Warehouse Sales Decline as Mild Weather Reduces Heating, Clothing Demand
Warehouse Group Ltd., New Zealand’s biggest discount retailer, said third-quarter sales fell 1.9 percent as entertainment spending slowed and warm weather reduced demand for winter heating and clothing.
Sales declined to NZ$376 million ($262 million) in the three months ended May 2, Auckland-based Warehouse said in a statement. Full-year profit will be similar to last year’s NZ$85.2 million after excluding one-time costs, the company said, reiterating its March 12 forecast.
Warehouse, 10 percent-owned by Australia’s Woolworths Ltd., has resumed expansion of its stationery and department outlets as New Zealand emerges from its worst recession in 30 years. General merchandise sales fell 3.3 percent after adjusting for two extra stores and additional trading days a year earlier.
The decline “was almost entirely due to a continued contraction in the music and DVD market and a very slow start to winter with unseasonably warm weather impacting key categories such as winter apparel and heating,” Chief Executive Officer Ian Morrice said in a statement.
Warehouse makes most of its profit at its 87 Red Shed general merchandise stores. Sales declined 2.6 percent to NZ$323.8 million.
Revenue from the group’s 47 stationery outlets increased 2.2 percent to NZ$52.2 million and jumped 11 percent after excluding new stores and extra trading days a year earlier.
Group-wide nine-month sales of NZ$1.29 billion fell 0.9 percent from a year earlier.