Warehouse checkouts busy as sales keep rising
Warehouse Group, New Zealand’s largest publicly- li sted retailer, increased first- quarter sales with increases across all its brands ahead of the key Christmas trading period.
The Auckland- based company said group sales rose 3.9 per cent to $ 655.9 million in the quarter ended October 30, from the year- earlier quarter when sales increased 7.7 per cent.
The company’s “red shed” Warehouse stores, which make up more than half of its total sales, increased revenue 1 per cent to $ 377.5m in the quarter as weaker sales in areas such as entertainment, stationery and craft, and gardening, were offset by sales growth in the home, leisure and apparel divisions. It added one new store during the quarter.
Gross margins for the stores were consistent with last year as the business absorbed the impacts of currency volatility in a bid to keep prices competitive to customers, it said.
“The competitive environment is tougher every year, and with more international players focusing on our domestic market, both physically and online, it is more important for us to execute our plans well, to ensure that we are relevant, competitive and profitable in the future,” said chief executive Nick Grayston.
“We are focused on improving the fundamentals of the business and still have a lot of work to do to achieve the levels of profitability that we see are possible.”
Grayston noted that the second quarter of the company’s financial year generates most of its sales and profit for first- half earnings.
Noel Leeming, its second- largest unit, boosted first- quarter sales 12 per cent to $ 183.6m, and the company said it continued to gain market share in an “extremely competitive” appliances and technology market. During the quarter, it opened new stores in Takapuna and Tauranga Crossing and relocated its Gisborne store.
Warehouse Stationery sales advanced 1.4 per cent to $ 63.7m, as it also opened a new store in Tauranga Crossing. Torpedo7 sales rose 12 per cent to $ 37.8m as television advertising campaigns brought in high levels of subscribers and new customers, and it benefited from strong early season bike sales.
The group said its online sales rose 22 per cent to $ 42.7m, and now make up 6.7 per cent of total sales as its “click and collect” service benefits Noel Leeming and The Warehouse.
On a same- store sales basis, The Warehouse lifted sales 1.7 per cent, Warehouse Stationery sales gained 2.3 per cent and Noel Leeming sales advanced 11 per cent. AFT Pharmaceuticals, the maker of ibuprofen- paracetamol painkiller Maxigesic, said its operating loss widened in the first half as it continues with its global rollout and trials new versions of its products. The operating loss was about $ 8.4 million in the six months ended September 30, from a loss of $ 3.5m a year earlier, the Auckland- based company said. Revenue rose 1 per cent to $ 29.8m. The company said it was on track to break even in 2018 or 2019. Infratil reported a 7.1 per cent fall in earnings as the listed infrastructure investor’s Perth Energy division faced difficult retail conditions in Western Australia, and the company now sees its annual result tracking at the bottom end of its forecast. Underlying earnings before interest, tax, depreciation, amortisation and fair value of financial instruments ( ebitdaf) fell to $ 246 million in the six months ended September 30 from $ 253.1m a year earlier, the Wellingtonbased company said. Kiwifruit grower Seeka has settled a second insurance claim from a 2015 fire, and updated its earnings guidance to reflect the “extraordinary gain”. The company will get about $ 3.6 million plus GST in the insurance settlement for “losses associated with the mitigation efforts” after a fire which destroyed a shed in Tauranga in March 2015.