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Warehouse Group profit surges to $655m

NZ NewswireNZ Newswire 10/11/2016 Tina Morrison

Warehouse Group, New Zealand's largest publicly listed retailer, increased first-quarter sales with uplifts across all its brands ahead of the key Christmas trading period.

The Auckland-based company said group sales rose 3.9 per cent to $655.9 million in the quarter ended Oct. 30, from the year-earlier quarter when sales increased 7.7 per cent.

The company's 'red shed' Warehouse stores, which make up more than half of its total sales, increased revenue 1 per cent to $377.5m in the quarter as weaker sales in areas such as entertainment, stationery and craft, and gardening, were offset by sales growth in the home, leisure and apparel divisions.

"The competitive environment is tougher every year, and with more international players focusing on our domestic market, both physically and online, it is more important for us to execute our plans well, to ensure that we are relevant, competitive and profitable in the future," chief executive Nick Grayston said in a statement.

Noel Leeming, its second-largest unit, boosted first-quarter sales 12 per cent to $183.6m, and the company said it continued to gain market share in an "extremely competitive" appliances and technology market.

Warehouse Stationery sales advanced 1.4 per cent to $63.7m. Torpedo7 sales rose 12 per cent to $37.8m as television advertising campaigns brought in high levels of subscribers and new customers, and it benefited from strong early season bike sales.

The group said its online sales rose 22 per cent to $42.7m, and now make up 6.7 per cent of total sales as its 'click and collect' service benefits Noel Leeming and The Warehouse.

On a same-store sales basis, The Warehouse lifted sales 1.7 per cent, Warehouse Stationery sales gained 2.3 per cent and Noel Leeming sales advanced 11 per cent.

Warehouse shares last traded at $3, and have gained 12 per cent this year.

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