Discount retail chain The Reject Shop has been forced to lower its expectations for its annual sales and profits due to the fact that the company’s sales have not returned to a pre-COVID standard.
The Reject Shop told investors on Friday morning that trading has continued to be difficult in recent months, with weakness felt more severely in the company’s downtown and metropolitan stores.
Overall, same-store sales for the 48 weeks through the end of May were down 1.4% from a year ago, with CBD and shopping center locations down 12% while the rest of the network was up 0.9%.
In addition to this, Reject Shop also incurs higher shipping costs due to COVID, especially for international shipments.
âAs management has worked to offset these headwinds through cost reduction, the company expects sales for fiscal 21 to be between $ 776 million and $ 778 million and EBIT for the year. year 21 between 8 and 10 million dollars. The company said.
âIt should be noted that trading conditions remain unpredictable in June, especially in light of the current COVID-19 lockdown in Melbourne and COVID-19 related restrictions in the Victoria area.
“Like many other retailers, The Reject Shop doesn’t expect sales to normalize until more of the population is vaccinated against COVID-19.”
The retailer also announced that it had appointed Margaret Zabel, former director of marketing for McDonald’s Australia, as an independent non-executive director.
Shares of the $ 245 million company closed at $ 6.32 on Thursday, up from a price of around $ 8 in December. The Reject Shop has lost 8.3 percent so far this year.