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The Warehouse has raised its first-half profit expectations for a second time.
The Warehouse Group has raised its first-half profit expectation for a second time as trading improves, and it manages costs, lifting margins.
The retailer increased its forecast for net profit in the six months to the end of January by $20 million to more than $110m. It had already raised its forecast to more than $90m last month, following its initial guidance of $70m in December. The forecasts don’t take into account the impact of repaying its $68m government wage subsidy.
The Warehouse Group, which includes The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7, TheMarket and 1Day, experienced strong trading over the January period, combined with excellent operational performance and cost management, chief executive Nick Grayston said in a statement to the NZX.
The group’s trading gross margin will increase by about 185 basis points, ahead of its previous expectation of 170 basis points, and the company expects to be holding about $183m in cash, up from $168m at the end of its financial year on August 2, he said.
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The Warehouse is among retailers which have benefited from a bounce back in trading as consumers spent up following lockdown. The pandemic came at a time when the company was on the cusp of a major restructuring, which saw it close some stores, cut hundreds of jobs and change rosters which the retailer said was necessary to respond to shifts in shopping behaviour.
The company is scheduled to release its first-half results on March 25.
Shares in The Warehouse rose 4.3 per cent to $3.38 in mid-afternoon trading, and earlier touched $3.40, their highest level since 2014.
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