The Warehouse Group FY26 Annual Results

1



NZX | Media release – 30 September 2026
The Warehouse Group reports strong profit growth in FY26
Summary for the 52 weeks ended 2 August 2026:
• Reported sales were $3.0 billion, down 1.9% on a 53-week FY25, up 0.4% on a
comparative 52-week same-store basis
1

• Group gross profit margin up 40 basis points to 32.6%
• Cost of doing business reduced by $29.8 million to 31.8% of sales, an improvement
of 40 basis points
• Operating profit
2
(EBIT pre-NZ-IFRS 16) increased to $22.6 million from $1.3 million
in FY25
• Reported net profit after tax increased to $11.2 million from $2.8 million net loss after
tax in FY25
• Operating cash flow improved by $121.2 million to $193.5 million, capital expenditure
increased to $21.1 million from $12.4 million in FY25 with investment primarily
directed to stores
• Net debt reduced to $17.0 million from $96.1 million in FY25
• No final dividend has been declared for FY26
The Warehouse Group today announced a strong recovery in profitability, with comparable
store sales holding broadly steady despite continued pressure on discretionary spending.
Gross margin improved and costs reduced as a proportion of sales, while stronger cash flow
supported increased investment in store upgrades and foundations for future growth.
Chair John Journee said the result demonstrates that the actions taken to date are delivering
results.
"Despite a difficult retail environment, The Warehouse Group made meaningful progress
during the year. Sales were steady on a comparable basis, profitability improved, and the
business finished the year in a much stronger position.
“Importantly, this progress was driven by actions taken within the business rather than an
improvement in market conditions, creating a stronger foundation for the next stage of our
recovery. While the Board is pleased with the progress made, materially improving
profitability remains our primary ambition."

1
FY25 was a 53-week financial year ending 3 August 2025, compared to 52 weeks in FY26. Same-store sales
removes the 53rd week of FY25, excludes online, NLG Commercial, and the impact of opening and closing of
stores during the reported and comparable year.
2
Operating Profit (EBIT pre-IFRS16) excludes the impact of NZ IFRS16 and unusual items and is a non-GAAP
measure.

2

Group sales were $3.0 billion, down 1.9% on the prior year which included an additional
week of trading. Sales increased 0.4% on a comparative 52-week same-store basis.
Consumer confidence fluctuated throughout the year. Confidence improved through the first
half as interest rates eased, signalling a possible recovery. However, international conflict,
higher fuel prices and renewed pressure on household budgets weighed on consumer
sentiment later in the year. Customers remained value conscious with average selling prices
down 1.4%. Across the brands, customers spent more per visit and purchased more items,
with average basket value up 0.5% and units sold up 1.8%.
Group gross profit margin increased 40 basis points to 32.6%, while cost of doing business
reduced 40 basis points to 31.8% of sales. It was the first year since FY21 that gross margin
improved while costs reduced as a percentage of sales.
Margin growth was supported by stronger buying and retailing discipline, improved ranges,
tighter inventory management and a higher proportion of full-price sales. Combined with
sustained cost discipline, this delivered an operating profit of $22.6 million, up from $1.3
million in the prior year. Margin recovery accelerated through the second half across all three
brands.
Group Chief Executive Officer Mark Stirton said, "This result shows that the internal changes
we're making are starting to get traction. Warehouse Stationery and Noel Leeming delivered
strong profit growth, and The Warehouse finished the year in much better shape than it
started.
"Our teams have worked incredibly hard through another year of significant change. We're
buying better, managing inventory more effectively, improving our ranges and pricing, and
running the business with greater discipline. At the same time, we're investing again in
stores, the brand, customer experience and growth. We've made a good start, but our
ambitions are much bigger, especially for The Warehouse where we’re determined to earn
back our place as New Zealanders' first choice retailer."
Store development
The Group balanced cost reductions with selective investments in retail experience
upgrades that support customers and growth. Capital expenditure increased to $21.1 million
from $12.4 million in the prior year.
The Warehouse stores are receiving upgrades to lighting, flooring and racking, alongside
new displays and visual merchandising in homewares, apparel and beauty.
In FY26 the Group returned to expanding its store footprint. Warehouse Stationery opened in
Wellington Central and Noel Leeming relocated its Palmerston North store. Since August
2026, Warehouse Stationery has opened in Whitianga and Noel Leeming has opened its
Auckland Central flagship store. In late 2027, the Group will open The Warehouse and Noel
Leeming stores in Mangawhai.
“We are investing selectively in better presentation, more relevant and exciting stores, and
new locations because we can see opportunities to grow all of our brands and serve more
customers," said Mark Stirton.

