By Aimee Chanthadavong
‘Bargain’ retailer The Warehouse Group has seen its net profit after tax slip 7.1 per cent from $57 million to $53 million in the prior comparable period.
Its group sales for the half-year were $908 million, down 1.2 per cent compared to the first half last year.
Speaking to RetailBiz, The Warehouse CEO Ian Morrice blamed the strong New Zealand dollar as the cause for the increased discounting and price deflation across the market.
The Warehouse reported sales of $808.1 million down 1.6 per cent compared to the first half last year. Same store sales were down 2.6 per cent for the half and down 3.3 per cent for the second quarter. Operating profit for the half year was down 5.9 per cent to $74 million.
Category specific, the company experienced a decline in CDs, DVDs and consumer electronics.
“CDs and DVDs has been one area in the market where there has been a fall in sales, which has been signalled by the last year and half because more people are downloading that that’s particularly impacting on us,” Morrice said.
However, The Warehouse saw sporting business up 4.6 per cent, its home appliance business up 4 per cent, housewares business up 2.5 per cent and furniture up over 9 per cent.
“We’re going to continue to focus our offers in these areas, especially on the core essential everyday items,” Morrice said.
“We’re continuing on our space program, which will see us gradually add new stores and improve our telling space that we’ll continue to roll out in the next six to 18 months. We’ll also continue to invest in extending our product offering.”
Subject to any material change in anticipated trading conditions, the company expect adjusted net profit after tax for the full year to be between $76 million and $80 million.