The Reject Shop has slashed its half yearly profit guidance for FY19 by approximately 40 per cent.

Initially the retailer hoped to match its 1H18 result of $17.7 million, though, in preparation for its upcoming annual general meeting, provided an updated guidance of between $10 million and $11 million.

However the “extremely weak retail environment” saw sales deteriorate in the first 15 weeks of the year, with comparable sales falling 2.4 per cent, and the past eight weeks seeing a 3.9 per cent fall.

“We understand and acknowledge this is extremely disappointing news for our shareholders,” The Reject Shop managing director Ross Sudano said.

“We are doing everything within our power to manage the business for profitable growth through this extremely challenging consumer environment.”

Sudano goes on to note that decreased consumer spending has been influenced by stagnant wage growth as well as as increases in the cost of expenses, specifically pointing to mortgage rates.

“Despite the challenges with sales in the first 15 weeks, we continue to manage our inventory particularly well and expect to do so over the remaining weeks of the financial year,” Sudano said.

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