The Warehouse's first-half profit falls as margins squeezed

Click and collect sales grew 79.1 per cent in the latest six months. Photo / Jason Oxenham

The Warehouse's first-half net profit fell 8.2 per cent - even as Christmas and summer sales hit records - with supply chain disruption eating into its profit margins.

Net profit for the 26 weeks ended January 30 fell to $50.4 million compared with $55m in the same six months a year earlier.

Gross profit margin fell 150 basis points to 34.7 per cent, which the company attributed both to disruptions in its supply chain and rising ocean freight costs.

Sales fell 4.3 per cent to $1.73 billion for the six months, although sales in the second quarter rose 2.8 per cent to a record.

But online sales grew 67.8 per cent and accounted for 19.4 per cent of total sales, reflecting the impact of its Auckland stores being closed for 46 per cent of total trading days and the stores in the rest of the country being closed for 23 per cent of trading days.

Click and collect sales grew 79.1 per cent in the latest six months.

The discount retailer said its transformation programme remains on track despite the Covid-19 disruptions and key programmes are beginning to deliver.

The company will pay a first-half dividend of 10 cents per share after paying a 13c first-half dividend on top of a 5c special dividend last year.

Warehouse Group shares were up 6.42 per cent to $3.15 by mid-morning.

- BusinessDesk