Higher costs for the Warehouse prompted by its business revamp could squeeze its 2014 profits, says Morningstar analyst Nachi Moghe.
Moghe released a note on the retailer today describing its full year results announcement last Friday as "slightly disappointing."
Moghe said underlying net profits had been around 3 per cent below his forecasts. He also lowered his forecast for 2014 for the business.
"We are lowering our fiscal 2014 forecast to $80 million from $83 million as we see the company continuing to invest in its multi-channel business over the next two to three years, which will result in higher operating costs."
The Warehouse is expected to spend $430 million over the next five years increasing its footprint, modernising its stores and boosting its online presence.
