KEY POINTS:
First quarter sales by The Warehouse Group rose 1.6 per cent to $382.4 million.
The result, for the period ending October 29 compared to the corresponding period last year, reflected the patchy but overall flat consumer demand previously signaled, group chief executive Ian Morrice said today.
The Warehouse
New Zealand sales at $331m showed a 1.5 per cent increase on the comparative period, while same store sales were down 1.0 per cent in the quarter.
"We achieved good sales growth in our home, brown goods and grocery categories in line with recent sales trends reported by other retailers, however the apparel season has started more slowly for us," Mr Morrice said.
Last year's first quarter had featured significant clearance activity in apparel, which had not been repeated this year. As a result, gross margins for the quarter were ahead of those recorded last year.
A replacement store in Ashburton was opened in October and in November three stores would be refitted, with Nelson and Newmarket continuing to offer a full range of general merchandise and apparel, while the Whangarei store would be converted into the second Warehouse Extra.
By the end of November, nine of The Warehouse's 85 stores would have been converted to the new formats, and that programme would accelerate in 2007.
Warehouse Stationery sales at $51.4m were up 2.4 per cent on the comparative period, while same store sales were ahead 3.6 per cent in the quarter.
During the quarter increased promotional activity in response to a softening market had put some pressure on overall margins, Mr Morrice said.
In October, Warehouse Stationery opened a replacement store in New Plymouth, copying the new format developed at Auckland's Wairau Park in July.
"Whilst we experienced mixed conditions over the first quarter, I remain confident that we are well positioned for the critical second quarter with our strongest offer yet," Mr Morrice said.
Shares in The Warehouse were down 4c to $6.95 in early trade today, having reached a year high of $7.06 last Friday on speculation Woolworths was about to launch a takeover bid.
Woolworths, Australia's biggest retailer, had earlier followed New Zealand supermarket rival Foodstuffs in taking a 10 per cent stake in The Warehouse.
Last week Warehouse founder Stephen Tindall withdrew his bid to take the company private.
In a consortium with Pacific Equity Partners, he had been planning to offer shareholders $5.75 cash per share in a bid to take The Warehouse private.
Mr Tindall's family interests and the Tindall Foundation hold around 51 per cent of The Warehouse shares.
- NZPA