Warehouse Group Swings To $11.2m Profit
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The Warehouse Group has returned to profit, posting a net profit after tax of $11.2 million for the 52 weeks ended 2 August 2026, compared with a $2.8 million loss the previous year.
Sales fell 1.9 percent to just over $3 billion, though the prior year included an extra trading week. On a like-for-like 52-week basis, same-store sales rose 0.4 percent. Customers bought more items but at lower average prices, as discretionary spending remained under pressure.
Operating profit rose to $22.6 million from $1.3 million, helped by a 40-basis-point lift in gross profit margin to 32.6 percent and a $29.8 million reduction in operating costs.
Chair John Journee said the company had made meaningful progress during the year but more work needed to be done.
"Importantly, this progress was driven by actions taken within the business rather than an improvement in market conditions, creating a stronger foundation for the next stage of our recovery," he said.
Noel Leeming was the largest contributor to the recovery, lifting operating profit to $21.8 million from $11.7 million despite a slight fall in overall sales. Warehouse Stationery nearly doubled its operating profit to $15.9 million, while sales rose just 0.7 percent to $227.6 million.
The Warehouse — the group's Red Shed brand — continued to struggle despite a better second half, posting an operating loss of $7.5 million, an improvement on the previous year's $12.2 million loss.
Chief executive Mark Stirton said better buying, tighter inventory management and more disciplined pricing were starting to gain traction.
"We've made a good start, but our ambitions are much bigger, especially for The Warehouse where we're determined to earn back our place as New Zealanders' first choice retailer."
Stirton also said profitability remained below the group's ambitions, particularly at The Warehouse.
The company will not pay a final dividend. Its stated immediate priority is to rebuild sustainable earnings and retain financial flexibility.
Sales in the first eight weeks of the new financial year were broadly in line with the same period a year earlier, with margins ahead. The group expects retail conditions to remain challenging as consumer confidence and economic growth stay subdued.