Warehouse warning puzzles analysts

Photo / Michael Bradley.

Market players have been left scratching their heads after a trading inquiry by NZX regulation into The Warehouse.

The market operator queried the discount retailer over its continuous disclosure this week after its share price rose from $3.83 on Friday, October 1, to $4 on Monday, October 4 - an increase of 3.9 per cent.

Stock Takes notes there isn't exactly a lot of trading going on right now but even in slow times a share price increase of less than 4 per cent doesn't seem a lot. There have also been plenty of times when journalists have pointed out unusual price rises of 10 per cent or more and not a murmur has come out of the NZX. Deutsche Bank analyst Chris Byrne is just as puzzled. "For just under 4 per cent it seems a bit strange."

Byrne says it's possible the query has come on the back of strong run in The Warehouse's share price in the last few months but the whole retail sector has performed strongly and The Warehouse hasn't been the stand-out.

A spokeswoman for the NZX said there was no set percentage price movement for triggering a query. She said NZX took into account a variety of factors, including general market movements and any recent announcements by the issuer.

The Warehouse's first quarter sales update is due out on November 12 and while analysts are hoping to see a pick-up in performance from the group, it's well recognised that the retail sector remains tough out there. Shares in The Warehouse closed down 7c at $3.88 yesterday.