ASX:TRS

Stock Analysis Report

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Executive Summary

The Reject Shop Limited operates in the discount variety retail sector in Australia. More Details


Snowflake Analysis

Flawless balance sheet and fair value.


Similar Companies

Share Price & News

How has Reject Shop's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TRS is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: TRS's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

-2.8%

TRS

-2.4%

AU Multiline Retail

-0.3%

AU Market


1 Year Return

65.3%

TRS

13.4%

AU Multiline Retail

-1.8%

AU Market

Return vs Industry: TRS exceeded the Australian Multiline Retail industry which returned 15.2% over the past year.

Return vs Market: TRS exceeded the Australian Market which returned -1.6% over the past year.


Shareholder returns

TRSIndustryMarket
7 Day-2.8%-2.4%-0.3%
30 Day-14.3%-0.3%1.6%
90 Day-6.0%5.0%9.9%
1 Year70.2%65.3%17.7%13.4%1.5%-1.8%
3 Year19.3%5.7%81.3%14.8%26.2%10.7%
5 Year-31.8%-43.5%104.9%18.1%69.0%35.8%

Long-Term Price Volatility Vs. Market

How volatile is Reject Shop's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Reject Shop undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TRS (A$6.53) is trading below our estimate of fair value (A$440.09)

Significantly Below Fair Value: TRS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TRS is poor value based on its PE Ratio (182.4x) compared to the XX Multiline Retail industry average (25.7x).

PE vs Market: TRS is poor value based on its PE Ratio (182.4x) compared to the Australian market (22.4x).


Price to Earnings Growth Ratio

PEG Ratio: TRS is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: TRS is good value based on its PB Ratio (1.7x) compared to the XO Multiline Retail industry average (1.9x).


Next Steps

Future Growth

How is Reject Shop forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

57.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TRS's forecast earnings growth (57.7% per year) is above the savings rate (2%).

Earnings vs Market: TRS's earnings (57.7% per year) are forecast to grow faster than the Australian market (17.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TRS's revenue (1.1% per year) is forecast to grow slower than the Australian market (5% per year).

High Growth Revenue: TRS's revenue (1.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TRS's Return on Equity is forecast to be low in 3 years time (12.5%).


Next Steps

Past Performance

How has Reject Shop performed over the past 5 years?

-46.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TRS has a large one-off loss of A$727.0K impacting its June 28 2020 financial results.

Growing Profit Margin: TRS became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: TRS's earnings have declined by 46.6% per year over the past 5 years.

Accelerating Growth: TRS has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TRS has become profitable in the last year, making it difficult to compare its past year earnings growth to the Multiline Retail industry (-31%).


Return on Equity

High ROE: TRS's Return on Equity (0.8%) is considered low.


Next Steps

Financial Health

How is Reject Shop's financial position?


Financial Position Analysis

Short Term Liabilities: TRS's short term assets (A$170.0M) exceed its short term liabilities (A$165.5M).

Long Term Liabilities: TRS's short term assets (A$170.0M) exceed its long term liabilities (A$113.6M).


Debt to Equity History and Analysis

Debt Level: TRS is debt free.

Reducing Debt: TRS has no debt compared to 5 years ago when its debt to equity ratio was 8.7%.

Debt Coverage: TRS has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: TRS has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Reject Shop current dividend yield, its reliability and sustainability?

1.40%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate TRS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate TRS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TRS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TRS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: TRS is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TRS's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Andre Reich

1

Tenure

AU$872,817

Compensation

Mr. Andre Reich serves as Chief Executive Officer of The Reject Shop Limited since January 13, 2020. Mr. Andre Reich is an experienced retailer with expertise in defining and delivering turnaround and grow...


CEO Compensation Analysis

Compensation vs Market: Andre's total compensation ($USD679.45K) is above average for companies of similar size in the Australian market ($USD508.35K).

Compensation vs Earnings: Insufficient data to compare Andre's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Andre Reich
Chief Executive Officer1yrAU$872.82k1.4%
A$ 3.5m
Danielle Aquilina
Chief Operating Officer1yrAU$849.78k0.024%
A$ 58.1k
Clinton Cahn
Chief Financial Officer0.67yrno datano data
Brendon Short
General Manager of Operations1.83yrsAU$357.39kno data
Michael Freier
General Counsel & Company Secretary4.42yrsno datano data
Kate Lewis
General Manager of Human Resources0.92yrno datano data
Tanya Lomax
Head of Financeno datano datano data
Kelvin Chand
General Manager of Property6yrsAU$338.20kno data

1.0yrs

Average Tenure

Experienced Management: TRS's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
David Grant
Independent Non-Executive Director0.67yrAU$20.52k0.018%
A$ 45.2k
Steven Fisher
Independent Non-Executive Chairman1.25yrsAU$184.60k0.26%
A$ 639.8k
Selina Lightfoot
Independent Non-Executive Director2.42yrsAU$126.09k0.049%
A$ 121.9k
Nicholas Perkins
Non-Executive Director0.67yrAU$19.96k0.074%
A$ 181.9k

1.0yrs

Average Tenure

Experienced Board: TRS's board of directors are not considered experienced ( 1 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: TRS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 32.4%.


Top Shareholders

Company Information

The Reject Shop Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Reject Shop Limited
  • Ticker: TRS
  • Exchange: ASX
  • Founded: 1981
  • Industry: General Merchandise Stores
  • Sector: Retail
  • Market Cap: AU$247.267m
  • Shares outstanding: 38.28m
  • Website: https://www.rejectshop.com.au

Number of Employees


Location

  • The Reject Shop Limited
  • 245 Racecourse Road
  • Kensington
  • Melbourne
  • Victoria
  • 3031
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TRSASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 2004
TRSCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2004
RFDDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2004

Biography

The Reject Shop Limited operates in the discount variety retail sector in Australia. The company retails various general consumer merchandise, including toiletries, cosmetics, homewares, personal care prod...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/15 07:02
End of Day Share Price2021/01/15 00:00
Earnings2020/06/28
Annual Earnings2020/06/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.