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Warehouse 1Q sales rise 1.9% as stationery leads growth

Monday 5th November 2012

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Warehouse Group, the country's biggest listed retailer, boosted first-quarter sales 1.9 percent with its Blue Shed stationery stores leading growth as its Red Sheds reported a flat result.

Group sales rose to $377.3 million in the three months ended Oct. 28, from $370.4 million in the same period a year earlier, the Auckland-based company said in a statement. Sales at its Red Shed stores edged up 0.8 percent to $325.7 million and were flat on a same-store basis, while the stationery outlets' revenue climbed 9.1 percent to $51.6 million. The Blue Sheds' sales rose 3.7 percent on a same-store basis.

"While same store sales in September and October were lower than the prior corresponding months, largely due to the cycling against the Rugby World Cup, the Warehouse sales performance in August was very strong and we are set up very well to enter the important second quarter," chief executive Mark Powell said.

"I am confident that our decision to remove some of our home appliance and whiteware products from sale, while having a short-term impact, is clear evidence of the Warehouse putting the customer first which will benefit overall brand perception in the long-term," he said.

In September, the retailer reported a 14 percent drop in full-year earnings to $65.2 million, in line with guidance, and flagged mixed trading conditions for the 2013 year.

Warehouse reported a 138 percent lift in sales through online channels, and last month launched its own web-based promotions.

Chairman Graham Evans said the quarter was a mixed one, but the board still backs the company's strategy will deliver value to shareholders.

The shares rose 0.3 percent to $3.12 in trading on Friday, and have gained 4 percent this year.

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