Warehouse Group, the country's largest listed retailer, beat its first-half profit forecast as investments over the past few years started to bear fruit.
The Auckland-based company said profit adjusted for one-time items rose 22 per cent to $45.6 million in the 26 weeks ended January 31, above its forecast profit of $43 million to $45 million. Revenue rose 8.4 per cent to $1.57 billion, a gain of 7.1 per cent when adjusted for the impact of a later finish to the current half, which included extra back-to-school trading.
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Warehouse, known for its distinctive 'red shed' big barn discount retail stores, has spent hundreds of millions of dollars overhauling its outlets and buying new businesses to drive future growth in the past few years.
That investment is flowing through to earnings in the latest period, with operating profit margins growing across The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo7, helping lift the total retail group's operating profit margin by 90 basis points to 4.9 per cent.