Bargain retailer The Reject Shop (ASX:TRS)
has downgraded its guidance for annual gross revenue and earnings, citing the impact of the coronavirus pandemic on trading activity.
The company operates a large portfolio of discount stores in metropolitan and inner-city regions, which experienced lower levels of traffic during lockdowns in the financial year.
Intermittent social restrictions driven by sudden spikes of coronavirus infections have sparked uncertainty among businesses over encouraging employees to return to CBD offices. One such example is the ongoing lockdown in Melbourne, on the back of a surge in cases in Victoria.
Fewer consumers attending office work in these areas have also hampered demand for goods for sale these retail stores. A 12 per cent slump in sales at Inner-city and metropolitan outlets dragged down the company’s overall revenue, as comparable sales for the first 11 months of the financial year dipped 1.4 per cent.
Higher logistical expenses have also taken its toll on the business’ net earnings, as subdued international travel bumped up the shipping costs.
Shares in the Reject Shop (ASX:TRS)
are trading 11.2 per cent at $5.61