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

 


Warehouse cuts FY earnings forecast on warm weather

Warehouse cuts annual earnings forecast as warm weather crimps seasonal sales

By Tina Morrison

June 20 (BusinessDesk) - Warehouse Group, New Zealand's largest listed retailer, cut its forecast for annual earnings as warmer autumn and winter weather crimped sales and margins of seasonal clothing and home products.

Warehouse expects adjusted full-year profit of $59 million to $62 million, down from its March forecast for $67 million to $71 million, and $73.7 million last year, the Auckland-based company said in a statement.

The retailer is in the process of rejuvenating its 91 distinctive large format 'red shed' stores. To expand group earnings, the company aims to grow the 'non-red' side of its business to be as large as the red sheds, having bought 11 businesses in 18 months, adding technology and appliance retailer Noel Leeming, outdoor sports chain R&R Sports and online sporting goods retailer Torpedo7.

"While sales in the Red Sheds are still above last year, sales of seasonal apparel and home products are below plan and are increasingly having to be sold at decreased margins to maintain seasonal sell-through and avoid end-of-season overstocks," the company said. "Over the last three weeks there has been a material deterioration in sales and margin versus plan in the Red Sheds and it is likely the remaining winter season will see discounted trading in the market, with limited opportunity for full margin sales.

"These market conditions add further unpredictability to the remaining June and July trading environment."

Torpedo7, which is being integrated with R&R Sport, No.1 Fitness and Shotgun.co.nz, also failed to meet profit expectations as sales lag forecasts, Warehouse said. The company's Noel Leeming, Warehouse Stationery and Financial Services units were all performing in line with profit expectations, it said.

“The revised guidance is representative of a particularly difficult seasonal trading environment," chairman Ted van Arkel said in the statement. "However, the reshaped TW Group has developed a stronger base and significant opportunities for growth. In the next year the focus will be on consolidating the changes made and leveraging profitable growth.”

Shares in Warehouse last traded at $3.32, and have slipped 11 percent so far this year, making it the third-worst performer on the benchmark NZX 50 Index. The stock is rated an average 'hold', according to analysts polled by Reuters.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news