WHS
08/11/2013 08:30
QUARTER
REL: 0830 HRS The Warehouse Group Limited
QUARTER: WHS: First Quarter Sales Update
TW GROUP: SOLID Q1 SALES GROWTH, BUT MARGIN PRESSURE IN THE 'RED SHEDS'
Group Sales for Q1 of $569.8 million
The Warehouse (Red Sheds) Same Store Sales of 5.5%
Warehouse Stationery (Blue Sheds) Same Store Sales of 6.1%
Noel Leeming Same Store Sales of 6.1%
Auckland, 8th November 2013
The Board of The Warehouse Group (TW Group) today reported Group sales for
the first quarter ending October 27th of $569.8M with solid sales
performances from each of our retail brands.
The Warehouse
The Warehouse (Red Sheds) reported sales for the first quarter of $354.5
million, an increase of 8.8% or $28.8 million compared to the same quarter
last year. Same store sales increased 5.5% in the quarter with the 'Red
Sheds' now recording 11 consecutive quarters of positive same store sales.
The major drivers of sales growth in Q1 have been the continuing improvement
in performance from Auckland stores (with 12 Auckland stores now refitted)
and double digit sales growth in our Apparel, Housewares, Health & Beauty,
Gaming, Jewellery, Consumer Electronics, Appliances & Whiteware categories.
The growth in Consumer Electronics, Appliances & Whiteware is due to the
introduction of a number of international technology and appliance brands and
the expansion of our range of Kensington and Aspira products.
This sales growth has not yet translated into Gross Profit growth with margin
pressure due to category mix and a number of different factors in General
Merchandise categories. These include continuing structural declines such as
CD, DVD & Books and categories that have had major product range transitions
in the quarter such as the final exit of our previous white goods range as we
introduce the full range of Aspira product, and the transition to our own
range of Direct Response TV (DRTV) products.
During October we announced two important multichannel initiatives for the
'Red Sheds', Click & Collect and Free in store Wi-Fi, which will continue to
improve our customers shopping experience.
Commenting on The Warehouse (Red Sheds) result Group Chief Executive Officer
Mark Powell said "It is pleasing to see the impact from a range of strategic
initiatives such as new international technology & appliance brands, improved
product quality, a critical mass of store refits and improved team training.
This has started to bring former customers back to The Warehouse and has
resulted in strong sales driven by good transaction growth. We will continue
to invest in growth initiatives which may have a short term earnings impact;
this is in line with our strategy which focuses on the long term future of
The Warehouse."
Warehouse Stationery
Warehouse Stationery (Blue Sheds) reported sales for the first quarter of
$56.9 million, an increase of 10.3% or $5.3 million compared to the same
quarter last year. Same store sales increased 6.1% in the quarter with the
'Blue Sheds' now recording 17 consecutive quarters of positive same store
sales.
Warehouse Stationery has continued its focus on its customers and employees
recently winning Retail Employer of the Year and the Kenexa Best Workplaces
Award (for Enterprises with more than 750 employees).
Commenting on the Warehouse Stationery result Group Chief Executive Officer
Mark Powell said "We have been very pleased with our customer's feedback on
our rebranding and new initiatives such as our expanded range of Print & Copy
Centre products and services which make us NZ's only nationwide Print & Copy
Centre."
Noel Leeming
Noel Leeming reported sales for the first quarter of $139.2 million, an
increase of 11.6% compared to the same quarter last year1. Quarterly same
store sales1 increased 6.1%.
The major drivers of sales growth in Q1 have been, the continuing improvement
in performance from focusing on one retail brand, a double digit increase in
Television sales as a result of the digital switchover, and the success of
customer focused promotional activities.
Commenting on the Noel Leeming result Group Chief Executive Officer Mark
Powell said "Across a range of areas Noel Leeming is contributing the
strategic benefits that we expected as a result of the acquisition. We will
continue to invest in Noel Leeming, including an expansion of the range of
services we offer our customers, to ensure we remain NZ's leading Home
Appliance, Entertainment & Technology retailer."
Torpedo7 Group & Multichannel
Torpedo7 Group reported sales for the first quarter of $19.2 million. In
line with our strategic plan for the business we continued to expand through
the quarter with the launch of the Knucklebone.co.nz (outdoor sporting
products) and PedalPro.co.nz (specialist bike products) sites. We also
completed the acquisition of No1 Fitness in September and entered into an
unconditional agreement to acquire Shotgun Supplements in December.
In the first quarter The Warehouse Group launched the ilovebeauty.co.nz
(branded beauty products) site, along with ilovebeauty branded kiosks in
several shopping malls and expanded our Australian online offering with
Petau.com.au (pet food & products).
Early in October we launched TV International Brands, our own DRTV business,
with product advertised on TV and available online, via a call centre and in
store at The Warehouse.
"We continue to focus a considerable amount of effort on becoming the leading
Multichannel retailer in NZ and this quarter has seen the launch of many
initiatives. We continue to be excited by the growth opportunities we see
and will continue to accelerate activities in this area of our business" said
Mr Powell.
TW Group
As a reshaped Group we continue to focus on actions that leverage our size
and scale. In October we relocated our Central Hamilton Noel Leeming and
Warehouse Stationery stores to the existing Warehouse site allowing us to
create an exciting retail destination and right size our Warehouse store. We
sold the Group owned Riccarton Warehouse store in October for a pre-tax gain
of approximately $8.9 million enabling us to recycle this capital into new
property initiatives.
In announcing the result, TW Group Chairman Graham Evans said "In line with
our strategic plan the quarter has seen continued investment in our existing
businesses and accelerated investment in new activities with three small
bolt-on acquisitions, the launch of four new online businesses, new
Multichannel offerings in The Warehouse such as Click & Collect and in store
Wi-Fi and the start-up of our DRTV business TV International Brands. While
we have seen positive sales results in our retail businesses in the quarter,
we are incurring start-up costs as a result of all of these activities. The
Board is 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."
1 Sales for Noel Leeming relate to continuing stores. Same store sales and
prior year sales comparisons are based on pre-acquisition proforma sales
information
ENDS
Background: The Warehouse Group Limited
The Warehouse Group Limited comprises 92 Warehouse stores, 75 Noel Leeming
stores and 61 Warehouse Stationery stores in New Zealand and several online
businesses. The company had turnover of $2.2 billion in FY13 and employs
over 10,000 people.
Contact details regarding this announcement:
Investors and Analysts Media
Stephen Small
Chief Financial Officer
Cellphone: +6421 714159 Mark Powell, Group CEO, to be contacted via Gayle
Theuniissen on +649 489 8900 X96333 or +6421 742784
End CA:00243500 For:WHS Type:QUARTER Time:2013-11-08 08:30:05
