TRS Bull Case

Couple of issues to consider on TRS:

- Discount variety retailers in the US (Dollar General, etc) have been doing well despite the rise of Amazon.
- TRS has leading share in its segment (30%-35% share), providing significant scale advantages
- Recent investment in a new DC should provide earnings support, despite near term revenue challenges;
- P/E have owned this stock before, and must be running the numbers again now given the current share price
- Low fixed charge cover looks bad, but TRS has no debt and an expected near term increase in debt (from DC restructuring), could be fully repaid from one years cashflow (even assuming weak revenue trends continue).
- Short leases provide opportunity to continue to close underperforming stores.

Clearly TRS have to get their merchandising offer right (and need a new head of buying), and Aldi and Kmart are significant competitors, but the current share price means either current mgt fix it or someone else will. Either way it looks cheap.