The company made a $14.5 million profit in the year to June 30, down from $19.5 million the previous year.
Chairman, Bill Stevens, said same store sales, which strips out the effects of newly opened or closed outlets, had dropped in the first six weeks of fiscal 2015.
“The company has had a challenging start to FY2015 with the first weeks of the year yielding negative comparable store sales,” he said.
The sales slump comes as the company changes its layout across its entire shop network.
Stevens expects the changes will start yielding positive results in the next quarter, with the company aiming for underlying profit growth in 2015.
“Assuming a more positive trend in consumer sentiment in the coming weeks, the company is targeting growth in underlying profit in FY2015,” he said.
“We have the opportunity to leverage our fixed cost base against the growth that comes from opening 87 new stores over the last two financial years.”
Total revenue was up 15 per cent off the back of the company’s strong store growth over the past two financial years.
But comparable sales were down after a sharp fall from May.
“This has been an extremely challenging year for the retail sector in Australia and for the Reject Shop in particular,” Stevens said.
“The weak performance during the pre-Christmas and easter trading periods and the significant decline in sales in the May to June period led to an overall decline in comparable sales for the year.”
Shareholders will be paid a fully franked final dividend of 8.5 cents per share, down from 13 cents last year.