The Warehouse Group has witnessed a plunge in net profit in FY22 as sales declined across its Torpedo7, Warehouse Stationery, Noel Leeming, and Themarket.com brands amid the higher cost of living leading to lower consumer spending.

The group booked a net profit of $29.9 million in the 12 months to July 30, down 65.6 per cent from the previous year.

“While we remain committed to our strategy, the alignment of these events has put pressure on our business and led to a disappointing overall result for FY23,” said Nick Grayston, CEO of The Warehouse Group.

The group’s outdoor adventure brand Torpedo7 brand saw a 5.4 per cent decrease in sales to $162.2 million, while Warehouse Stationery’s sales slid 0.4 per cent to $1.06 billion.

Its electronics store Niel Leeming saw sales decline 3.3 per cent to $1.06 billion, while The Market.com’s sales fell 32.6 per cent to $33.7 million.

The Warehouse Group’s overall retail sales still climbed 3.2 per cent to $3.4 billion as transactions at its flagship store The Warehouse rose 9.6 per cent to $1.9 billion, the highest annual figure in its history.

“Our immediate focus is to address Torpedo7’s performance by improving gross margin and reducing excess stock and the business’s cost base. We have a big challenge in front of us. We know Kiwis love the outdoors, so we believe it’s a category worth fighting for. This will be a major focus for FY24, and we will provide an update at our half-year,” said Grayston.

The group’s gross profit margin declined to 33.4 per cent. Grayston said that the company will continue its focus on improving financial performance for FY24.

“Looking ahead, we anticipate that FY24 will be challenging for our customers as they face into an unpredictable economic outlook, and we know we have an important part to play in offering Kiwis great value on the things they need most.”