Why is the Reject Shop share price powering ahead 20% today?

The retailer has announced a major new appointment and an FY22 update.

| More on:
Woman looks amazed and shocked as she looks at her laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Reject Shop share price is soaring 20% today 
  • The company has named a new CEO with 30 years of retail experience 
  • The board is also weighing up whether to conduct an on-market share buyback 

The Reject Shop Ltd (ASX: TRS) share price is soaring today amid a new appointment by the company.

The retail company’s shares are currently swapping hands at $3.42, a 20% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) is rising 0.53% today.

So what news is driving the Reject Shop share price higher today?

New CEO

The Reject Shop has named Phillip Bishop as the company’s new CEO. He will commence in the role on 11 July and will receive $650,000 per year.

Bishop has 30 years of experience in retail, including senior roles at Bunnings and Office Works.

The Reject Shop noted Bishop has delivered sustained growth in these roles through his focus on the needs of customers.

The company said it is now “well positioned” with a lower cost base and talented senior leadership team.

Commenting on the news, chairman Steven Fisher said: “As the company transitions into the ‘grow’ phase of the turnaround strategy, I am confident that Phil is the right person to lead the company.”

In response, Bishop thanked the board for the appointment and outlined his growth plans for the company. He said:

In my view, there is a significant opportunity to grow The Reject Shop through better understanding its customers, continuing to evolve the product offering and continuing to expand the store network.

Capital management update

The Reject Shop share price could also be gaining on the back of the company’s capital management update.

It said it is continuing to trade consistently with management expectations and broker consensus in FY22. In financial results delivered in February, the Reject Shop did not provide a specific guidance for FY22. However, the company outlined plans to open 15 new stores and close four.

The company plans to deliver FY22 results in late August after the completion of an audit.

The Reject Shop is also looking into conducting an on-market share buyback. If the board proceeds with this, shareholders will be informed next month or in August.

Reject Shop share price snapshot

The Reject shop share price has dived 39% in the past year, while it is falling nearly 54% year to date.

For perspective, the benchmark ASX 200 has descended 10% in a year.

In the past month, the company’s shares have fallen more than 9%, while they are down 5% in the past week.

Reject shop has a market capitalisation of about $125 million based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

a couple look dumbfounded with exaggerated looks of surpirse on their faces as te mman holds a phone in his hand.
Broker Notes

Buy this ASX share where 87% of its value is real estate: expert

With such valuable property assets, the operating business is pretty much a freebie at the current stock price.

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Consumer Staples & Discretionary Shares

What’s impacting the Wesfarmers share price on Thursday?

A change of management of an important business has put Wesfarmers in focus.

Read more »

a woman pushes a man standing in a shopping trolley pointing ahead far off into the distance.
Consumer Staples & Discretionary Shares

Why has the Coles share price outperformed the ASX 200 by more than 10% in 2022 so far?

The supermarket stock has taken off this year and brokers are tipping it will go higher.

Read more »

Sports fans looking at smart phone representing surging pointsbet share price
Consumer Staples & Discretionary Shares

Why is the Pointsbet share price up 8% on the ASX today?

Pointsbet shares are smashing the ASX 200 today.

Read more »

Group of people sitting around table outdoors and toasting glasses.
Consumer Staples & Discretionary Shares

Winner winner chicken dinner: Expert names 2 ASX shares to buy now

Consumer staple stocks might fare well as Australians tighten their belts. But investors still need to be selective.

Read more »

Young girl drinking milk showing off muscles
Consumer Staples & Discretionary Shares

Own A2 Milk shares? Here’s how the company is battling to rebuild lost daigou sales

The milk and infant formula company has a plan to revive its fortunes.

Read more »

Supermarket trolley with groceries going up the stairs with a rising red arrow.
Consumer Staples & Discretionary Shares

The Woolworths share price leapt 5% in July, what’s in store now?

What do these two ASX brokers reckon is in store for Woolies shares?

Read more »

Consumer Staples & Discretionary Shares

Why did the Bapcor share price outpace the ASX 200 on Tuesday?

Could a director change be as good as holiday for the Bapcor share price?

Read more »