Nick Grayston, chief executive of The Warehouse Group. Photo / Jason Oxenham
Nick Grayston, chief executive of The Warehouse Group. Photo / Jason Oxenham
Around 6000 The Warehouse Group team members will receive a bonus or incentive payout despite a challenging year for the retail company.
The bonus will be issued to waged staff, senior leaders and offshore team members including some in India and China - in recognition of "work put in to achieve the result and the progress made this year".
A spokeswoman for the group said the amount would vary by individual depending on the contract or scheme each are on.
New Zealand's largest retailer made $59 million in adjusted net profit in the year to July 29, down 13.4 per cent from $68.2m the year before.
The decrease in earnings included a $25.6m write-down in the value of Torpedo7.
It posted a net profit of $22.9m, an increase of 12 per cent.
Sales revenue at The Warehouse dropped 2.5 per cent to $1.7 billion which the company attributes to the change in its pricing model to everyday low pricing, and its operating margin reduced 0.6 per cent.
The Warehouse Group chairwoman Joan Withers said the company delivered an encouraging result despite a challenging year.
"We began a transformation programme to accelerate our strategy, made a major change to our operations with the move to EDLP in the core The Warehouse business, and continued to integrate our businesses across the Group.
"Given the significance of these changes, our result ahead of guidance is pleasing."
Noel Leeming had a solid year with revenue growth up 8.6 per cent to $880m. Operating profit increased by 61.8 per cent from the previous year, to $31.2m.
Warehouse Stationery had a weak year, sales dropped 5.2 per cent. It experienced a drop in operating profit from $15.7m to $10.6m.
Torpedo7 revenue increased 3.6 per cent to $163.4m but made a loss of $1.4m.
Total online group sales increased by 6.6 per cent to $221.1m.
The Warehouse founder Sir Stephen Tindall will take a further 12 months leave of absence as a director on the company's board. His son Robbie Tindall will continue on as his replacement, the company said.
Warehouse Group chief executive Nick Grayston said the performance of appliance retailer Noel Leeming was a highlight of the 2018 financial year.
"Noel Leeming had a standout year and continued to benefit from execution of consistent strategies and the expertise offered through the assisted sales and service model," Grayston said.
Appliance retailer Noel Leeming increased annual profit by 61 per cent. Photo / Bay of Plenty Times
He said the 12 months to July had been a year of "seismic change" for the group.
Mohandeep Singh, senior research analyst at Craigs Investment Partners, said the drop in adjusted earnings was inline with the guidance it provided last month.
"Red Shed's earnings were down 16 per cent, even though it was cycling a weak period prior. Management remain bullish that customers are responding well to price changes, but there is no visibility on this yet," Singh said.
"It delivered a fairly muted outlook with higher capex and increased 'non-recurring' transformation costs in FY19, as well as [signalled] currency, labour and fuel cost headwinds."
Its earnings outlook for the current financial year would be dependent on the Christmas trading period, Singh said.
As of July, the group has 93 The Warehouse stores, 74 Noel Leeming, 70 Warehouse Stationery and 14 Torpedo7 stores.
The retail company had $3 billion turnover in the previous financial year.