3

Brand performance
The Warehouse
The Warehouse made progress during the year, particularly in the second half. Sales were
$1,774.9 million, down 2.3% on the reported 53-week FY25. Sales increased 0.6% on a
comparative 52-week same-store basis. Online sales represented 4.4% of sales, compared
with 4.6% in FY25, and actions to improve the profitability of online sales resulted in
meaningfully stronger operating margins versus the prior year.
Gross profit margin was 20 basis points below FY25 but recovered through the second half,
with fourth-quarter margin finishing strongly ahead of the prior year. After the allocation of
support office costs, the brand reported an operating loss of $7.5 million, an improvement of
$4.7 million on the prior year's operating loss of $12.2 million.
“At The Warehouse, we are improving the style, quality and presentation of our ranges,
particularly in homewares and apparel. These categories represent 50% of revenue and
were key contributors to the brand’s improved second-half margin performance, with more
apparel sold at full price during the year and margins improved across homewares,” said
Mark Stirton.
Beauty sales increased 5.2% on a comparable 52-week basis as customers responded to
broader ranges and improved in-store presentation. The Warehouse remained New
Zealand's preferred toy retailer for a second consecutive year, with record toy sales. The
Warehouse simplified its grocery range to pantry staples and everyday essentials, resulting
in improved category performance.
“Grocery is an important reason customers choose to shop with us regularly. Rather than
expanding the range, we’re concentrating on the staples customers buy most often and
where we can offer the best value, like bread, eggs, coffee and olive oil. A simpler range
allows us to deliver lower prices and a more reliable top-up shop for our customers.”
“This year, we undertook an extensive review of our customer segments, providing valuable
insights into what matters most and how best to reach them. Our new brand platform, This Is
Warehouse Country, marks the next phase for The Warehouse, building on what New
Zealanders have loved since 1982 while refreshing the offer and experience for modern
families.”
Warehouse Stationery
Warehouse Stationery delivered a strong result, returning to sales growth and nearly
doubling operating profit.
Sales increased 0.7% to $227.6 million against a 53-week FY25, while 52-week same-store
sales increased 2.0%. Online sales represented 7.1% of sales, broadly in line with the prior
year. Operating profit increased to $15.9 million from $8.2 million in the prior year.
Disciplined pricing and stock management supported gross profit growth across every
category, with margin strengthening through the second half.
Growth was supported by strong performances across Warehouse Stationery’s key
categories. Print & Create sales increased 13.8% on a comparable 52-week basis, Art &
Craft sales increased 6.7%, and Office Furniture sales increased 5.5%.

