TRS

The Reject Shop (TRS)

The Reject Shop (TRS)

About the company

The Reject Shop is engaged in operating a chain of retail stores. The company's stores offers various common consumer merchandise, with special concentration on daily requirements such as personal care products, home ware, toiletries, cosmetics,hardware, household cleaning products, basic furniture, confectionery, kitchenware, and snack food; and cyclic merchandise like seasonal cards, gifts, and packaging, toys, home decorations and leisure items. The Reject Shop operates over 400 stores in Victoria, New South Wales, Queensland, Western Australia, South Australia, and Tasmania. The business primarily operates in Australia, where it is headquartered in Kensington, and employs around 550 people.

The company recorded revenues of A$523.1 million (approximately $517.5 million) in the fiscal year ended June 2011, an increase of 11.1% over 2010. The company's operating profit was A$26 million (approximately $25.7 million) in fiscal 2011, a decrease of 20.6% compared to 2010. Its net profit was A$16.2 million (approximately $16 million) in fiscal 2011, a decrease of 30.7% compared to 2010.

Business Description

The Reject Shop operates in the discount variety retail sector in Australia. The company operates over 400 stores across New South Wales, Victoria, South Australia, Queensland, Western Australia and Tasmania. The company is involved in the retailing of discount variety merchandise. The company offers lifestyle and seasonal merchandise products such as seasonal gifts, cards and wrapping, toys, leisure items and home decorations. The Reject Shop operates a wholly owned subsidiary, TRS Trading Group.

Competitor Anlaysis: Woolsworth LImitied

Woolworths Limited (Woolworths or 'the company') owns and operates retail stores that sell food, liquor, fuel, general merchandise and consumer electronics. Woolworths is a separate business entity from its British namesake, Woolworths Group plc. The company primarily operates in Australia and New Zealand. It is headquartered in New South Wales, Australia and employed more than 190,000 people as of June 26, 2011.

The company has been reducing prices and positioning its retail formats to improve the value proposition. Reduction in prices has been an important measure adopted by the company to retain customers. The success of the positioning is reflected in the strong performance recorded even during economic downturn. During the third quarter ended April 2012, BIG W registered sales of A$931 million (approximately $918.8 million), a 1.4% increase compared with A$918 million (approximately $906 million) during the third quarter of FY2012. Cost price reductions were passed onto customers and the segment witnessed an increase in customer footfall and items sold during the third quarter of FY2012.

Woolworths has registered strong growth in its profitability in the past few years. The company's operating profit and net profit both increased at a CAGR of 8% during FY2009-11. The company's strong supply chain management has been the key to its robust financial performance The company has transformed its supermarket supply chain through the implementation of various systems including StockSmart (distribution centre forecast based replenishment), AutoStockR (store forecast based replenishment), warehouse management and transport management.

Key Financials of TRS

Income Statement

(In Thousands)

Total Revenue

562,939

EBITDA

31,193

Operating Income

34,220

Net Income

21,923

Revenue per Share

21.24

EPS - Net Income - ...