Highlights

  • Adjusted net profit after tax surged 67.1% to $17.9 million, driven by disciplined cost control
  • Group sales modestly increased 0.3% to $1,612.1 million, with like-for-like sales up 0.5%
  • Cost of doing business reduced by $8.6 million, improving efficiency and margins

The Warehouse Group (NZX:WHS) delivered a solid performance for the 26 weeks ended 1 February 2026, navigating a challenging retail environment and ongoing cost-of-living pressures. Group sales reached $1,612.1 million, a 0.3% increase on the prior year, while like-for-like sales rose 0.5%. Gross profit margin was slightly lower at 32.3%, but disciplined cost management reduced the cost of doing business by $8.6 million, improving efficiency to 30.6% of sales. Adjusted net profit after tax jumped 67.1% to $17.9 million, reflecting the benefits of operational improvements, better working capital management, and focused execution across stores. Key seasonal campaigns, including Black Friday, Christmas, and Back to School, performed well despite severe weather impacting some categories. The Group’s strong store network and disciplined capital allocation underpin its continued focus on sustainable growth.

Operational Performance and Store Strategy

The Warehouse Group’s half-year performance highlights strong operational control and targeted execution. While gross margins were under pressure in some higher-margin categories due to deliberate stock clearance and freight costs, second-quarter margin momentum improved, supported by better sales quality and category management. Cost reduction initiatives lowered the cost of doing business by 1.7%, driving a 70-basis point improvement as a share of sales. Store refurbishments, improved ranges, and enhanced in-store experiences contributed to stronger customer engagement. Looking ahead, the Group is set to expand its footprint with new stores in Mangawhai, reinforcing its position as a retailer accessible to more than 85% of New Zealanders within 20 minutes of a store. These strategic openings aim to meet local demand and strengthen community engagement.

Profitability, Capital Management, and Outlook

Disciplined cost control and efficient capital allocation were key to the Group’s improved profitability. Operating profit rose 37.7% to $26.9 million, while reported net profit after tax increased to $15.7 million. Capital expenditure for the half was $5.8 million, focused on store improvements and system enhancements to support customer experience and long-term growth. Net debt stood at $93.3 million, with a comparable net cash position of $45.2 million after adjusting for the 53-week year in FY25. Management remains cautiously optimistic, emphasizing continued execution of cost initiatives, operational improvements, and measured store expansion while navigating volatile consumer confidence, retail competition, and macroeconomic pressures.