WHS
07/11/2014 09:06
QUARTER
REL: 0906 HRS The Warehouse Group Limited
QUARTER: WHS: First Quarter Sales Update
THE WAREHOUSE GROUP FIRST QUARTER: CONTINUED SALES GROWTH
Group Sales for Q1 of $589.4 million
The Warehouse (Red Sheds) Same Store Sales of 1.2%
Warehouse Stationery (Blue Sheds) Same Store Sales of 1.3%
Noel Leeming Same Store Sales of 0.5%
Auckland, 7th November 2014
The Board of The Warehouse Group (TWG) today reported Group sales for the
first quarter ending October 26th of $589.4m with solid sales performances
from each of our retail brands.
The Warehouse
The Warehouse (Red Sheds) reported sales for the first quarter of $359.2
million, an increase of 1.3% or $4.7 million compared to the same quarter
last year. Same store sales increased 1.2% in the quarter with the 'Red
Sheds' now recording 15 consecutive quarters of positive same store sales.
The major drivers of sales growth in Q1 were the successful launches of new
season ranges in the Home and Leisure categories, along with strong
performance from events, branded imports and key lines in the Celebrations
category. This has been offset by lower sales in the Apparel category as a
result of less winter clearance activity than in the same quarter last year,
and lower Television sales as a result of cycling against the digital
switchover activity last year.
Gross Margins improved on last year, largely due to the lower winter apparel
clearance activity which reflects a strong exit from the Winter season.
In the quarter, the Red Sheds continued to develop as a digitally enabled
multichannel retailer with the introduction of 'Endless Aisles' technology,
enabling customers in smaller stores to access the full online range, to be
delivered to their home or to store on a 'click and collect' basis. This has
been well received by customers to date increasing the alignment and
integration of the online and in-store experience.
Commenting on The Warehouse (Red Sheds) result Group Chief Executive Officer
Mark Powell said "To achieve 15 consecutive quarters of same store sales
growth is particularly pleasing as we cycled against 5.5% same store sales
growth in the same quarter last year. This year's growth was achieved with
much lower levels of clearance activity, resulting in improved gross
margins."
Mr Powell added that "it is pleasing to see the impact from a range of
strategic initiatives such as new international technology and appliance
brands, improved product quality, a critical mass of store refits and
improved team training. This has brought former customers back to The
Warehouse and has resulted in continued sales growth driven by increased
transactions. While the challenge remains to translate this into increased
operating profit, it provides the necessary platform from which to do that."
Warehouse Stationery
Warehouse Stationery (Blue Sheds) reported sales for the first quarter of
$58.3 million, an increase of 2.5% or $1.4 million compared to the same
quarter last year. Same store sales increased 1.3% in the quarter with the
'Blue Sheds' now recording 21 consecutive quarters of positive same store
sales.
Commenting on the Warehouse Stationery result Group Chief Executive Officer
Mark Powell said "This quarter represents the first quarter cycling against
the rebranding last year, we continue to be pleased with the performance of
the business."
Noel Leeming
Noel Leeming reported sales for the first quarter of $143.2 million, an
increase of 2.9% compared to the same quarter last year. Quarterly same
store sales increased 0.5%.
During the quarter Noel Leeming was successfully rebranded, bringing the
brand up to date and revitalising the business.
Commenting on the Noel Leeming result Group Chief Executive Officer Mark
Powell said "We have been very pleased with our customer's feedback on our
rebranding, with Noel Leeming delivering increased market share. While the
same store sales increase was subdued compared to previous quarters, this was
largely due to lower television sales as we cycled against the digital switch
over last year which impacted the whole technology sector. Noel Leeming
continues to expand on the range of services offered to customers, ensuring
it will remain New Zealand's leading Technology and Appliance retailer."
Torpedo7 Group
Torpedo7 Group reported sales for the first quarter of $28.7 million up 49.4%
compared to the same quarter last year. The comparative period excludes the
sales of Shotgun Supplements and R&R Sport which were not acquired until
December 2013. It also excludes one month's sales related to No1 Fitness
acquired in September 2013. At the end of the quarter Torpedo7 and R&R Sport
were combined under a new Torpedo7 brand and two new stores were opened in Mt
Wellington and Albany.
Commenting on the Torpedo7 Group result Group Chief Executive Officer Mark
Powell said "We are very pleased with the look and feel of the new Torpedo7
brand and customer feedback to date has been positive. This investment in
Torpedo7 will position it as a true multichannel 'bricks and clicks'
retailer, ensuring we remain at the forefront of New Zealander's minds when
they are looking to purchase sporting, outdoors and adventure equipment."
TWG
In October the Group sold the Warehouse store located in Whangarei realising
a property pre-tax gain of approximately $5.0 million.
In announcing the result, Group CEO Mark Powell said "In line with our
strategic plan the quarter has seen continued investment in our existing
businesses. This has again resulted in positive sales results across all our
retail businesses in the quarter. However, 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. 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."
The Annual Meeting of shareholders will take place two weeks from now, on
Friday November 21st.
ENDS
Background: The Warehouse Group Limited
The Warehouse Group Limited comprises 92 Warehouse stores, 79 Noel Leeming
stores, 64 Warehouse Stationery stores 11 Torpedo7 stores and 2 Number 1
Fitness 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:
Investors, Analysts and Media
Mark Powell, Group CEO, to be contacted via Gayle Theuniissen on +64 9 489
8900 extn 96333 or +64 21 742 784
End CA:00257370 For:WHS Type:QUARTER Time:2014-11-07 09:06:26
