The Reject Shop has reported a four per cent lift in first-half net profit and says retail conditions are expected to remain weak in the short term.
The Reject Shop said net profit for the 26 weeks to December 25, 2011, came in at $16.55 million, up from $15.91 million in the prior corresponding period.
Sales rose 6.1 per cent to $292.8 million, The Reject Shop said in a statement on Wednesday.
The Reject Shop managing director Chris Bryce said he was pleased with the performance.
"This is a solid result given the current retail market and the significant constraints placed on the business as we recovered from the impacts of last year's floods," Mr Bryce said in a statement.
Mr Bryce said trading during the first seven weeks of the second half of fiscal 2012 had been positive compared with the prior corresponding period.
"However, on balance, the retail climate has not improved," Mr Bryce said.
"Few indicators suggest a rebound in retail spending in the short term.
"Consumers, clearly, remain cautious and the constant discounting and speculation over store closures by other retailers indicate sluggish sales across the retail sector."
In terms of company guidance, The Reject Shop said net profit for the full fiscal 2012 year was expected to come in between $20.5 million and $22 million.
The full fiscal 2012 result would include a 53rd week, compared with 52 weeks in fiscal 2011.
If the result prints in line with company expectations, it would be up between 26.8 per cent and 36 per cent from the $16.17 million achieved in fiscal 2011.
Mr Bryce said he expected it to be another challenging half.
The company declared an interim dividend of 24 cents per share, fully franked.
