Warehouse first-quarter sales flat

Discount retail chain The Warehouse today posted flat first-quarter sales as its Australian operations continued to drag the chain.

The group posted sales of $490.8 million for the first quarter ended October, up 0.5 per cent on the same time last year.

Sales in New Zealand for the period were up 3.2 per cent to $326 million, with same store sales up 0.2 per cent.

The Warehouse Australia reported an 8.7 per cent drop in sales to A$105 million ($113.8 million), while same store sales fell 8.7 per cent.

Warehouse Stationery sales rose 2.9 per cent to $50.2 million, but fell 1.6 per cent on a same store basis.

Group chief executive Ian Morrice said The Warehouse New Zealand had its most positive same store sales result in five quarters.

"This is a creditable outcome in the current retail environment. Our overall sales were slightly ahead of plan, in part due to higher levels of seasonal clearance activity as we make room for new products and ranges."

But he said trading conditions in Australia were hard for retailers during the quarter, although some improvement was seen in October.

"This year's objective for The Warehouse Australia is to break even, and we remain on track to achieve that result," he said.

During the quarter The Warehouse updated its company logo, and continued to revamp its stores.

The group opened a replacement store in Palmerston North and plans to open another replacement store in Lower Hutt in the second quarter. These stores incorporate improved layouts and fixtures trialled at the group's laboratory store in Te Rapa.

Looking ahead to the end of the calendar year, Mr Morrice said The Warehouse was well positioned for its key Christmas trading period, although consumer spending is expected to moderate in the coming year.

Shares in The Warehouse last traded Friday at $4.07, having ranged between $3.04 and $4.39 over the past 12 months.

- NZPA