased 3% in fiscal 2009 as compared to fiscal 2008. Same store sales for Marmaxx were flat in fiscal 2009 compared to a 1% same store sales increase in fiscal 2008.

Sales at Marmaxx for fiscal 2009 reflected increased customer traffic offset by a decrease in the value of the average transaction. Categories that posted same store sales increases included footwear and accessories, children's clothing and dresses. During fiscal 2009, we added expanded footwear departments to approximately 220 Marshalls stores, which nearly completes the expansion of footwear departments at Marshalls. Home categories at Marmaxx reported same

store sales decreases in fiscal 2009. Geographically in fiscal 2009, same store sales in the Northeast, Midwest and Mid-Atlantic regions were above the chain average, while same store sales in the West Coast, Florida and the Southeast were below the chain average.

Segment profit as a percentage of net sales ("segment margin" or "segment profit margin") decreased to 9.3% in fiscal 2009 from 9.7% in fiscal 2008. Segment margin was negatively impacted by an increase in occupancy costs as a percentage of net sales (0.5 percentage points) due to deleverage on the flat same store sales. This decrease was partially offset by an increase in merchandise margin (0.1 percentage point) due to increased markon. As of January 31, 2009, average per store inventories, including inventory on hand at distribution centers, were down 4% compared to a 2% decrease at the prior year end. The decreases in average inventories were primarily due to continued focus on maintaining a liquid inventory position.

Segment margin for fiscal 2008 increased to 9.7% compared to 9.4% in fiscal 2007. Segment margin was favorably impacted by merchandise margins, which increased 0.4 percentage points (as a percentage of net sales) due to lower markdowns and a higher markon, as well as some expense leverage due to our cost containment measures. These improvements in segment margin were partly offset by an increase in occupancy costs and a planned increase in advertising expense.

We expect to open approximately 17 new stores (net of closings) in fiscal 2010, increasing the Marmaxx store base by 1% and increasing its selling square footage by 1%.

Canada:



                                                                     Fiscal Year Ended January
U.S. Dollars in millions                                            2009          2008          2007


Net sales                                                      $ 2,139.4     $ 2,040.8     $ 1,740.8
Segment profit                                                 $   236.1     $   235.1     $   181.9
Segment profit as a percentage of net sales                         11.0 %        11.5 %        10.4 %
Percent increase in same store sales                                   3 %           5 %           5 %
Stores in operation at end of period
Winners                                                              202           191           184
HomeSense                                                             75            71            68


Total                                                                277           262           252


Selling square footage at end of period (in thousands)
Winners                                                            4,647         4,389         4,214
HomeSense                                                          1,437         1,358         1,280


Total                                                              6,084         5,747         5,494

Net sales for the Canadian segment for fiscal 2009 increased by 5% over fiscal 2008. Currency exchange translation reduced fiscal 2009 sales by approximately $68 million. Same store sales increased 3% in fiscal 2009 compared to a strong increase of 5% in fiscal 2008. Same store sales of outerwear, footwear, jewelry and accessories were above the segment average, while HomeSense same store sales were below the segment average for fiscal 2009.

Segment profit for fiscal 2009 increased slightly to $236 million compared to $235 million in fiscal 2008, while segment margin decreased 0.5 percentage points to 11.0%. Currency exchange translation reduced segment profit by $11 million for fiscal 2009, as compared to fiscal 2008. However, because currency translation impacts both sales and expenses, it has little or no impact on segment margin. In addition, the mark-to-market adjustment of inventory related hedges reduced segment profit in fiscal 2009 by $1 million, in contrast to a $5 million benefit of the mark-to-market adjustment of inventory related hedges in fiscal 2008 which adversely impacted segment margin comparisons by 0.3 percentage points. Segment margin for fiscal 2009, reflected increases in . . .