Unexpectedly poor Christmas business has led to a 16 per cent drop in half year profit for discount retailer The Reject Shop.
The company made a $16.9 million net profit in the six months to December 31, down from $20 million in the same period a year earlier.
Revenue grew by 18 per cent to $385 million, mostly due to the opening of 33 new stores during the period, and growth from stores opened in the previous year.
Comparable store sales were flat.
Managing director Chris Bryce said outlets in major shopping centres were dragging down good growth in other store locations, particularly during Christmas trade.
The company predicts its full year profit will be between $17 million and $18 million.
That's down on the previous full year forecast of $19.5 million, which included a $2 million insurance recovery relating to an earlier period.
Mr Bryce said The Reject Shop would push on with plans to open another 12 stores in the second half, but the company would continue to monitor costs and long-term feasibility of its outlets.
"We will close stores if appropriate terms are not achieved," he said.
"We have closed one store during the period with a further four stores currently under negotiation which may close this half."
The company's shares gained 10 cents to $10.75.
