The Reject Shop (TRS) H2 2024 earnings summary

Executive summary

• FY 2024 sales reached AUD 852.7 million, up 4.1% year-over-year, with comparable store sales up 2.6%.

• Gross profit (pre-AASB 16) was AUD 339 million, up 5% year-over-year, while EBIT (pre-AASB 16) fell 41.3% to AUD 5.4 million.

• Statutory NPAT was AUD 4.7 million, down 36% compared to the prior period, reflecting margin and cost pressures and the absence of prior year one-off insurance income.

• The business ended the year with a strong balance sheet: AUD 50 million in cash, no drawn debt, and 385 stores nationwide.

• Interim dividend of AUD 0.10 per share paid (80% of FY 2024 NPAT); no final dividend declared.

Financial highlights

• Gross profit margin (pre-AASB 16) improved by 35 basis points to 39.8% year-over-year.

• Comp store sales grew 2.6% for the year, with stronger growth in the second half (3.1%).

• Cost of doing business margin increased to 37.7% of sales from 36.8% last year.

• Store labor costs rose to 14.6% of sales, up from 13.6% last year.

• Inventory closed at AUD 146.4 million, up from AUD 135.6 million, mainly due to higher consumables inventory; stock turn declined to 3.5x.

Outlook and guidance

• FY 2025 focus areas: improving gross profit margin, managing costs in a high inflation environment, and expanding the store network.

• 15-20 new store openings targeted for FY 2025, with about five closures expected.

• Gross profit margin expected to be in the 40%-41% range, with product mix above 50% consumables.

• Early FY 2025 sales up 1.5% year-over-year, comp store sales up 0.3%.