Highlights

  • Group sales slipped 1.4% in FY26 Q3 as consumer spending remained under pressure.
  • Online sales rose 5.4%, supported by strong digital Demand at Noel Leeming.
  • Gross profit margins improved despite rising freight and operating costs.

Overview

The Warehouse Group Limited (NZX:WHS) delivered a mixed third quarter trading update for FY26, reporting softer overall sales as New Zealand consumers remained cautious amid rising living costs and economic uncertainty. Group sales for the 13 weeks ended 3 May 2026 fell 1.4% to $700.8 million, although like-for-like sales remained broadly flat compared with the same period last year. The company highlighted weaker customer foot traffic during the quarter, partly driven by higher fuel prices, while shoppers spent more per visit. Online sales continued to strengthen, particularly at Noel Leeming, helping offset softer in-store demand. Despite challenging trading conditions and higher freight costs, improved Margin management supported growth in overall gross profit margins during the quarter.

How Did The Warehouse, Warehouse Stationery and Noel Leeming Perform?

The Warehouse Brand reported quarterly sales of $405.3 million, down 2.5% year-on-year, although categories such as apparel, health, and beauty showed improvement. Warehouse Stationery recorded sales of $57.1 million, with timing impacts related to the back-to-school season affecting reported growth, while like-for-like sales increased 3.1%. Noel Leeming delivered one of the stronger performances within the group, with quarterly sales rising 0.7% as strong Easter trading and continued online demand supported results. The electronics retailer also announced plans to open a new flagship Queen Street store in Auckland later this year.

Why Is The Warehouse Group Remaining Cautious About The Outlook?

The company expects trading conditions to remain difficult as inflationary pressures, global instability, and weaker consumer confidence continue affecting retail spending. Rising international and domestic freight costs are also placing pressure on profitability across the sector. Management said its immediate focus remains on cost control, Working Capital discipline, and improving retail fundamentals while balancing value offerings for customers. The Group noted that consumers are becoming increasingly selective in their spending habits, making fewer shopping trips but purchasing more items during each visit. Despite these pressures, management remains focused on strengthening margins and supporting long-term operational performance.