Retailer's sales rise, profits fall

The Warehouse Group, New Zealand's biggest listed retailer, has reported half-year profit in line with guidance and a lift in sales across its various retail brands.

Adjusted net profit fell 12.5 per cent in the half year to January 26 to $46.2 million, compared with the same period a year earlier, the company said.

The Warehouse said sales across all of its brands - which also include Warehouse Stationery, electronics retailer Noel Leeming and online sportsgear seller Torpedo7 - saw a pick-up, giving a 29.5 per cent lift in total group sales to $1.42 billion.

Trading profit - what the company earns from its retail sales rather than other income streams such as property sales - fell 3.1 per cent as a result of margin pressures the firm faced in its core Red Sheds business during the first quarter.

All the other brands increased their trading profit, the company said.

The Red Sheds reported a 6.2 per cent lift in half-year sales of $920.1 million, while same-store sales lifted 4.1 per cent.

"It has been at least a decade since the Red Sheds grew same-store sales more than 4 per cent in a half and had 12 quarters of consecutive growth," said chief executive Mark Powell. "It is still early days but we are pleased with the progress to date. We believe that the actions we are taking to improve our products, prices, promotions and store environment and the investing [in] our team members has started to bring customers back to The Warehouse, as New Zealand's house of bargains and home of essentials."

The Warehouse said adjusted full-year net profit for the group was expected to be in the range of $67 million to $71 million.

The company declared a half-year dividend of 13c a share and is targeting an annual dividend of 19c a share.