The Warehouse Group has posted a $11 million profit, bouncing back from a loss in the previous financial year.
The retail group, which operates The Warehouse, Warehouse Stationery, and Noel Leeming stores, described its results for the 2026 financial year as a "strong recovery".
The $11.2 million net profit after tax comes after the previous year's $2.8 million net loss. Operating profit increased to $22.6 million from $1.3 million in the previous financial year, while gross profit margin was up 40 basis points to 32.6%.
The Group's flagship red shed brand, The Warehouse, remained loss-making but showed signs of improvement – reporting an operating loss of $7.5 million, up from the previous year's $12.2 million loss.
Noel Leeming made the biggest contribution to the result, posting an operating profit of $21.8 million, up from FY15's $11.7 million. Warehouse Stationery's profit increased to $15.9 million from $8.2 million.
Reported sales across the Group were down 1.9% to $3 billion on a 53-week FY25 basis, but up 0.4% on a comparative 52-week same-store basis.
The Group's cost of doing business fell by $29.8 million to 31.8% of sales, an improvement of 40 basis points.
Operating cash flow was $193.5 million, up $121.2 million, and capital expenditure increased to $21.1 million from $12.4 million the previous year, with investment primarily directed to stores.
The company's net debt was $17 million, a reduction from $96.1 million in the 2025 financial year.
The company declared no final dividend for investors.
The Group said margin growth was driven by stronger buying and retailing discipline, improved ranges, tighter inventory management, and a higher proportion of full-price sales
Group chair John Journee said the company had made "meaningful progress" during the year, taking action that allowed it to finish in a "much stronger position".
"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.
"While the Board is pleased with the progress made, materially improving profitability remains our primary ambition."
CEO Mark Stirton said the result showed internal changes were gaining traction.
"Our teams have worked incredibly hard through another year of significant change. We're buying better, managing inventory more effectively, improving our ranges and pricing, and running the business with greater discipline.
"At the same time, we're investing again in stores, the brand, customer experience and growth. 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."
The Group said sales in the first weeks of the 2027 financial year had been "broadly in line" with the year prior.
Stirton said improving performance would remain the Group's biggest priority.
“With consumer confidence and economic growth subdued, retail conditions are expected to remain challenging. We can't control those factors, so we're concentrating on improving the areas within our control and delivering a better result regardless of market conditions.
"We will achieve that by delivering better value and a better customer experience through more relevant ranges, better pricing, better stock management and lower costs."
The morning's headlines in 90 seconds, including Opportunity's challenge to National, and a big milestone for the world's tallest bridge. (Source: 1News)
SHARE ME