WHS
07/01/2015 10:19
FORECAST
PRICE SENSITIVE
REL: 1019 HRS The Warehouse Group Limited
FORECAST: WHS: The Warehouse Group Trading Update
THE WAREHOUSE GROUP TRADING UPDATE
Weak Seasonal Sales and Margin in Red Sheds and Lower December Sales in Noel
Leeming
The Board of The Warehouse Group today advised that the Adjusted NPAT for the
Group for the first half (H1) ending on January 25th is likely to be in the
region of $37m, around 20% lower than last year.
The expectation for the first half was for profits to be in line with last
year as planned one-off rebranding investments in Noel Leeming and Torpedo7
were absorbed in the first half. However, in the Red Sheds the cold and wet
spring/summer weather has resulted in second quarter sales and margins below
expectations, particularly in December. Noel Leeming H1 sales have been below
last year. The electronics sector as a whole has been subdued as it cycles
against TV digital switchover in 2013 and the expected Christmas sales rush
did not materialise for Noel Leeming.
Mark Powell, Group CEO commented that "the combination of flat sales and
lower margins in the Red Sheds and lower sales in Noel Leeming have magnified
the impact on first half profits compared to last year." Mr Powell stated
the poor seasonal weather had impacted the whole apparel and seasonal
products market and the Red Sheds had been forced to sacrifice margin to
manage seasonal stock sell through." Mr Powell emphasised that "versus last
year some impacts were one off, such as the rebrand costs in Noel Leeming and
Torpedo 7 and as such are not representative of underlying performance,
therefore it is not expected that we will see a similar level of decline in
the second half."
Online continues to grow significantly faster than conventional store sales.
For example, Red Sheds online sales grew over 30% on last year, with over 20%
being click & collect sales ordered online and picked-up in store.
Group Chairman Ted van Arkel said "we will take stock of this half and update
the market more fully when The Warehouse Group half year results are
announced on Friday, 6 March 2015. At that time analysis on progress will be
given in the context of the Group strategy and Full Year results guidance
will be provided."
ENDS
Background: The Warehouse Group Limited
The Warehouse Group Limited comprises 92 Warehouse stores, 79 Noel Leeming
stores, 64 Warehouse Stationery stores and 10 Torpedo stores in New Zealand
and several online businesses. The company had turnover of $2.6 billion in
FY14 and employs over 11,500 people.
Contact details regarding this announcement: Media, Investors and Analysts
Mark Powell, Group CEO
To be contacted via Kim Russell on +64 9 488 3285 or +64 21 452 860
End CA:00259586 For:WHS Type:FORECAST Time:2015-01-07 10:19:05
