Warehouse Group posts ‘encouraging’ sales for the quarter
The Warehouse Group has posted a 3.6 per cent increase in first quarter sales to $668.3 million, which, according to the company was encouraging given that sales in the previous corresponding period had fallen 1.7 per cent.
The company also posted improved margins at its core Warehouse chain and stationery outlets. Noel Leeming had the biggest improvement with a 7.4 per cent increase in sales to $209.6 million and a 3.2 per cent increase on a same-store basis.
In the quarter, Noel Leeming acquired the assets of the Appliance Shed, including its leased store locations in Auckland. Three of these stores have been converted into additional Clearance stores for Noel Leeming.
Sales at the Red Sheds rose by $7.2 million to $360.1 million, up 2 per cent or 2.7 per cent on a same-store basis.
Warehouse Stationery reported sales for the first quarter of $61.7 million, an increase of 4.4 per cent or $2.6 million compared to the same quarter last year. Same store sales increased 4.1 per cent in the quarter.
Torpedo7’s sales for the quarter fell 5.6 per cent to $37 million and were down 2.7 per cent on a same-store basis.
According to The Warehouse Group, the decline reflects closures during the past year, including the sale of its Shotgun brand and the closure of the Number 1 Fitness website as a separate fitness equipment channel.
Online sales across the group rose 5.3 per cent to $49.3 million, and now account for 7.4 per cent of group sales. Excluding Torpedo7, quarterly online sales were 27 per cent higher.
The return to sales growth in the quarter comes after five periods of same-store sales declines as the business transitioned to a full EDLP model. Volumes of product sold increased 2 per cent with the remainder of sales growth coming through an increase in average selling price.
The company stated there has been good early demand for some of the spring seasonal categories such as outdoor furniture.
“Our gross margin percentage improved slightly compared to Q1 last year,” according to The Warehouse Group. “The overall market remains very competitive for both general merchandise and apparel.”
The company added it is currently focused on continuing to improve gross margin and maintaining the positive momentum in sales as it goes into the “largest sales quarter” with Christmas and summer seasonal products.