The Warehouse Group has reported a net loss after tax of $2.8 million, compared with a loss of $54.2 million in the previous year.

Group sales rose 1.6 per cent to $3.1 billion, although same-store sales were flat year-on-year.

Sales at The Warehouse increased 1.4 per cent to $1.8 billion. The chain’s toy sales rose by 8 per cent, allowing it to reclaim top place in the category among consumers.

FMCG sales rose 7.7 per cent, driven by cosmetics, up 7.8 per cent, and health and wellbeing, up 6.2 per cent.

Warehouse Stationery sales fell 2.5 per cent to $226 million. Noel Leeming sales rose 3.3 per cent to $1 billion.

The group’s gross profit margin declined to 32.2 per cent, while operating profit fell to $1.3 million from $28.9 million as compared to the same period last year.

“In FY25, we reset how we operate,” said group CEO Mark Stirton, who assumed the role in August.

“We simplified our organisational structure and returned to a brand-led model with retail ways of working. We also reset our pricing, improved our product range, and controlled costs and capital expenditure.”

Moving forward, The Warehouse Group plans to improve margins through better sourcing, tighter inflow margin control, and disciplined inventory management.

The company will continue to grow its higher-margin categories, including apparel, health and beauty, home, and toys.

“Economic and retail conditions in New Zealand remain extremely challenging,” said chair Dame Joan Withers.

“Unemployment and inflation remain comparatively high, and consumer confidence is down, putting further pressure on discretionary spending and intensifying retail competition.

“While profitability is not where we want it to be, the decisions made this year have laid the foundation for improved margin and bottom line performance as the economic recovery unfolds.”