NZ's Warehouse reaffirms profit guidance after H1 result

WELLINGTON - New Zealand's biggest listed retailer, The Warehouse Group Ltd, posted a 3.3 percent rise in first-half profit on Friday as sales improved and reaffirmed its full year earnings guidance.

The Warehouse, which is implementing a three-year turnaround strategy, made a net profit after tax of NZ$54.0 million ($45 million) in the six months to Jan. 29, compared with NZ$52.3 million in the same period last year.

Group revenue rose 3.3 percent to NZ$937.9 million, with margins holding in all major categories other than apparel.

The company said challenging conditions in the retail market would continue in the second half.

Still, it reaffirmed its adjusted net profit after tax for the full year would be between NZ$62.0 million and NZ$66.0 million.

"The first quarter was challenging for Warehouse Stationery however the second quarter was strong and this trend continued through the remainder of the Back to School period," said Warehouse Chief Executive Officer Mark Powell in a statement.

The company declared a dividend of 13.5 cents against last year's 15.5 cents a share.

Its shares closed on Thursday at NZ$2.65, having fallen around 14 percent so far this year compared with a 4 percent gain for the benchmark NZX-50 index.

The Warehouse has 88 discount stores, known as "Red Sheds", which sell everything from consumer electronics, appliances, clothing, garden supplies, and grocery items. It also has 50 shops selling stationery and computers.

It competes against Briscoe Group Ltd, KMart , the privately-owned Farmers department stores, and a host of smaller specialist retailers, such as clothing firm Hallenstein Glasson Ltd.. ($1=NZ$1.20)