Saturday 5 December 2015

TJX report Q3 2015

TJX, Q3, 2015, front page

One of my latest American retail investments a la Peter Lynch arrived with their Q3 report. Since I am a couple of days late I now longer knows the market response but at least I find the report good.

To read the report in full please go herefor my previous summary please visit TJX report Q2 2015 and to find out more about TJX then please click on analysis of TJX.

It is interesting to see that they are cutting down the amount of stores not only in North America but also in Europe that is supposed to be the new market they are establishing themselves on. For the financial statement below we can see that revenue is however increasing even in this climate of a strong dollar but since the bulk of their market is the US the are not that much influenced by it. For the running nine months the revenue is up at 22 billion USD and it is up by 5.8% compared to 2014. The EPS per share is right now at 2.35 USD but they are still buying back shares and well... I usually love share buyback programs but when a company is being traded above a P/E of 20 then I really wonder if they are not able to do other useful things with that cash. For instance to step into the Polish market. Over 40 million people that are highly interested in brand and fashion luxury products that would love to step into the TK Maxx store to spend their salaries.

TJX,Q3, 2015, financial statetment

Conclusion: The overall picture being displayed by TJX is still good. I do not see them having large issues with a stronger dollar since they are no normal retail store but I also do not like what they are doing with their cash at the moment. That they are closing down plenty of stores is also disturbing me since that means they have over expanded which means that their vision of the amount of stores that they can push into the various European countries might also be based on the strategy of over expansion. Is that a good strategy. It might be... I need to think a little about it. I mean you kill off the few small competitors by doing so and afterwards you shrink in size to stop yourself from self-cannibalism but... well... I need to think it over. Anyway, I will remain as a shareholder in TJX for the time being.

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