The Warehouse Group First Quarter Sales Update

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To: Market Information Services Section
NZX Limited
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Auckland, 8 November 2019

The Warehouse Group delivers First Quarter sales increase of 4.0% to $694.8 million

Highlights
• Sales up across four brands, delivering Group sales of $694.8 million and 4.0% year on year
quarterly growth
• Strong same store sales growth in The Warehouse, Warehouse Stationery and Noel Leeming but
a 0.6% decline in Torpedo7
• Opened new Noel Leeming and Torpedo7 stores at Westfield Newmarket, and a Torpedo7
store in Rotorua
• Online sales growth of 9.3%, representing 7.8% of Group sales (excluding TheMarket)
• Launched TheMarket which now hosts over 1,700 brands and over one million products.

The Board of the Warehouse Group (TWG) has today reported retail sales for the first quarter ending
27 October of $694.8 million, up 4% on the same quarter last year, following sales growth in FY19 of
3.6% for the same quarter.
This growth follows a similar trend to last year, in what is the smallest quarter for sales, before the all-
important second quarter encompassing the Christmas and the beginning of the Back to School
periods.
In announcing the result, Group CEO Nick Grayston said the sales growth achieved further
demonstrates that the business transformation underway is reaping rewards.
The Warehouse recorded sales of $368.9 million in the quarter, up 2.4% on the same quarter last year
and 3.1% on a same store sales basis, driven mainly by sales growth in the general merchandise
categories. While summer seasonal categories are showing mixed performance at this early stage,
the business is trading particularly well from a gross profit perspective relative to last year.
Group CEO Nick Grayston said the business is looking forward to continuing this momentum into the
summer season and particularly the showcasing of Apparel and Home customer offers.
Warehouse Stationery recorded sales of $63.0 million, up 2.1% on the same quarter last year, with
same store sales slightly up 0.6%.
Mr Grayston said same store sales were impacted by stores that were integrated into the same
premises as an existing The Warehouse store, as part of the store-within-a-store programme.
Integrated stores are not classified as ‘same stores’ for the purposes of calculating same store sales
growth.

“Performance of Warehouse Stationery stores integrated into The Warehouse stores lifted as a result
of access to The Warehouse’s foot traffic levels,” said Mr Grayston.
Warehouse Stationery performance across key categories was strong during the quarter, notably
Print and Copy which delivered double-digit sales growth relative to the same quarter last year.
Noel Leeming recorded strong sales of $225.0 million, up 7.3% on the same quarter last year and 6.1%
on a same store sales basis.
Mr Grayston said that while Noel Leeming performance was strong across most main categories, it
was notably so in TVs and Computer Accessories, with customers seeking technology options for
viewing the Rugby World Cup.
“In September we were excited to open our Newmarket Westfield store, featuring the Group’s first
digital human, Nola. In a further innovation at Westfield Newmarket, we opened a separate Smart
Home Pop-Up store last month. Feedback on the innovative stores has been overwhelmingly
positive,” said Mr Grayston.
Torpedo7 recorded sales of $38.1 million, up 3.0% on the same quarter last year, but a 0.6% decline
on a same store sales basis. During the quarter two new stores were opened in Rotorua and in the
Newmarket Westfield. At a category level, Bike and Snow were standout performers.
Group online sales were $54.5 million, up 9.3% compared to the same quarter last year. This was the
first full quarter of a centralised online fulfilment model for The Warehouse and Warehouse
Stationery. While it was important to implement this before our largest quarter, there was an impact
on online performance in these brands. Online sales represent 7.8% of total Group sales.
TheMarket was successfully launched in August and now hosts over 1,700 brands and over one million
products. Earlier this week TheMarket launched TheMarket Club, a subscription service that provides
free domestic and international shipping for orders over $45 as well as VIP exclusive offers.
As in previous years, the earnings outlook for FY20 will be dependent on the critical second quarter
trading period and earning guidance will be considered at the end of the second quarter.
The Annual Shareholder Meeting will take place on Friday 22 November 2019.
ENDS
Contact details regarding this announcement:

Investors and Analysts: Jonathan Oram, Chief Financial Officer
To be contacted via Sam Kater
+64 21 953 701, sam.kater@thewarehouse.co.nz

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

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Quarterly Sales
Reporting Period13 weeks to 27 October 2019
Previous Reporting Period13 weeks to 28 October 2018
Quarterly Retail Sales information:
SalesSales
(29 July 2019 to 27 October 2019)
20202019
($ Million) ($ Million)
The Warehouse 368.9 360.1 + 2.4 % + 3.1 %
Warehouse Stationery63.0 61.7 + 2.1 % + 0.6 %
Noel Leeming225.0 209.6 + 7.3 % + 6.1 %
Torpedo738.1 37.0 + 3.0 % - 0.6 %
Store Numbers
20202019202020192020201920202019
Start Quarter 1939377 74 70 70 18 14
End Quarter 1929377 77 70 70 19 18
20202019202020192020201920202019
Start Quarter 1501,537 505,645 80,273 76,055 70,550 71,491 25,890 19,647
End Quarter 1500,342 504,602 80,254 80,273 69,976 71,376 25,676 26,186
- - - 2
- 2 - -
- 1 - -
2 - 1 1
Note:
Same store sales definition
The same store sales percentage represents annual store sales growth calculated by month for comparable stores (same stores). Non comparable stores (changed and
temporary changed stores) which, by virtue of a change in footprint, catchment or other known factors cause a stores sales to be impacted, these stores are deemed to be
changed stores and excluded from the same store sales calculation.
All stores are categorised as either a same store or a changed store or a temporary changed store. Web stores (online) for the purposes of calculating same store sales are
include in the same store sales calculation providing there has been no fundamental changes to its operating activities during the prior comparable period.
The Warehouse store numbers were updated quarter to reflect only currently trading stores, resulting in the reduction of one store.
The Warehouse Group Limited
Supplementary Information
First quarter sales
Change in
sales
Change in
same store
sales
Store
extension/
reduction
The WarehouseNoel LeemingWarehouse StationeryTorpedo7
Store footprint
(Square Metres)
The WarehouseNoel LeemingWarehouse StationeryTorpedo7
The Warehouse
Warehouse Stationery
Noel Leeming
Torpedo7
Store changes during the quarter
New
store
Replacement
store
Store
closure