Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Warehouse boosts 3Q sales 8.6%, fattens ‘red sheds’ margins

Warehouse boosts 3rd quarter sales 8.6%, says ‘red sheds’ margins improve

By Tina Morrison

May 8 (BusinessDesk) – Warehouse Group, New Zealand’s largest publicly listed retailer, posted an 8.6 percent gain in third quarter sales and said profitability improved at its largest ‘red shed’ unit.

Sales rose to $604.8 million in the three months ended April 27 from $557.1 million in the year earlier period, the Auckland-based company said in a statement. Sales at its main ‘red shed’ unit increased 3.2 percent to $367 million, it said.

Warehouse chief executive Mark Powell, who notches up three years in the job this month, is two-thirds of the way through a store rejuvenation programme at the ‘red sheds’, its distinctive large store general goods format. In the latest period, the ‘red sheds’ posted a 3 percent increase in same-store sales, its 13th consecutive quarter of growth, while gross margins at the unit were “slightly higher” than the year earlier period.

“The ‘red sheds’ continues to make progress” with increased numbers of customers shopping in the stores and online, Powell said in the statement. “This all supports our strategy of ongoing investment in our stores, our people and our products, to deliver improvements for our customers. The sales and transactions increases tell us that they are noticing the difference.”

While a late start to winter had impacted apparel sales, the segment was ahead of the year earlier period and winter ranges are expected to trade well as cooler weather kicks in, Powell said.

To expand group earnings, Powell aims to grow the ‘non-red’ side of his business to be as large as the red sheds, though he says this is a long-term aspirational target, given red sheds have about $1.6 billion in annual sales compared to non-red at about $650 million.

Powell, who succeeded in improving the performance of the company’s ‘blue shed’ stationery chain before taking the top job, is expanding the group through acquisition, buying 11 businesses in the past 18 months, adding technology and appliance retailer Noel Leeming, outdoor sports chain R&R Sports and online sporting goods retailer Torpedo7.

In the latest period, sales at its ‘blue sheds’ rose 8.1 percent to $68.2 million, while Noel Leeming increased 10.4 percent to $146.9 million.

Sales at the Torpedo7 group rose to $22.7 million from $5.3 million the year earlier, although this reflected just one month of sales following its acquisition in April 2013. On a comparable basis, and including the subsequent acquisitions of Number 1 Fitness, Shotgun and R&R Sport, sales rose 12.6 percent, the company said.

“The significant reshaping of the group has positioned us well for a period of consolidation, where the emphasis will be more on leveraging returns from the base we have built,” chairman Ted van Arkel said in the statement.

Shares in Warehouse are rated an average ‘hold’ according to analysts polled by Reuters. The stock last traded at 3.80, and is the second-worst performer on New Zealand’s benchmark NZX 50 Index so far this year, having shed 9.6 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news