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Profit down at TK Maxx owner after DC investment

TK Maxx

TJX International, which operates discount retail chain TK Maxx in Europe and Australia, has posted a fall in Q3 profits after investing in a new UK distribution centre.

Its results for the three months to 28 October, which also include homewares chain Homesense, show that adjusted profits slid by 18.5% to $75m (£56.8m). 

The company said the reduction in profits was largely caused by opening a new distribution centre in Wakefield. The processing facility, at Knottingley, opened in August.

Meanwhile quarterly net sales on a constant currency basis rose by 9% to $1.2bn (£900m), compared with the same quarter last year. Like for like store sales crept up by 1% during the period.

The company opened seven TK Maxx stores in the UK and Ireland during the third quarter, to bring its store count in the region to 363.

Total store count across the UK and Ireland, Germany, Poland, Austria, the Netherlands and Australia stood at 578.

The business hopes to expand to 1,100 TK Maxx and Homesense stores in their existing markets, which currently tallies 633, during the 2018 fiscal year.

The news comes as US retail group TJX Companies, which operates TJX International, reported a flat consolidated like for like store sales rate compared to last year’s 5% increase, after it was hit by hurricane-related store closures and unfavourable weather conditions.

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