But the big surprise was the news yesterday that Chris Bryce, the long time CEO of the discount retailer The Reject Shop (TRS), had quit and will leave the retailer at the end of the current financial year.
Mr Bryce had been with The Reject Shop for 11 years and was appointed CEO in 2009.
The news saw the company’s shares jump by 3.5% to close on $10.66, after touching a high of $10.94, which was up 6%.
The company also told the ASX that it was still on track to meet its weaker second half earnings targets, and full year profit guidance for fiscal 2014.
It said comparable store sales remained positive for the season to date, gross margins were on plan and three new stores had been opened this half to date.
Mr Bryce’s departure comes a month or so after The Reject Shop confirmed an earlier surprise downgrade that a weaker -than-expected Christmas trading period had slashed sales and earnings, meaning a lower than expected profit forecast for the full financial year.
The discount retailer reported a 16% fall in net profit to $16.9 million for the first half, with comparable sales (the best indicator of retail performance) growth flat for the first half. Dividend was cut as well.
It cut full-year profit forecast to a range of $17-$18 million, down from the $19.5 million for the previous year, which included a $2 million insurance recovery (resulting from the Ipswich floods in 2011 which damaged its new big warehouse and distribution centre).
TRS 1Y – The Reject Shop loses a CEO after weak half
As a result of the weak first half performance and powered full year forecast, the company said it was hauling back on its aggressive expansion plans to better match store and sales growth to earnings.
But Mr Bryce won’t be there to oversee this change, raising questions about whether he agreed with it. No reason was given by the company for the sudden departure of the CEO.
The company said in its announcement yesterday that Mr Bryce would work with the board this financial year and to ensure appropriate planning was in place for 2014-15.
The company said the board had commenced a national and international search for Mr Bryce’s successor and would update the market in due course.
The retailer has also been hurt by the slide in the value of the Australian dollar, with much of its range of housewares, clothing, gardening tools, gift ideas and toys sourced from overseas.
It has also faced fresh competition from a new breed of low-priced retailers and from bigger chains such as Kmart which is marketing directly against The Reject Shop, as well as against Big W and other smaller competitors.
