NZ continues to outshine Aussie at The Warehouse

By Phil Boeyen, ShareChat Business News Editor

Tuesday 7th August 2001

Australia has again let down The Warehouse (NZSE: WHS), registering a drop in sales for the latest quarter while the New Zealand operations racked up creditable increases.

The latest sales figures are for the three months ended July and show sales throughout the group grew by $63 million to $394 million during the period, a rise of 19% over the same quarter last year.

In New Zealand same-store sales at The Warehouse branded stores rose 14% for the quarter, which the company says was driven by a combination of strong winter merchandise sales and a series of promotional and clearance sales.

However gross margin in the quarter contracted owing to price action taken to aggressively chase market share and clear surplus stock.

The group's branded chain of Warehouse Stationery stores saw a significant jump in same store sales for the quarter, rising 25%.

Sales across the chain's 33 stationery stores increased by 48% to $25.6 million, and the success of this part of The Warehouse's business should continue its upward growth with a further six stores due to open by the end of this year.

In Australia the company's Clints and Solly's brands fared considerably worse than their show-off kiwi cousins with sales falling 2.2% to $89.9 million for the three month period compared with last year.

However in their defence The Warehouse says the same quarter last year included the positive impact of pre-GST spending in Australia, which has contributed to the weaker fourth quarter comparison.

For the 12 months ended July sales at the Australian stores grew by 8.8% to $399 million.

Overall, sales at The Warehouse group grew to $1.654 billion for the year ended July, up 15% on a year ago.

The company is due to announce its full-year profit result on September 9.

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