Sprucing up stores and increasing staff are driving growth for The Warehouse. Photo / Supplied
The Warehouse has downgraded profit guidance mainly because margins are being squeezed by discounting excess seasonal stock, its chief executive says.
New Zealand's biggest listed retailer yesterday reduced its forecast on adjusted full-year net profit to between $62 million and $66 million, down from $70 million. That would be a
drop of up to 18 per cent on the $76 million adjusted net profit reported in its last full-year.
Reported net profit was expected to be around $80 million for the current full-year, in line with previous guidance. The downgrade came a day after Briscoe Group, which operates Briscoes and Rebel Sport stores, said its annual profit was expected to be 25 per cent higher than the previous year.
Warehouse chief executive Mark Powell said the margin pressure had resulted from seasonal clearance costs, mostly on apparel items, rather than promotional discounting.
"We set pretty impressive sales growth targets in apparel ... they haven't come to fruition and when you have [excess] seasonal apparel you have to clear it."
