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Warehouse sales up 1.9% as stationery leads growth, Red Sheds flat

Warehouse Group, the country's biggest listed retailer, has boosted first-quarter sales 1.9%, with its Blue Shed stationery stores leading growth as its Red Sheds report a flat result.

Group sales rose to $377.3 million in the three months ended October 28 from $370.4 million in the same period a year earlier, the Auckland-based company says in a statement.

Sales at its Red Shed stores edged up 0.8% to $325.7 million and were flat on a same-store basis, while the stationery outlets' revenue climbed 9.1% to $51.6 million. The Blue Sheds' sales rose 3.7% on a same-store basis.

"While same store sales in September and October were lower than the prior corresponding months, largely due to the cycling against the Rugby World Cup, the Warehouse sales performance in August was very strong and we are set up very well to enter the important second quarter," chief executive Mark Powell says.

"I am confident that our decision to remove some of our home appliance and whiteware products from sale, while having a short-term impact, is clear evidence of the Warehouse putting the customer first, which will benefit overall brand perception in the long-term."

In September, the retailer reported a 14% drop in full-year earnings to $65.2 million, in line with guidance, and flagged mixed trading conditions for the 2013 year.

Warehouse reported a 138% lift in sales through online channels and last month launched its own web-based promotions.

Chairman Graham Evans says the quarter was a mixed one, but the board still backs the company's strategy will deliver value to shareholders.

The shares rose 0.3% to $3.12 in trading on Friday and have gained 4% this year.

(BusinessDesk)

Comments and questions
1

I can absolutely believe that flat result, I was in there over the weekend and by comparisson they are about the dearest in the retail sector right now, I was quite stunned, expensive garden seedlings, confectionary canned drinks,shoe wear clothing etc etc etc, in fact I think Joe Bloggs average can buy just about everything the the red shed sells cheaper at any other outlet most female shoppers are very astute when it comes to comparing value and prices, I was advised in the store that K Mart was the place to shop by one disgruntled lady.
Perhaps we under estimate just how tight it is out there for the average family man??