The Reject Shop cuts FY guidance

Discount retailer set to fall short of profit forecast as budget hit to sentiment weighs.

Discount retailer The Reject Shop (TRS) will fall short of its profit forecast because of weaker sales caused by warm weather and the federal budget.

The company expects its net profit in the year to June 30 to be between $14.5 million and $15.5 million, below its previous forecast of between $17 million and $18 million.

"The unseasonably warm weather across the country led to a deterioration in sales of winter related departments and ranges during May," The Reject Shop said.

"Further ... it is clear that sales for the balance of May were significantly affected by a drop-off in consumer confidence consistent with generally reported retail conditions during this period."

The federal budget was handed down on May 13, and several measures of consumer confidence have shown sentiment was dented by the government's planned spending cuts.