Warehouse Group, New Zealand's largest publicly-listed retailer, increased first-quarter sales with increases across all its brands ahead of the key Christmas trading period.

The Auckland-based company said group sales rose 3.9 per cent to $655.9 million in the quarter ended October 30, from the year-earlier quarter when sales increased 7.7 per cent.

The company's "red shed" Warehouse stores, which make up more than half of its total sales, increased revenue 1 per cent to $377.5m in the quarter as weaker sales in areas such as entertainment, stationery and craft, and gardening, were offset by sales growth in the home, leisure and apparel divisions. It added one new store during the quarter.

Gross margins for the stores were consistent with last year as the business absorbed the impacts of currency volatility in a bid to keep prices competitive to customers, it said.


"The competitive environment is tougher every year, and with more international players focusing on our domestic market, both physically and online, it is more important for us to execute our plans well, to ensure that we are relevant, competitive and profitable in the future," said chief executive Nick Grayston.

"We are focused on improving the fundamentals of the business and still have a lot of work to do to achieve the levels of profitability that we see are possible."

Grayston noted that the second quarter of the company's financial year generates most of its sales and profit for first-half earnings.

Noel Leeming, its second-largest unit, boosted first-quarter sales 12 per cent to $183.6m, and the company said it continued to gain market share in an "extremely competitive" appliances and technology market. During the quarter, it opened new stores in Takapuna and Tauranga Crossing and relocated its Gisborne store.

Warehouse Stationery sales advanced 1.4 per cent to $63.7m, as it also opened a new store in Tauranga Crossing. Torpedo7 sales rose 12 per cent to $37.8m as television advertising campaigns brought in high levels of subscribers and new customers, and it benefited from strong early season bike sales.

The group said its online sales rose 22 per cent to $42.7m, and now make up 6.7 per cent of total sales as its "click and collect" service benefits Noel Leeming and The Warehouse.

On a same-store sales basis, The Warehouse lifted sales 1.7 per cent, Warehouse Stationery sales gained 2.3 per cent and Noel Leeming sales advanced 11 per cent.