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Warehouse Red Sheds, stationery boost 3Q sales, FY guidance unchanged

Friday 10th May 2013

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Warehouse Group, the country's biggest listed retailer, boosted third-quarter sales at its Red Sheds and stationery outlets, and has kept its annual guidance unchanged.

Sales, excluding recent acquisitions Noel Leeming and Torpedo7, rose 6.2 percent to $418.7 million in the three months ended April 28 from the same period a year earlier, the Auckland-based retailer said in a statement. Including the appliance retailer and online group, sales from continuing operations were $557.1 million. Warehouse kept its annual adjusted profit guidance at between $73 million and $76 million.

The company's Red Sheds lifted sales 5.1 percent to $355.6 million, while Blue Shed stationery revenue gained 13 percent to $63.1 million. Noel Leeming contributed $133.1 million in continuing sales and Torpedo7's preliminary sales were $5.3 million. The discontinued Bond and Bond stores reported sales of $12.4 million.

"The long-term strategy outlined 18 months ago is starting to deliver improved results for shareholders," chairman Graham Evans said. "It is pleasing to see that our product brand optimisation strategy has already resulted in the ranging of major brands such as Sony, Acer, Hoover and Kambrook in the Warehouse stores, with further brands to be introduced during the year."

This week Warehouse chief executive Mark Powell outlined plans to lift staff wages by up to an annual $2.5 million to create a better-trained workforce and reward long-serving employees.

The retailer's year to date sales at the Red Sheds was up 4.1 percent at $1.22 billion, while the stationery unit was up 12 percent to $175 million. Noel Leeming sales year to date were $248.3 million, with $5.3 million from Torpedo7. Year to date sales from the discontinued Bond and Bond stores was $26.5 million.

Shares in the retailer were unchanged at $4.36 yesterday, and have jumped 46 percent this year. The stock is rated an average 'hold' based on six analyst recommendations compiled by Reuters, with a median target price of $3.675.

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