4

“Warehouse Stationery’s result shows there is still significant growth opportunity in a well-
established brand. We are serving more schools, strengthening our position with small
businesses and seeing strong demand across creative categories, while operating the
business more effectively,” said Mark Stirton.
Noel Leeming
Noel Leeming made the largest contribution to the Group's earnings recovery.
Sales were $1,017.4 million, down 2.0% on the reported 53-week FY25. On a comparable
52-week basis, same-store sales were down 0.5% while total sales (including on-line)
decreased 0.2%. Online sales increased to 13.1% of sales from 11.3% in the prior year.
Noel Leeming maintained pricing discipline in a highly competitive market and delivered
margin growth across both halves. Operating profit increased to $21.8 million from $11.7
million in the prior year.
Appliances delivered the strongest growth during the year, with sales increasing 11.2% on a
52-week basis, led by whiteware and small appliances. Cellular sales increased 4.7% and
Computers & Storage increased 10.6%, supported by new brands and customer demand
linked to the Windows 10 and 3G transitions. Services, including delivery, installation and
Tech Solutions, grew 10.1% during the year.
“In an extremely competitive market, Noel Leeming remained disciplined and responsive to
pricing and promotional activity, while still delivering a strong result. Looking ahead, we see
opportunities to grow market share through an expanded store and product offer as New
Zealand’s leading locally owned technology and appliances retailer,” said Mark Stirton.
Balance sheet
Buying and planning improved progressively in priority categories over the year, reducing
inventory to $438.8 million from $476.7 million and aged inventory to 21.8% from 23.1%.
Stock turn increased to 4.7 times from 4.6 times. Lower inventory levels and improved stock
movement supported stronger working capital performance and cash generation.
The Group generated free cash flow of $79.4 million, compared with an outflow of $45.2
million in the prior year. Net debt reduced by $79.1 million to $17.0 million.
Dividend
No final dividend has been declared for FY26. The Board's immediate priority is to rebuild
sustainable earnings while retaining financial flexibility.
Outlook
Sales in the first eight weeks of FY27 were broadly in line with the prior year, while margin
performance was ahead of the prior comparable period.
“With consumer confidence and economic growth subdued, retail conditions are expected to
remain challenging. We can't control those factors, so we're concentrating on improving the
areas within our control and delivering a better result regardless of market conditions.

5

“Improving performance at The Warehouse remains the Group's biggest priority. We will
achieve that by delivering better value and a better customer experience through more
relevant ranges, better pricing, better stock management and lower costs,” said Mark Stirton.
Ends
For media queries please contact: For investor queries please contact:
Lizzie Havercroft
General Manager Corporate Affairs
+64 27 507 0613
lizzie.havercroft@twgroup.co.nz
Mark O’Malley
Head of Strategy
+64 27 301 5936
mark.omalley@twgroup.co.nz

The Warehouse Group Limited
26 The Warehouse Way, Northcote, Auckland 0627

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2026
Annual Results
52 WEEKS ENDING ​2 AUGUST 2026​
1

2
Contents
1.Chair Update - John Journee
2.CEO Update - Mark Stirton
3.Financial Performance - Stefan Knight
4.The Year Ahead - Mark Stirton
5.Thank You - John Journee
6.Appendix - Additional Information
2

3
Chair Update
John Journee
Chair

The Board’s perspective
●FY26 was the first full year under the brand-led operating model and demonstrated that the reset could deliver in a difficult consumer environment. Operating
profit recovered to $22.6m from $1.3m, driven by actions within the business rather than an improvement in market conditions
●Gross margin increased while the cost of doing business reduced, rebuilding operating leverage. Strong cash generation enabled the Group to reduce net debt by
$79.1m while increasing investment in its store network​
●Noel Leeming and Warehouse Stationery delivered stronger returns. The Warehouse also improved, but remains below an acceptable level of profitability, and its
recovery is the Group’s most important priority
●No final dividend has been declared for FY26. The Board’s immediate priority is to rebuild sustainable earnings while retaining financial flexibility. The Board
recognises the importance of dividends to shareholders and remains committed to returning to paying dividends in the future
4
Progress against the reset plan
CHAIR UPDATE
$3,027.6m
32.6%31.8%$22.6m$79.4m$17.0m
(1.9%) on a 53-week FY25
(0.2%) on a comparable 52 week
1
+0.4% same store sales
2
+40 bps on FY25
6
-40 bps on FY25
6
vs $1.3m in FY25vs ($45.2m) in FY25from $96.1m in FY25
GROUP SALESGROSS MARGINCODB
3
OPERATING PROFIT
4
FREE CASH FLOW
5
NET DEBT
1.Comparable 52 week removes the 53rd week of FY25​
2.Same store sales removes the 53rd week of FY25, excludes online, NLG Commercial, and the impact of opening and closing of stores during the reported and comparable year​
3.Cost of Doing Business (CODB) excludes the impact of NZ IFRS 16, unusual items, and is a non-GAAP measure​
4.Operating Profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure. For a reconciliation between Operating Profit and Reported EBIT, refer to Slide 31 of this presentation and Note 2.0 of the financial statements​
5.Free cash flow is calculated as Operating cash flow less capital expenditure and lease principal payments​
6.Basis point movements are based on percentages rounded to the nearest 10bps and are so throughout the presentation

