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

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news