Source: Radio New Zealand
The Warehouse says its net profit for the six months ended 1 February rose by third on the year earlier, though revenue was little changed. SUPPLIED
Retailer The Warehouse has reported an improved first half net profit despite tough trading conditions.
The retailer, which operated Red Sheds, Noel Leeming and Stationery, said net profit for the six months ended 1 February rose by third on the year earlier, though revenue was little changed.
Chair John Journee said there was clear evidence the group was on the right path, though trading conditions were challenging.
“There is still more to do to restore sustainable returns, and this will take time,” he said, adding work was underway to reinstate dividend payouts to shareholders.
Key numbers for the six months ended 1 February compared with a year ago:
- Net profit $15.7m $11.8m
- Revenue $1.612b vs $1.61b
- Underlying profit $26.9 vs $19.5m
- Gross margin 32.3 percent vs 32.5 percent
- Interim dividend NIL vs NIL
Chief executive Mark Stirton said were encouraging signs improvements were resonating with customers.
“We are seeing customers respond as we get the basics right and deliver clearer value through better ranges and a stronger experience in stores,” Stirton said.
“Our Black Friday, Christmas and Back to School events performed well across the half, while severe weather events in January impacted retail spending overall and affected summer seasonal and outdoor categories at The Warehouse.”
Warehouse Stationery and Noel Leeming saw improved gross profit margins, while the Red Sheds continued to face margin pressure.
“Group gross profit margin declined in the first quarter, driven largely by The Warehouse, where we deliberately cleared aged and seasonal stock, saw softer sales in higher-margin categories, and faced freight pressures. Positively, gross profit margin momentum grew in the second quarter, up 30 basis points, and the quality of sales improved,” Stirton said.
Brand sales for the six months ended 1 February
- Red Shed sales up 0.5 percent to $949.5m – same store sales up 1.2 percent
- Stationery sales up 5.7 percent to $116.1m – same store sales up 1.8 percent
- Noel Leeming sales down 1.2 percent to $542.2m – same store sales down 1.3 percent
The company’s recent changes to operations were aimed at cutting the cost of doing business to less than 31 percent of sales, though would see about 270 head office jobs disappear.
Stirton said disciplined cost control was a key driver of the improved result, with operating profit increasing 38 percent.
Expansion
He said the Group will open new The Warehouse and Noel Leeming stores in Mangawhai in mid-2027 – the first new The Warehouse store since 2023.
“Mangawhai has evolved from a seasonal holiday destination into a growing year-round community. Opening new stores allows us to employ locally and better serve a community that is expanding.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand