The Warehouse Group (WHS) H2 2024 earnings summary

Executive summary

• FY24 was one of the most challenging years, with significant macroeconomic headwinds, operational issues, and strategic missteps leading to the first-ever annual net loss of $54.2 million, compared to a net profit of $29.8 million in FY23.

• Group sales declined 6.2% to $3.0 billion, with all major brands experiencing sales drops and operating profit falling 65.3% to $28.9 million.

• Leadership changes included a new interim CEO, board restructuring, and a strategic reset away from the group ecosystem model to focus on three core brands and cost discipline.

• Divestment and closure of underperforming businesses, notably Torpedo7 and TheMarket.com, contributed to the annual loss.

• No final dividend declared; interim dividend of 5.0 cents per share represented a 92% payout ratio on adjusted NPAT.

Financial highlights

• Group sales: $3,037.6m, down 6.2% year-over-year; gross profit: $1,020.9m, down 6.2%; gross margin flat at 33.6%.

• Operating profit: $28.9m, down 65.3%; operating margin 1.0%.

• Adjusted NPAT: $18.9m, down 67.1%; reported NPAT: ($54.2m), a swing of -281.8%.

• Net debt increased to $50.7m; liquidity headroom $419.3m.

• Interim dividend of 5.0c per share paid; no final dividend due to net operating loss.

Outlook and guidance

• Retail environment in New Zealand remains tough and unpredictable, with continued pressure on consumer demand and gross margin as winter stock is cleared.

• Early FY25 trading shows soft sales and gross profit under pressure, but some market share recovery in core retail.

• Strategic focus is on regaining market share, especially in higher-margin categories, and renewing product ranges.

• No further guidance provided on H1 FY25 operating profit; Q1 FY25 trading update scheduled for November 8, 2024.