The Warehouse bounces back with strong sales increase

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The Warehouse more than doubled its annual profit thanks to sales growth and increased margins.

Photo: 123rf

Highlights (for the year until August compared to the previous year)

  • Net earnings $ 117.6 million vs $ 44.5 million
  • Adjusted earnings $ 175.5 million vs. $ 32.1 million (adjusted for wage subsidy reimbursement / restructuring)
  • Turnover 3.4 billion dollars against 3.2 billion dollars
  • Gross margin 36.4% vs. 32.6%
  • Final dividend 17.5 cps vs Nil
  • The nation’s largest retailer has rebounded strongly from the Covid-ravaged performance of the previous year with a sharp increase in sales across the company, supported by the increase in online and click and collect purchases.

    “A pent-up demand after the blockages, strong operational performance and a solid financial situation have enabled the group to reimburse the Covid-19 wage subsidy of $ 67.6 million for our 11,000 employees in December 2020”, declared the president of the group, Joan Withers.

    The sharp increase in margins supported earnings growth as the company sold more shares, reducing its need for liquidation sales and marketing, with the cost of doing business being a lower percentage of revenue than the last year.

    Red Shed department stores reported a 6% sales increase, 10% margin growth and accounted for just over half of the group’s sales. It was followed by the chain of household appliances and electronics Noel Leeming, whose sales increased by 12% and represented a third of the group’s sales.

    Warehouse Stationery sales edged up and the Torpedo 7 outdoor chain returned to profitability with higher sales and margins.

    Chief Executive Nick Grayston said his technology upgrade allowed it to operate more efficiently during Covid restrictions and made it easier for consumers to shop online, accounting for 11.5% of the group’s sales. .

    He said supply disruptions and shipping shortages have delayed product entry into the country, but are expected to be in a better position than last Christmas.

    Warehouse staff received a bonus – $ 1,000 for full-time staff and $ 500 for part-time staff.

    Last year, the company restructured its operations, resulting in the loss of several hundred jobs, as it came under heavy criticism for accepting the government wage subsidy, which it has since repaid.

    Last month, she invested in an online pharmacy company as she tentatively ventured into the healthcare industry.

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