In short: A disclosed trim, made against the owner's own preference and against a headline beat. Simpson: "It hurts me to do it because it's one of my favorite stocks. We've owned it for a really long time… they beat on the top line, they beat on the bottom line. At a cursory look, I thought, man, this stock's behaving completely wrong. It should be moving higher — until you look at the core business, which is Marmaxx, TJ Maxx, Marshalls. They were up 1% on the quarter versus a 6% previous quarter." He gives the bull rebuttal himself — "there can be some seasonality with these things. And if there is a K consumer or a K economy, both sides of the K go to TJ Maxx, both go to Home Goods, both go to Marshalls" — and then defers to the tape anyway: "we still have a 3% position. The stock's breaking down. I'm going to have to react to that and respond."
TJX runs TJ Maxx, Marshalls and HomeGoods — off-price retailers that buy surplus branded inventory and sell it cheaply. Simpson trimmed a long-held favourite, and how he got there is the transferable bit.
The headline numbers beat on both revenue and profit, and the stock still behaved badly. Rather than concluding the market was wrong, he looked underneath and found the reason: Marmaxx, the core US division, grew comparable sales 1% against 6% the previous quarter. A beat driven by everything except the main business is a weaker beat than it looks.
He then argues against himself out loud — this could be seasonal, and in a two-tier economy both the squeezed and the comfortable shop at off-price stores — and trims anyway, because the chart is breaking down. That order of operations is the discipline: form the view, check the specific line that would falsify it, and let price arbitrate when the two disagree.
In short: Comps came in at 4%, the guide "wasn't great," and they're opening more stores — which Wapner notes the street doesn't love. Simpson had hedged into it: "right at the close yesterday, before the earnings report today, we wanted to hedge half the position, so I sold a 152½ covered call — pretty tight, 1% out of the money. If you were to annualise this covered call, which you can't really do in real life, the math works out to a 600% annualised premium on a call that expires on Friday. It's just a fun trade." His read on the print: "I did think the numbers were good. What the street probably didn't like was the third-quarter guide. But they didn't bring their guide down for the full year. Maybe the Marshalls and TJ Maxx store sales were a little light, but HomeGoods was great, International was great — this was a bit of sell the news." Terranova is harder on it: "that's the challenge for what we saw today — 60% of the business is Marmaxx, TJ Maxx and Marshalls, and you can't miss there. You can't have comp sales come in light. That's been the strength of the business, the story we've all been telling for the last several years."
TJX owns TJ Maxx, Marshalls and HomeGoods. Its results were solid — comparable-store sales up 4%, full-year guidance untouched — but the outlook for the current quarter disappointed and the stock sold off.
The instructive part is Simpson's hedge. Just before the report he sold "covered calls" against half his position: he collected a cash premium in exchange for agreeing to sell those shares at $152.50 if the stock rose above that. That caps his upside on half the holding but cushions a decline. Because the option expired within days and the premium was large, the return works out — if you could repeat it endlessly, which you cannot — to about 600% a year.
Terranova's objection is about where the weakness sat. Roughly 60% of the business is the Marmaxx division (TJ Maxx and Marshalls), and that is precisely where sales came in light. HomeGoods and the international business being strong doesn't compensate when the core misses.
In short: The tenant upgrade that makes the Primaris story work: "what would you rather have — Hudson's Bay as a tenant, or a grocery store, or a TJX or Winners… with a better balance sheet?" Counterparty-quality reference.
36:09So that's one stock that I think will be a very conservative compounder going forward because and the opportunity to buy that name and I think why it's done so well this year because not so long ago a year ago where you saw Hudson's Bay go to zero right and so there was this negativity around but they've been able to play they're replacing the tenants they're improving the tenants what would you rather have Hudson's Bay as a tenant or have a grocery store or have a TGX or Wyinners or low cost with a better
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.