The Warehouse Group Limited Analysis

Overview

The Warehouse Group Limited (WHS) was established in 1982 by Stephen Tindall, initially selling imported and manufactured clearance lines in Takapuna, Auckland. The Warehouse has subsequently grown to become one of New Zealand's largest general merchandise retailer. The company also owns The Warehouse Stationery chain.

The group was listed in November 1994 following a public issue of 23.6 million ordinary shares at $2.50.

In 2000 it bought two Australian discount variety chains with 126 stores, Clint's and Silly Solly's, for A$118m, incorporating them into a division called The Warehouse Australia. In November 2005, it agreed to sell its Australian business.

On 31 July 2008 the Court of Appeal announced that it had set aside a clearance granted by the High Court for Woolworths and Foodstuffs to acquire up to 100% of the shares in WHS. Both Woolworths and Foodstuffs hold 10% each of WHS.

On October 9, 2008, WHS announced that, after a review, it had decided to discontinue its plan to roll out the Warehouse Extra format as it did not meet its investment criteria.

Performance

The following information was extracted from The Warehouse Group Limited's annual results, released on 2 October 2025:

The Warehouse Group announces FY25 Annual Results, marking a year of reset and progress

Highlights

• Group Sales, up 1.6% to $3.1 billion, flat on a 52-week same store sales comparable basis;

• The Warehouse Sales were up 1.4% to $1.8 billion;

• Warehouse Stationery Sales were down 2.5% to $226.0 million;

• Noel Leeming Sales were up 3.3% to $1.0 billion;

• Gross Profit Margin was down 140 basis points to 32.2%;

• Cost of Doing Business (CODB) reduced as a percentage of sales by 40 basis points to 32.2%.

• Operating Profit (EBIT pre-NZ IFRS 16) of $1.3 million, down from $28.9 million in FY24;

• Reported Net Loss After Tax was $2.8 million (FY24: Net Loss After Tax $54.2 million);

• Capital Expenditure tightly controlled at $12.4 million, down from $39.0 million in FY24;

• Net Debt was $96.1 million, due to the timing of year end, and net cash flows in the 53rd week including month end supplier payments. If year end had of been at the same time as FY24, net debt would have been approximately $13 million;

The Warehouse Group today announced its financial results for the year ended 3 August 2025, marking a year of reset and progress in an extremely challenging and competitive environment. While profitability remains below acceptable levels, the Group took deliberate steps to strengthen its ongoing performance and saw early signs of improvement, particularly in the second half, with improved sales and margin trends.

Chair, Dame Joan Withers, said FY25 was a year of decisive change and deployment of the brand led strategy outlined last year. “Economic and retail conditions in New Zealand remain extremely challenging. Unemployment and inflation remain comparatively high, and consumer confidence is down, putting further pressure on discretionary spending and intensifying retail competition. Against that backdrop, The Warehouse Group held its top line, improved sales in the second half, and made meaningful progress on cost control. While profitability is not where we want it to be, the decisions made this year have laid the foundation for improved margin and bottom line performance as the economic recovery unfolds.”

Group sales were $3.1 billion, up 1.6% on FY24, flat on a 52-week same store basis. Operating profit (EBIT pre-NZ IFRS16) was $1.3 million, with a reported net loss after tax of $2.8 million and adjusted net loss after tax of $4.5 million.