The Warehouse Group has reported a strong uplift in first-half profit, but management expects ongoing conflict in the Middle East to push freight costs higher in the coming period.
The group’s operating profit for the six months ended February 1 rose 37.7 per cent year-on-year to $26.9 million. Reported net profit after tax (NPAT) jumped 33.6 per cent to $15.7 million, and adjusted NPAT soared 67 per cent to $17.9 million.
Group sales were up 0.3 per cent to $1.6 billion, with same-store sales up 0.5 per cent. The Warehouse sales were up 0.5 per cent and Warehouse Stationery sales up 5.7 per cent, while Noel Leeming fell 1.2 per cent.
Chairman John Journee said the group delivered solid results despite volatile consumer confidence and highly competitive retail conditions.
“New leadership and a new operating model are now in place, and we are seeing the benefit through stronger cost discipline and execution. There is still more to do, and it will take time to restore sustainable returns,” Journee added.
For the first six weeks of the second half, sales have been down 0.2 per cent. Journee cited slow economic recovery and challenging trading conditions amid ongoing global volatility.
“International conflict has created further uncertainty for New Zealanders. Rising fuel prices and potential disruption, along with congestion across key shipping routes, are expected to push freight costs higher in the period ahead,” the chairman said.
“While the full impact on supply chain and consumers remains uncertain, management is closely monitoring conditions with planning underway. We are working with external stakeholders to seek to mitigate and manage these pressures as the situation evolves,” he added.
