New Zealand department store chain The Warehouse Group has cashed in after reshaping operations.
The group achieved sales across the board for the third quarter and confirmed a profit of $604.8 million for the period ending April 27, 2014, boosted by solid performances from each retail brand.
The Warehouse (Red Sheds) same store sales rose 3.0 per cent, while Warehouse Stationery (Blue Sheds) same store sales rose 6.1 per cent and Noel Leeming same store sales increased by 10.9 per cent.
Results for the The Warehouse (Red Sheds) were driven by strong sales growth in the apparel, baby, petcare, hardware, gaming, jewellery, consumer electronics, appliances and whiteware and confectionery categories.
New initiatives in the quarter, such as the introduction of the Schooltex brand of school uniforms have added to the Red Sheds range of products.
The addition has lured new customers into store, which has supported growth in both transaction count and basket size, according to the company.
The Warehouse Group said apparel sales in the third quarter, in particular, showed good growth compared to the same period a year ago.
However, the relatively warm seasonal weather in this period has resulted in apparel and heating sales in the third quarter being slightly below planned levels.
Commenting on seasonal trade group CEO Mark Powell said he is pleased with the final result.
“While a late start to winter has had some impact on our apparel sales, it is pleasing to still see good growth in apparel compared to last year, suggesting that this years’ winter ranges will trade well as the cooler weather kicks in,” he said.
Year To Date (YTD), this means the Red Sheds reported sales are $1,287.1 million, an increase of 5.3 per cent or $64.9 million compared to last year YTD. Same store sales have increased 3.8 per cent YTD.”
“The Red Sheds continues to make progress as New Zealand’s ‘House of Bargains and Home of Essentials’, with 13 quarters of same store sales growth and continued increases in the number of customers shopping in our stores and online.
“This all supports our strategy of ongoing investment in our stores, our people and our products, to deliver improvements for our customers. The sales and transactions increases tell us that they are noticing the difference.”
Going forward, The Warehouse Group chairman Ted van Arkel said the group is well-positioned to continue delivering strong results.
“The group strategy continued to develop in this last quarter. The significant reshaping of the group has positioned us well for a period of consolidation, where the emphasis will be more on leveraging returns from the base we have built.
“The board is confident this strategic focus will deliver long term results for our shareholders in a retail environment that is continuing to evolve as customers’ buying habits change.”