5
CEO Update
Mark Stirton
Group CEO

Consumer confidence improved through the first half of FY26 before falling due to international conflict and recovered towards the end of the financial
year. Despite the weaker environment, Group earnings improved
6
The market we traded through
MACROECONOMIC CONTEXT
C O N S U M E R C O N F I D E N C E T H R O U G H F Y 2 6 · A N Z-R O Y M O R G A N , M O N T H L Y
What it meant for our customers
●Higher prices put further pressure on household budgets and
discretionary spending​
●Real incomes declined, unemployment increased, and the first
OCR increase in three years added further pressure late in the year​
●Customers shopped less often and focused more on value​
●Customers bought more items, but at slightly lower average prices​
●Lower foot traffic was partly offset by larger baskets and broadly
stable conversion​
5.6%4.1%
Highest since
September 2015
Two-year high,
June qtr
UNEMPLOYMENT
1
INFLATION
1
+1.7%
Growth remains
subdued
ANNUAL GDP GROWTH
1
G R O U P M E T R I C S
2
F Y 2 6 V F Y 2 5
+1.8%
UNITS
-1.4%
ASP
-0.2%
FOOT TRAFFIC
+0.5%
BASKET SIZE
1.Source:https://www.stats.govt.nz (unemployment; June 2026 update, inflation; annual as at June quarter, GDP growth; annual as at June quarter)​
2.Group metrics shown have all been calculated on a 52-week same store sales basis, which removes the 53rd week of FY25, excludes online, NLG Commercial, and the impact of opening and closing of stores during
the reported and comparable year​

Margin and cost discipline lifted earnings, while inventory management improved cash conversion ​
7
FY26 began to restore operating leverage and strengthened the balance sheet​
GROUP PERFORMANCE
1.Operating Profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure. For a reconciliation between Operating Profit and Reported EBIT, refer to Slide 31 of this
presentation and Note 2.0 of the financial statements.​
2.Cost of Doing Business (CODB) excludes the impact of NZ IFRS 16, unusual items, and is a non-GAAP measure​
3.Free cash flow is calculated as Operating cash flow less capital expenditure and lease principal payments​
4.Basis point movements are based on percentages rounded to the nearest 10bps and are so throughout the presentation
P R O F I T R E C O V E R YO P E R A T I N G L E V E R A G EB A L A N C E S H E E T
$22.6m
32.6%31.8%
GROSS MARGINCODB / SALES
OPERATING PROFIT
+$21.3m
year-on-year improvement
Profit improved on broadly flat
comparable sales
+40 bps
4
Margin and cost as % of sales
improved together
FIRST TIME SINCE FY21
-40 bps
4
The two levers are rebuilding
operating leverage
$79.4m$17.0m
FREE CASH FLOWNET DEBT
Net debt reduced by $79.1m
Cash conversion strengthened
financial flexibility and supported
investment in-store​
Lower inventory supported the
improvement
The financial platform is now more resilient, yet profitability still sits well below our ambitions​

8
How we went against what we said we would do
1
GROUP PERFORMANCE
1.As set out in the FY25 Annual Results investor presentation — Looking ahead. ​
2.Cost of Doing Business (CODB) excludes the impact of NZ IFRS 16, unusual items, and is a non-GAAP measure
MET
Overhead reductions​
PARTIALLY MET
Gross margin recovery​
NOT MET
The Warehouse margin recovery​
MET
Working capital unlocks​
MET
Disciplined capital investment​
MET
Retail-led strategy​
$29.8m CODB
2
reduction; support office costs down 8.8%​
Group margin increased 40bps, led by the second half. Two out of three brands showed full year growth​
Exited Q4 ahead, but full-year margin remained below FY25 with deeper clearance of aged inventory​
$22.9m working-capital inflow; inventory down $37.9m​
$21.1m in capital expenditure, reweighted toward stores and supply chain
Retail-led strategy and execution priorities are set and in action

