Warehouse Group posts ‘encouraging’ results

the_warehouse_storeNew Zealand’s dominant discount retailer The Warehouse Group has posted an increase in third quarter retail sales saying its strategy is now gaining traction.

The group announced its sales has increased 2.6 per cent to $701.2 million for the quarter ending April 29 compared to the same quarter last year.

The retailer has also kept intact its full-year earnings forecast of $50 million to $53 million, a 25 per cent decline from the previous year.

The Warehouse Group said the recent results are very encouraging compared to the 0.9 per cent decline experienced in the first half of the year.

Nick Grayston, group CEO, said the sales growth achieved for the third quarter shows a positive turnaround from the first half year, which was impacted by major changes to their pricing strategy and operations.

“The third quarter sales results are in-line with expectations and consequently our full year profit guidance remains unchanged, subject to any material changes in anticipated trading conditions,” the company said in a statement.

Grayston said Noel Leeming has once again delivered a strong quarter of sales growth. Noel Leeming saw an 11.2 per cent increase for the quarter to $212.2 million. Same store sales increased 6.8 per cent in the quarter.

The Warehouse (‘Red Sheds’) sales for the third quarter has seen a 0.9 per cent decrease compared to the same quarter last year. Same store sales decreased 2.4 per cent in the quarter.

Grayston said that overall gross margins saw a reduction compared to the same quarter last year.

“Following the completion of the pricing strategy transition to EDLP, our focus has turned to price optimisation with a view to improving our margins going forward,” he said.

Group online sales (NZ) were $48.6 million for the third quarter, up 6.6 per cent compared to the same quarter last year.

 

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