The Warehouse Group has reported an increase in sales during its first half, but warned that volatile trading conditions may impact full-year financial performance.

The group – which owns The Warehouse ‘red sheds’, Noel Leeming, Torpedo7, Warehouse Stationery, and The Market – said that for the six months to January 29, sales grew 4.8 per cent to $1.8 billion while reported tax-paid profit fell 60.9 per cent to $17.4 million compared to the previous year.

Gross profit declined 1.2 per cent to $592.4 million impacted by a product category mix in The Warehouse brand, increased clearance activities and investment in the MarketClub membership program.

The Warehouse division recorded a 13.2 per cent increase in sales to $1 billion with grocery sales up 34 per cent compared to the prior period.

Warehouse Stationery registered a 1.7 per cent increase in sales to $124.1 million while appliance chain Noel Leeming’s sales fell 4.5 per cent to $556.7 million as consumers began tightening their wallets.

Torpedo7 sales were also down 1.1 per cent during the half to $96.4 million as demand across bike and fitness categories fell coupled with a weather-related decline impeding growth.

Group CEO, Nick Grayston, said the business experienced a “very challenging retail trading environment” during the past six months.

“While the macroeconomic outlook remains unpredictable, we are taking action to ensure the ongoing improvement in operational performance.

“We are committed to our strategy to create a future-fit retailer to deliver great value for our customers, as well as completing existing major programmes of work to deliver operational efficiencies,” said Grayston.

• Further reading: The Warehouse Group posts sales increase across all brands