The Reject Shop (ASX:TRS) delivered a robust performance in FY24, reporting record sales of $852.7 million, a 4.1% increase year-on-year, despite operating in a challenging retail environment. The company attributes its growth to the successful implementation of a new merchandise strategy that emphasises consistently low prices on branded household essentials and seasonal items.
CEO Clinton Cahn highlighted the positive customer response to the strategy, noting, "During FY24, we generated around 2 million more customer transactions compared to the previous year, a clear indicator that our product offering is resonating with Australians."
However, despite the sales growth, margin pressures persisted due to rising costs and increased shrinkage. The company posted a net profit after tax of $4.7 million, and earnings before interest and tax of $13.8 million. Management's focus on improving gross profit margins showed progress, particularly in the second half of FY24.
Looking forward, The Reject Shop plans to expand its store network, targeting the opening of 15-20 new stores in FY25.
