The Warehouse Group issues annual operating profit warning
Monday, 24 June 2024
The Warehouse Group says its annual earnings will be down between 6% and 7% compared to the previous year as shoppers spend less.
The operator of The Warehouse, Warehouse Stationery and Noel Leeming said trading was challenging with “increasingly subdued consumer demand” compounded by a mild winter, resulting in lower than expected fourth quarter sales.
It expects its 2024 financial year profit before interest and tax, excluding the loss from discontinued operations and restructuring costs, to be in the range of $22 million to $30m, compared to $83.4m in the prior year.
“Retail across New Zealand is under pressure, and we are no exception. Market conditions and cost of living pressures have continued to be challenging into our fourth quarter and we expect these conditions to continue through to our year end,” said The Warehouse Group interim chief executive John Journee.
“We are taking decisive action internally to address areas we can improve. We are exercising tighter cost control and we have a laser focus on trading our core brands, The Warehouse, Warehouse Stationery and Noel Leeming.”
The Warehouse Group will report its annual results on September 26.
Last month the group announced chief executive, Nick Grayston, would step down feffective immediately. He was replaced by former independent director Journee, who has worked across the business for 15 years.
Following Grayston's departure, the group has undergone a shake up among its executiveas part of its plans to rejuvenate the company and its performance.
Six of its nine executive roles were disestablished, and five new roles reporting to the chief executive were created.
As a result, chief sales and customer officer Jonathan Waecker and chief information officer Edwin Gear will leave the group by mid-September.
“We're not where we need to be, and we must act decisively to fix that. We need to be leaner and focused on our core brands,” Journee said last week.
“As a result, we are making changes to the executive leadership team so we’re laser focused on what we need to deliver.”
The new executive roles include: Ian Carter as operations executive general manager for The Warehouse and Warehouse Stationery, Tania Benyon as merchandise executive general manager for The Warehouse and Warehouse Stationery and Mark Anderton as supply chain and sourcing executive general manager for The Warehouse and Warehouse Stationery.
Jason Bell has been appointed Noel Leeming chief operating officer.
The group said the executive changes were the “first step to simplify and streamline our operating model, reduce cost and sharpen the focus on our core brands”.
The Warehouse Group shares were trading at 97 cents early afternoon on Monday, down 9.35%.