Warehouse Group posts $2.8 million loss

Thursday, 2 October 2025

The Warehouse Group made an after-tax loss of $2.8 million in the year to August 3, the second year in a row of a loss.

The operator of retail chains The Warehouse, Warehouse Stationery and Noel Leeming grew group sales by 1.6% to $3.1 billion in the year, despite one of its retailers’ sales declining in the period.

The Warehouse sales were up 1.4% to $1.8b and Noel Leeming sales increased 3.3% to $1b. Sales at Warehouse Stationery decreased by 2.5% to $226 million.

The group will not pay a dividend for the year.

Chairperson Dame Joan Withers said these financial results were the result of economic and retail conditions that remained “extremely challenging“.

“Unemployment and inflation remain comparatively high, and consumer confidence is down, putting further pressure on discretionary spending and intensifying retail competition.

“Against that backdrop, The Warehouse Group held its top line, improved sales in the second half, and made meaningful progress on cost control,” Withers said in an NZX update.

“While profitability is not where we want it to be, the decisions made this year have laid the foundation for improved margin and bottom line performance as the economic recovery unfolds.”

A trend of declined profitability continued in the year, with a net loss of $2.8m reported in the year compared with a net loss of $54.2m in the same period a year earlier.

The Warehouse Group’s operating profit declined to $1.3m in the year, down from $28.9m in FY24.

The group’s gross profit margin also declined, which the company attributed to The Warehouse’s resetting of key price points in its higher-margin home and apparel categories, along with a shift in sales towards lower-margin categories.

It said Noel Leeming, The Warehouse and Warehouse Stationery ran more clearance activity than planned to clear seasonal ranges through the year.

Group chief executive Mark Stirton, who took on the role in August, said the company took deliberate steps to strengthen its performance and saw early signs of improvement, particularly in the second-half.

“In FY25, we reset how we operate. We simplified our organisational structure and returned to a brand-led model with retail ways of working. We also reset our pricing, improved our product range, and controlled costs and capital expenditure,” Stirton said.

“Customers are responding well to our new ranges and pricing, with higher conversion and more units sold, especially in home, apparel, toys, and health and beauty. Stronger second-half sales show that when we get the offer right, customers respond quickly.

“Economic conditions remain tough and continue to affect consumer confidence, but we have additional work to do on rebuilding our retail fundamentals within buying and planning which will be a key focus.”

Stirton said there was “growing excitement in the business” as the company worked to “unlock the full potential” of its brands.

Sales at The Warehouse grew by 2% in the second-half of the year, with toys being a lucrative category for the red shed, with sales up 8% in the year, along with strong sales increases in cosmetics, health and wellbeing products.

Declining sales at Warehouse Stationery stabilised in the second-half of the year, while sales at Noel Leeming increased 2% in the same period.

Stirton said FY25 was a “reset year” for The Warehouse Group and early signs of progress following implementing its new strategy were encouraging.