Warehouse expects profit fall after poor Christmas sales

Discount retailer The Warehouse said today it expected to post a lower first half net profit on the back of disappointing Christmas sales.

The group said in a statement it expected to post a net profit of between $50m and $54m for the six months ending January 31 -- down 3 per cent to 10 per cent on the same time last year.

The results will be released on March 14.

But the group expected to boost its full year earnings by 8 per cent to 16 per cent for the full year, to $66m to $71m.

The group had been looking to boost sales over the key Christmas shopping season of November and December. But same-store sales at the group's flagship Red Shed stores fell 1.3 per cent over the two months.

The group put this down to a disappointing performance in seasonal categories such as clothing, sporting goods, toys and gardening.

But chief executive Ian Morrice said the group could not comment meaningfully on its performance until it had overlaid its sales number with industry data.

The group said its Yellow Sheds in Australia were on target for a "substantial reduction" in operating losses for the full financial year, but did not provide details.

Shares in The Warehouse closed at $3.59 yesterday, having ranged between $3.52 and $5.32 over the past 12 months.

- NZPA