Photo: RNZ / Nate McKinnon
Major retailer The Warehouse Group has reported a large loss, which the company says reflects one of its toughest years on record.
Key numbers for the 12 months ended July compared with a year ago:
- Net loss $54.2m vs $29.8m profit
- Sales revenue $3.0b vs $3.24b
- Adjusted profit $18.9m vs $57.4m
- No final dividend vs 8 cents per share
The group, which owns The Warehouse, Noel Leeming and Warehouse Stationery chains, said its bottom line was significantly affected by its disposal of outdoor goods brand Torpedo7 for just $1 in March.
The company reported a loss of $60 million from the sale of Torpedo7.
Leaving aside one-offs, its adjusted profit was also well down from the previous year.
The Red Sheds, in the red
Chair Dame Joan Withers said the year was one of the most challenging in its 42-year history.
"The poor financial performance we've reported this year is not acceptable," Dame Joan said.
"The board and executive leadership team are acutely aware of the disappointment shareholders will be experiencing and the big job ahead of us to get the company back on track," she said.
Group sales fell just over 6 percent due to falling consumer demand, however margins held steady at 33.6 percent.
"The economic climate in Aotearoa New Zealand has been difficult for most retailers, with inflation, high interest rates, and a weak economy significantly reducing consumer demand," Dame Joan said.
"However, our trading performance and operational execution have fallen short and exacerbated these challenges," she said.
Interim chief executive John Journee, who replaced Nick Grayston earlier in the year, said the company "scored too many own goals".
"Our ecosystem strategy was too ambitious, and we took our eye off the ball on product. We held onto Torpedo7 and TheMarket.com too long, reacted too slowly to changing customer spending, and fell out of step with what Kiwi families want," Journee said.
"We've made mistakes and we own that. But we know where we went wrong, and we're already working hard to fix it," he said.
The Warehouse sales fell 5.3 percent to $1.8 billion, Warehouse Stationery sales fell 6.7 percent to $231.9m and Noel Leeming sales decreased 5.3 percent to $1b.
Looking ahead, Journee said the retail environment remained tough, and the company was cautious about when retail spending could bounce back.
"While we've been able to regain market share in our core retail segment in the first six weeks of FY25, our sales have been soft, and our gross profit remains under pressure as we clear the last of our winter stock and continue to reset our product offer," he said.
The company is scheduled to provide a first quarter trading update in early November.