TK Maxx has posted a slump in full-year profits following investment in new stores and a hike in wage expenses.

The retailer’s UK division, TJX UK, which consists of TK Maxx, HomeSense and, suffered a 21.7% decline in pre-tax profit to £111.4m during the year to January 28.

Operating profit tumbled at an even steeper rate of 34.5% to £90.3m, according to documents filed at Companies House.

The slip in profitability came despite TK Maxx growing sales from £2.43bn to £2.68bn during the year.

But despite the 10.3% jump in total sales, like-for-likes rose at the slower rate of 0.6%.

Administrative expenses weighed on its bottom line after surging 69.4% to £322.5m, as salaries and wages increased 15.8% to £333.5m.

TK Maxx also invested in new stores during the year, opening a net 19 new TK Maxx stores and five HomeSense shops during the 12-month period.

A TJX Europe spokeswoman said: “In a challenging retail environment in the UK in 2016, we were pleased with our results which we believe speak to our resilience and ability to drive sales.

“While our profit results were negatively impacted by wage increases in the UK and expense deleverage on the like-for-like sales, we maintained our inventory management discipline which we believe helped mitigate some of this impact and positioned us strongly to capitalise on the favourable buying environment in Europe for branded, quality merchandise.

“Looking ahead, we remain focused on what we do best, delivering our customers outstanding value on exciting fashions, brands and quality.”