The Reject Shop (TRS) H1 2025 earnings summary

Executive summary

• First half FY25 sales reached $471.7 million, up 2.9% year-over-year, with record first half sales and the highest pre-AASB 16 net profit after tax since 1H18.

• Net profit after tax was $16.4 million (pre AASB 16), up 14.6% year-over-year; statutory NPAT was $15.9 million, up 10.1%.

• Interim fully franked dividend of 12.0 cents per share declared, up from 10.0 cents in the prior period, payable 1 May 2025.

• Nine new stores opened, one closed, bringing the network to 393 stores, with at least 20 more in the pipeline over the next 18 months.

• First half is seasonally stronger due to peak trading in November and December.

Financial highlights

• Gross profit was $196.3 million, up 6.1% year-over-year; gross profit margin improved by 125 basis points to 41.6%.

• EBITDA rose 13.9% to $29.1 million; EBIT increased 16.2% to $22.6 million.

• Comp store sales up 1.5% for the half; Q2 up 2.5%, Q1 up 0.3%.

• Free cash flow of $25.3 million, up 133% year-over-year; net cash position of $74.9 million with no drawn debt.

• Basic EPS: 42.7 cents (up from 38.0 cents year-over-year); operating cash flow: $84.6 million (up from $67.3 million year-over-year).

Outlook and guidance

• On track to achieve targeted gross profit margin of 40.5% for FY25, with current performance slightly ahead.

• Sales in the first seven weeks of 2H25 up 3.6% year-over-year; February sales up 6.1% month-to-date.

• Focus remains on keeping cost of doing business (CODB) flat or only slightly above prior year in 2H.

• Caution that first half performance should not be used as an indicator for the second half due to seasonality.

• Pipeline of approximately 15 new stores for FY26 and beyond.