Sharechat Logo

Warehouse lifts 1Q sales by 3.5%, fattens margins at 'Red Sheds'

Friday 7th November 2014

Text too small?

Warehouse Group, the country's biggest listed retailer, lifted first quarter sales 3.5 percent, opening more Noel Leeming and stationery stores, and widened margins at its dominant 'Red Shed' unit.

Group sales rose to $589.4 million in the three months ended Oct. 26, from $569.8 million in the same period a year earlier, the Auckland based company said in a statement.

Sales at its dominant 'Red Shed' unit rose 1.3 percent to $359.2 million with new season launches in its home and leisure section and a strong performance in events, branded imports and some lines of its celebration category, which offset lower apparel sales. The retailer widened its gross margins at the Warehouse division, with fewer winter apparel clearance sales after a strong exit to the inter season.

"While we have improved margins in Red Sheds, with a much cleaner exit of winter seasonal apparel than last year, we will also be absorbing budgeted one off rebranding costs for both Torpedo7 and Noel Leeming in the quarter," chief executive Mark Powell said. "We are confident this strategic focus will deliver long term results for our shareholders in a retail environment that is continuing to evolve to satisfy customers changing buying habits."

Investors expect Warehouse to deliver a return this year after the retailer spent hundreds of millions of dollars overhauling stores and buying new businesses over the past couple of years in a bid to reposition itself in a changing retail environment.

That included the acquisition of the Noel Leeming consumer electronics chain, which delivered a 2.9 percent increase in first quarter sales to $143.2 million, and online retail group Torpedo7, which lifted first quarter sales 49 percent to $28.7 million.

Its 'Blue Shed' stationery unit increased first quarter sales 2.5 percent to $58.3 million.

Powell said the company sold a store in Whangarei last month, realising a pretax gain of about $5 million.

The shares rose 0.3 percent to $3.20 yesterday, and have dropped 14 percent this year.

 

 

 

 

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar falls against Aussie; RBNZ seen as more dovish than RBA
Air NZ CFO named acting chief executive
Waitomo favours more open wholesale fuel contracts
Stable ETS important for Marsden Point
Fletcher directors enjoy pay rise as earnings fall
Steep rate cut aimed at staving off unconventional monetary policy: Hawkesby
Mark Waller to step down as Ebos chair
Nimbys, carparks and the status quo under threat as govt tells big cities: grow up and out
FIRST CUT: Fletcher's annual operating earnings meet guidance
A2 Milk shares fall 15% despite solid result

IRG See IRG research reports