The Warehouse Group First Quarter Sales Update

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TO: Market Information Services Section
NZX Limited

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THE WAREHOUSE GROUP FIRST QUARTER SALES UPDATE

Group Sales in Q1 of $668.3 million (up 3.6% compared to Q1 FY18)
1,2

The Warehouse (Red Sheds) Same Store Sales up 2.7%
1

Warehouse Stationery (Blue Sheds) Same Store Sales up 4.1%
1

Noel Leeming Same Store Sales up 3.2%
1
Torpedo7 Group Same Store Sales down 2.7%
1



Auckland, 9 November 2018
The Warehouse Group (TWG) today reported retail sales for the first quarter ending 28 October 2018 of
$668.3 million, up 3.6% from the same quarter last year. This is an encouraging start to the year given the
first quarter was down 1.7% for the same quarter last year.


The Warehouse
The Warehouse reported sales for the first quarter of $360.1 million, an increase of 2.0% or $7.2 million
compared to the same quarter last year. Same store sales increased 2.7% in the quarter.

The return to sales growth in the quarter comes after five periods of same store sales declines as the
business transitioned to a full EDLP model. Volumes of product sold increased 2% with the remainder of
sales growth coming through an increase in average selling price.

There has been some good early demand for some of the spring seasonal categories such as outdoor
furniture.

Our gross margin percentage improved slightly compared to Q1 last year. The overall market remains very
competitive for both general merchandise and apparel. We are focused on continuing to improve our gross
margin and maintaining the positive momentum in sales as we go into our largest sales quarter with
Christmas and summer seasonal products.


Warehouse Stationery
Warehouse Stationery reported sales for the first quarter of $61.7 million, an increase of 4.4% or $2.6 million
compared to the same quarter last year. Same store sales increased 4.1% in the quarter.

The stationery business recorded a solid sales performance as we cycled against the significant system
integration between The Warehouse and Warehouse Stationery which took place in Q1 last year and
caused some disruption in sales.

Gross margins improved during the quarter and we continue to focus on this area. We continue to evaluate
the operation of some of our stationery stores within our Warehouse store footprint. Our Te Rapa store was
converted to this format during the period bringing the total number Warehouse Stationary stores within a
Warehouse store footprint to five.

The stationery business is now focused on the critical Christmas and Back to School periods ahead.

Noel Leeming
Noel Leeming reported sales for the first quarter of $209.6 million, an increase of 7.4% or $14.5 million
compared to the same quarter last year. Quarterly same store sales increased 3.2%.

The continued focus on passionate experts and end to end service has delivered results in the extremely
competitive appliances and technology market. Key areas of growth included communications, wireless
audio and computer accessories categories.

Within the quarter, Noel Leeming acquired the assets of the Appliance Shed, including its leased store
locations in Auckland. Three of these stores have been converted into additional Clearance stores for Noel
Leeming.


Torpedo7 Group
Torpedo7 Group reported sales for the first quarter of $37.0 million, down 5.6% compared to the same
quarter last year. Quarterly same store sales decreased 2.7%.

During the 2018 financial year, the business decided to focus on its core New Zealand business and divest
the Shotgun brand, close the Number 1 Fitness website as a separate fitness equipment channel, and
remove its separate Australian website for 1-day. This change of business contributes to the decline in
quarter 1 sales versus last year. Continuing business sales were up 14.1% driven from store network
expansion. Within the quarter, Torpedo 7 opened new stores in Palmerston North, Te Rapa, Manukau and
New Plymouth bringing the total number of stores to 18.


Online
Group online sales (NZ) were $49.3 million, up 5.3% compared to the same quarter last year. Excluding T7,
online sales growth for the quarter was 27% versus last year. Online sales as a percentage of total Group
sales has increased to 7.4%.


The Annual Shareholder Meeting will take place on Friday 23
rd
November 2018.

Note 1: Compared to the same period last year
Note 2: The Warehouse, Warehouse Stationery and Wholesale businesses of the Group were amalgamated from the commencement
of the current financial year. Following the amalgamation the Group restated the prior year comparative sales figures reported for The
Warehouse segment to remove intersegment sales connected with the Wholesale business which are offset by a corresponding
adjustment to the amount of intercompany sales eliminations.



ENDS

Contact details regarding this announcement:

Investors and Analysts: Jonathan Oram, Group Chief Financial Officer
To be contacted via Annie Zhang, Investor Relations Manager, +64 21 831 479,
annie.zhang@thewarehouse.co.nz

Media: Nick Grayston, Group Chief Executive Officer
To be contacted via Tanya Henderson, GM Corporate Communications on +64 21 195 2854,
media.enquiries@thewarehousegroup.co.nz

Background: The Warehouse Group Limited

The Warehouse Group Limited comprises 93 Warehouse stores, 70 Warehouse Stationery stores, 77 Noel Leeming stores and 18
Torpedo7 stores in New Zealand plus several online businesses. In FY18 The Group had an annual turnover of $3.0 billion and
employs over 12,000 people.

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Reporting Period30 July 2018 to 28 October 2018
Previous Reporting Period31 July 2017 to 29 October 2017
Quarterly Retail Sales information:
SalesSales
(30 July 2018 to 28 October 2018)
20192018
($ Million) ($ Million)
The Warehouse
360.1 352.9
+ 2.0 % + 2.7 %
Warehouse Stationery61.7 59.1
+ 4.4 % + 4.1 %
Noel Leeming (NLG)209.6 195.1
+ 7.4 % + 3.2 %
Torpedo737.0 39.2
- 5.6 % - 2.7 %
Store Numbers
20192018201920182019201820192018
Start Quarter 1
93 92 74 77 70 69 14 12
End Quarter 1
93 93 77 78 70 69 18 11
Store footprint (Square Metres)
20192018201920182019201820192018
Start Quarter 1
505,645 501,807 76,055 73,591 71,491 73,216 19,647 10,826
End Quarter 1
504,602 503,970 80,273 74,591 71,376 73,216 26,186 12,652
- - - 1
- 2 - -
3 - - -
4 - - -
Torpedo7
THE WAREHOUSE GROUP LIMITED
First Quarter Sales
First quarter sales
Change in
sales
Change in
same store
sales
Torpedo7The Warehouse
New
Stores
Replacemen
t
stores
Store
Closures
Noel LeemingWarehouse Stationery
The Warehouse
Store
Extension/
Reduction
The Warehouse
Warehouse Stationery
Noel Leeming
The Warehouse, Warehouse Stationery and Wholesale businesses of the Group were amalgamated from the commencement of the current
financial year. Following the amalgamation the Group restated the prior year comparative sales figures reported for The Warehouse segment
to remove intersegment sales connected with the Wholesale business which are offset by a corresponding adjustment to the amount of
intercompany sales eliminations.
Noel LeemingWarehouse Stationery
Torpedo7
Store changes during the quarter