9
Rebuilding retail fundamentals​
RETAIL FUNDAMENTALS
1.Same store sales removes the 53rd week of FY25, excludes online, NLG Commercial, and the impact of opening and closing of stores during the reported and comparable year​
In FY26 we strengthened how we choose product, move it through the network and convert customer demand, with early evidence visible in
lower inventory, better gross margin and store execution. However, we recognise there is further work to be done.
PLAN & BUYMOVESELL
Better sell-through, margin discipline
and inventory productivity​ in key
departments
Getting product to customers at lower costStores, brand and conversion
CAPABILITIES BUILT
Grocery simplified as a value-led top-up offer
supporting broader shopping missions​
Buying and planning reset for all three brands,
with stricter stock investment criteria​
Ranges, price points and sourcing
strengthened in priority categories while
ensuring we maintain value on key items​
CAPABILITIES BUILT
Dedicated supply chain leadership and a new
freight partner​ with improved capabilities
Independent review of integrated supply chain
highlighting opportunities, several changes
now underway
Streamlined online distribution to improve
service to customers, partnered with DoorDash
and reduced cost to serve online
CAPABILITIES BUILT
This Is Warehouse Country refreshed the
brand platform​
Store investment across all three brands and
visual merchandising uplift​
New formats developed to broaden
customer appeal ​
FUTURE
UNLOCKS
AN EARLY EVIDENCE POINT​
−$37.9m​
GROUP INVENTORY
Lower cost to serve, faster flow,
improved availability and a
scalable network​
FUTURE
UNLOCKS
AN EARLY EVIDENCE POINT​
4.7x
GROUP STOCK TURN
(FY25: 4.6x)
Improving foot-traffic, higher
conversion, stronger baskets and
better store economics​
FUTURE
UNLOCKS
AN EARLY EVIDENCE POINT​
+0.4%​
GROUP SAME-STORE
SALES
1
What we sell and what it costs​

10
Focus is moving from flat sales to sustainable revenue growth​
REVENUE GROWTH
FY26 comparable sales were broadly flat. Our focus is to turn stronger retail fundamentals into sustainable revenue growth and gain back share​.
BRAND-LED GROWTH​
Clear routes to growth for each brand​
THE WAREHOUSEWAREHOUSE STATIONERYNOEL LEEMING
Leverage brand platform and
reappraisal to drive foot-traffic
Strengthen product relevance,
ranges and value
Invest in stores and build local
relevance based on customer
segmentation
Grow business & education​
Expand Print & Create,
personalisation and services​
Reach more customers through
new formats, new stores and
improved online channels
Win share in priority categories
and younger customer groups​
Differentiate through expert
service and solutions
Grow national store network, roll-
out interactive store concepts and
accelerate online
Focus on growth categories,
including Health & Beauty

11
People, communities and environment​
ESG
FY26 progress across our team, communities and environmental impact​
$1.9m​
contributed to New Zealand
charities and communities
Award Winner
The Good Drop won the Spark Retail NZ
2026 Awards KNAPP Sustainability
Leadership Award​
90%​
of electricity matched with electricity
produced by Lodestone Energy's solar
farms (FY25: 63%)
74%
Scope 1 and 2 market-based
emissions change compared to
FY23 base year (FY25: 45%)
28.3
Per million hours
worked (FY25: 30.2)
25 eNPS
1
Group eNPS (FY25: 36)
284
Post consumer waste collected
for reuse or recycling
79%
of operational waste diverted
from landfill (FY25: 79%)
492
Tier 1 factory ethical
assessments completed in
FY26
reduction
tonnes
EMISSIONSTRIFR
(Total recorded injury frequency rate)​
TEAM ENGAGEMENT
CIRCULARITYOPERATIONAL WASTEETHICAL SOURCING
1.eNPS (employee Net Promoter Score) in FY25 excludes DC team members as these were not surveyed in FY25

