Warehouse Group’s profit falls 19.3% amid cost of living crisis
Warehouse Group is expanding its grocery offerings.photo/courtesy
Warehouse Group’s net income for the year was $87 million, down 19.3% from last year’s $107.8 million.
The company closed its Auckland brick-and-mortar stores 23% of the reporting period as it battled rising inflation.
In the year ended July 31, the retail group achieved approximately $3.3 billion in sales across The Warehouse, Warehouse Stationery, Noel Leaming and Torpedo 7 stores.
Group sales of $3.3 billion decreased 3.5% from $3.41 billion in 2021.
Warehouse said the decline in earnings could be attributed to an $11.4 million charge from accounting for a cloud computing software arrangement.
The Group will pay a final dividend of 10 cents per share, bringing the full year dividend to 20 cents per share.
Warehouse segment sales decreased 4.3% to $1.7 billion, while Warehouse Stationery sales decreased 9.1% to $249.7 million.
Noel Leeming’s good run came to a halt as electronics retailer sales fell 2.8% to $1.1 billion.
Meanwhile, outdoor gear retailer Torpedo7 bucked the trend with sales up 8.1% to $171.5 million.
Online marketplace TheMarket increased average customer spend by 14%, delivering $110 million in gross merchandise value.
In the same year, the group’s online sales increased 39.8% to $503 million, now accounting for 15.3% of total sales.
Warehouse Group CEO Nick Greyston said the results were encouraging despite the first half of the year being “one of the most turbulent periods since the start of the Covid-19 pandemic”. Said it was something.
“While 2022 has been a year disrupted by the Covid-19 lockdown, we are pleased with this solid performance across the Group and our overall momentum as we continue to build a world-class retail ecosystem.
In a market update, Greyston said, “I would like to thank all the team members who have been able to adapt quickly again in changing and difficult times and to be there for our customers.
“The first half was the most difficult, with sales down 4.3% year-on-year. In the second half, the disruption began to ease, supply chains and networks became easier to navigate, and customers returned to stores. Orange under the traffic lights.”
Across all brands, click-and-collect sales are up about 55% year-over-year, accounting for nearly half of the group’s online sales, Greyston said.
The Group’s cost of doing business increased $35.2 million year over year due to additional costs including SaaS computing upgrades, increased advertising on digital media and TheMarket.com, and Covid-19 non-labor costs .
focus on groceries
Grocery has been a focus of the group throughout 2022, offering staples such as bread, cheese and milk at low prices.
Greyston said he is encouraged by the customer feedback the group has received over the past six months and hopes the government’s move to make the grocery sector fairer can expand the group’s offerings.
“Despite rising food prices, we have maintained prices for key essentials such as butter, milk and bread, as promised in March 2022, and our customers have benefited from this.” estimated that New Zealand families saved $2.70, focusing on making a delicious breakfast of bread, butter, milk, Weet-Bix and coffee affordable.
“Grocery, pantry, health and beauty, laundry and pet care are all growing categories for us and are now available in all 89 existing The Warehouse stores. and continue to provide NZ’s grocery essentials at the best prices.
“We continue to hope that continued government action to level the playing field for grocery retail and enable access to equitable prices will enable us to do more. Equal access to supply and distribution remains an unresolved challenge.”
Warehouse stock is trading at about 3.44 cents a share, down from its recent high of $3.75 earlier this month.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12554981&ref=rss Warehouse Group’s profit falls 19.3% amid cost of living crisis