Focusing on everyday items a win for the Reject Shop
The Reject Shop was staring down the barrel of a grey future at the end of last year following heavy falls in the share price but a simple change has made all the difference.
The discount store has introduced increased stock of its everyday items such as tissues and laundry powder and the change has made a notable difference as customers have started to come back to the store.
The company recorded a profit of $17.7 million for the first half of the financial year, a figure that is up 1.1% on the previous period of the same time. The report also saw The Reject Shop rise in share price up 13% to close out the day at $6.67.
Ross Sudano, the managing director of the firm said that the company had to make a number of small changes across the board and the bringing back of everyday items and a reduction in promotional variety has led to success.
The firm has experienced a rise in sales and a rise in customer numbers over this period highlighting the success of the changes made despite an overall reduction in the number of items sold. However, this reduction is mostly due to an increase in competition in Western Australia.
The overall sales increase, up 1.1% to $437.6 million, can largely be attributed to a well-received Christmas offering and the introduction of 6 new stores to bring the firms total to 353. Shareholders are set to receive 24 cents per share.
Mr Sudano said that one of the major goals for The Reject Shop was improving product availability in order to better satisfy customers and to have achieved this was pleasing. He continued to say that the key selling lines were now at some of the highest levels of sales that the business has seen and that the product availability and process improvements was now a part of the company’s core.
Despite the strong momentum from the first half of the financial year, the company is expecting to only make a full year profit between $16.5 million and $17.5 million with a net loss expected for the second half of the year.
Regardless, Mr Sudano says that the positive result for the full year would be a “significant turnaround” for The Reject Shop given the $12.3 million profit that the business made last year.
The Reject Shop saw its share price almost half in April last year and has since slowly recovered and was boosted by the results of the first half report.
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