12

13
Financial
Performance
Stefan Knight
Group CFO

Operating profit improved by $21.3m on broadly flat comparable sales, as higher gross margin and lower operating costs rebuilt operating leverage
FINANCIAL PERFORMANCE
1.Comparable 52 week removes the 53
rd
week of FY25
2.Same store sales removes the 53rd week of FY25, excludes online, NLG Commercial, and the impact of opening and closing of stores during the reported and comparable year
3.Operating Profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure. For a reconciliation between Operating Profit and Reported EBIT, refer to Slide 31 of this presentation
and Note 2.0 of the financial statements
4.Adjusted NPAT is before continuing operations before unusual items and is a non-GAAP measure. For a reconciliation between Adjusted and Statutory NPAT, refer to slide 31
5.Reported NPAT is attributable to shareholders and is adjusted for minority interests
Year in Review
•Operating profit increased to $22.6m from $1.3m,
driven by improved margin and cost discipline in a
challenging consumer environment
•Gross margin increased 40bps to 32.6%, with a
90bps second-half improvement led by
Warehouse Stationery and Noel Leeming and
supported by The Warehouse’s recovery in Q4
•Cost of doing business reduced by $29.8m, or 3.0%,
and improved 40bps to 31.8% of sales, led by lower
support office, IT and depreciation costs
•Both levers, margin and cost, moved the right way
in the same year — the first time since FY21
•The seasonal second-half loss narrowed to $4.3m
from $18.2m, contributing $13.9m of the Group’s
$21.3m full-year earnings improvement
$ million
FY26
52 weeks
FY25
53 weeks
Var
Sales revenue3,027.63,086.7(1.9%)
Gross profit986.6995.1(0.9%)
Gross margin %32.6%32.2%+40 bps
Cost of doing business964.0993.8(3.0%)
CODB % of sales31.8%32.2%(40) bps
Operating profit³22.61.3+$21.3m
Operating margin %0.7%0.0%+70 bps
Adjusted NPAT⁴13.5(4.5)+$18.0m
Reported NPAT
5
11.2(2.8)+$14.0m
Dividend declared---
REPORTED REVENUE
$3,027.6m
COMPARABLE 52 WEEKS
1
(0.2%)
SAME-STORE SALES²
+0.4%
Group financial performance
14

GROUP GROSS PROFIT MARGIN · % OF SALES
THE WAREHOUSE , GP % BY QUARTER · STRONG FINISH IN RED
Group
•Group gross profit margin increased 40bps to 32.6%, with the full-year
improvement delivered through a 90bps uplift in the second half
•The Warehouse was the primary driver, as first-half clearance activity gave
way to stronger underlying trading margins in the fourth quarter
•Noel Leeming and Warehouse Stationery also delivered improved margin
performance through the year, supporting a broader-based Group recovery
The Warehouse
•First-half margin reflected the clearance of aged inventory from prior years, with the impact
reducing as the year progressed
•Fourth-quarter margin increased to 36.9% led by Home and Apparel
•The Warehouse exited FY26 with cleaner inventory, improved trading mechanics and
refreshed ranges heading into FY27
•We seek further opportunity for margin expansion as fundamental retail capability is restored
and new ranges support more full price sales
H1 (20)bps · H2 +90bps
Full year 32.6% vs 32.2% +40bps
Gross margin overview
Group gross profit margin increased 40bps to 32.6%, driven by an improved second-half from all three brands and a strong fourth-quarter contribution
from The Warehouse
15
FINANCIAL PERFORMANCE

