The Warehouse Group today announced an adjusted net profit after tax result of $37.7 million for the first six months of the 2018 financial year (to January) - down 16 per cent on the $45m posted in 2017.
This profit was above the recent guidance range of $32-$35m, and delivered 9.2 cents per share dividend versus 3.9 cents per share in 2017.
The overall group, which includes the The Warehouse, Warehouse Stationery, Torpedo 7 and Noel Leeming, saw operating revenue drop 0.9 per cent to $1.598 billion from last year.
This result follows a number of significant strategic moves by The Warehouse, including a reduction in sales in favour of an "every day low prices" policy.
The Red Sheds - the colloquial name for the Warehouse - reported sales of $940m, which was down from $975.1m in half-year 2017 due to the transition in pricing and product strategy resulting in a reduction in average selling price.
Profit for the Red Sheds was down 17.6 per cent compared to the same period last year, while same-store sales decreased 3.6 per cent in the half.
"Notwithstanding the absolute decline year on year in profit generated from the Red Sheds division, overall the first half performance has been encouraging given the degree of change that has been absorbed by the business," the Warehouse Group said in its results announcement.
Noel Leeming had stronger half-year results. The electronics chain reported sales of $453.9M, a 7.5 per cent increase on the same period last year and same-store sales increased by 5.1 per cent. Operating profit for the half was $15.3m, an increase of $6.1m on the previous year.
Torpedo 7 reported sales of $88.6m in the latest results, up 2.5 per cent on last year. However, operating profit of $0.8m decreased by 68 per cent over the same period last year.
The Warehouse Group said this result was impacted by a number of issues, including the clearance of aged stock, changes in the product mix and efforts to increase brand awareness for the offline retail.
"During the period a number of legacy issues were tackled including addressing inventory and sales issues within the Number One fitness and Shotgun supplements divisions," The Warehouse Group said.
The Warehouse Stationery also saw a drop in sales, reporting $129m, down 7.1 per cent from the same period last year. The Blue Sheds reported an operating profit of $3.7m, down 43 per cent from last year.
"The operational integration of Warehouse Stationery [Blue sheds] into the Red Sheds caused a number of internal systems and process challenges, which when coupled with a softer trading performance in key categories, saw a sharp decline in performance for Blue," The Warehouse Group said.
These results also come off the back of the Warehouse Group's sale of the company's financial services business earlier this year.
The Warehouse Group employs over 12,000 staff across the nation, through 93 Warehouse stores, 74 Noel Leeming stores. five Lifestyle Appliance stores, 70 Warehouse Stationery stores, 11 Torpedo7 stores and its online businesses.