The Warehouse has recorded flat revenue and operating profit for the six months ended January and its full year net profit is unlikely to move much further from last year.Revenue at the retailer was down 0.5% to $918.9 million, while operating profit fell
The Warehouse has recorded flat revenue and operating profit for the six months ended January and its full year net profit is unlikely to move much further from last year.
Revenue at the retailer was down 0.5% to $918.9 million, while operating profit fell 1.2% to $83.2 million.
Net profit after tax for the half year did rise by 17.3% to $57.4 million, but last year’s result included a $7.4 million cost incurred in the exit from its failed foray into the grocery market.
With those $11.3 million in fresh food and liquor sales from last year excluded, the current period’s revenue switches from the small 0.5% fall to a equally tiny 0.7% rise.
While revenue remains flat, the country’s biggest retailer has continued its tradition of returning strong dividends, upping its interim dividend by 1.5cps to 17.0cps
Sales at the big red sheds were down, but the Stationery division showed promise.
The Warehouse adjusted sales of $821.0 million were down 1.2%, with a drop of 1.1% in the second quarter, leading to a 3.2% fall in operating profit to $78.7 million.
Meanwhile, operating profit in the Stationery division was up 139.8% to $3.0 million, with same store sales rising 7.2% to $96.2 million. Sales in the second quarter were up 10.2%.
Chief executive Ian Morrice said the recovery in overall retail spending remained patchy, although some specialist sectors were seeing “quite a bounce-back” after the recession.
“Department stores as a sector has not seen the lifts experienced by softgoods, clothing and appliance specialists in the second six months of 2009. The Warehouse’ sales performance reflects this
“Our strong overall margin performance achieved in the first half of the 2009 financial year has been maintained, although having planned for increased sales which didn’t eventuate, we have needed to clear more seasonal inventory than the same period last year impacting gross margins.”
Mr Morrice said the company was making progress on a number of the its growth initiatives, but these gains were not enough to offset the exit from fresh food and liquor and sales shortfalls in other areas.
He said Warehouse Stationery sales were expected to recover to levels at least equal to the 2008 financial year.
The company also confirmed it was on track to match last year's full year profit.