1.Operating profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure. For a reconciliation between Operating Profit and Reported EBIT, refer to Slide 31 of this
presentation and Note 2.0 of the financial statements
2.Cost of Doing Business (CODB) excludes the impact of NZ IFRS 16, unusual items, and is a non-GAAP measure
GROSS PROFIT MARGIN AND COST OF DOING BUSINESS² · % OF SALES
Overview
•Gross margin increased to 32.6%, while the cost of doing
business reduced to 31.8% of sales
•This lifted operating profit to $22.6m and operating margin to
0.7%
•At the Group’s current sales base, every 10bps of operating
margin represents approximately $3m of operating profit¹
•All three brands contributed to the second-half improvement:
Warehouse Stationery maintained its stronger performance,
Noel Leeming continued to improve margin, and The
Warehouse recovered strongly in Q4
•Improvement occurred alongside inventory discipline, with
Group inventory reducing by $37.9m and aged inventory also
declining by 130 bps
16
Operating leverage returns for the first time since FY21
FINANCIAL PERFORMANCE
Gross margin improved and the cost of doing business reduced in FY26, lifting operating margin
0.7%
FY25:0.0% - a 70bps improvement
FY26 OPERATING MARGIN

The cost reset programme
•Cost of doing business
1
reduced by $29.8m, reflecting delivery of the cost reset programme and
the additional trading week in FY25
•CODB
1
improved by 40bps to 31.8% of sales, making a material contribution to the Group’s
profitability uplift
•Employee expenses reduced by $6.9m, with savings from the support office restructure and TCS
partnership partly offset by higher store and distribution centre wages primarily driven by wage
inflation
•Employee expenses also benefited from one-off savings arising from the timing of the TCS
implementation
•IT costs reduced by $12.6m, driven by lower support charges and more disciplined project
activity
•Further benefits came from lower SaaS and advertising costs
•Depreciation and amortisation reduced by $9.1m as earlier system and previous store
investment programmes continued to amortise and capital expenditure was tightly managed
1.Cost of Doing Business (CODB) excludes the impact of NZIFRS 16, unusual items, and is a non-GAAP measure
2.Approximately $4m of FY25 Brand and SSO comparatives have been reclassified to align with FY26 and future allocation basis
As % of sales
32.6%
32.2%
31.8%
CODB
1
BY ALLOCATION $ MILLION
FY26
52 weeks
FY25
2
53 weeks
Variance
Brand costs683.8682.5+0.2%
Support office costs226.2248.1(8.8%)
Depreciation & amortisation54.063.2(14.5%)
Total cost of doing business964.0993.8(3.0%)
CODB BY CATEGORY $ MILLION
CODB Overview
17
FINANCIAL PERFORMANCE

1.Comparable 52 week removes the 53rd week of FY25
2.Same store sales removes the 53rd week of FY25, excludes online, and the impact of opening and closing of stores during the reported and comparable year
3.Foot traffic and basket size are calculated on a 52 week same store basis
4.Operating Profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure
5.Sales density is calculated on a 52-week basis
The Warehouse reduced its operating loss in FY26, supported by a stronger
second half. The immediate aim is to return the brand to profitability
Performance
•Same-store sales increased as customers bought more items, partly offset by lower
average prices in a value conscious market
•Gross margin improved in the second half and exited the year ahead of FY25, with the
strongest improvement in Q4
•Home and Apparel led the margin recovery, reinforcing the importance of these higher
margin categories to The Warehouse’s earnings
•Lower foot traffic was offset by better conversion and larger baskets, with customers
making fewer but more valuable visits
•Online sales remain an area of opportunity. New offers, including The Warehouse Club and
DoorDash, supported customer engagement, while stronger online margins more than
offset lower sales
FY26
52 weeks
FY25
53 weeks
Var
Sales ($ m)1,774.91,816.5(2.3%)
Operating profit / (loss) ($ m)(7.5)(12.2)+$4.7m
Operating margin (0.4%)(0.7%)+30 bps
Online sales ($ m)78.683.2(5.5%)
Online penetration4.4%4.6%(20) bps
Stores (#)8484—
Sales density
5
($/sqm)3,9013,870+0.8%
18
The Warehouse
BRAND PERFORMANCE
SAME-STORE SALES²
+0.6%
BASKET SIZE³
+0.8%
OPERATING PROFIT⁴ / (LOSS)
$(7.5)m
Improved by $4.7m, with most of the
improvement in the second half
UNITS +1.7% | ASP (1.0%)
$1,774.9m
VS COMPARABLE 52
WEEKS
1
(0.7%)
SALES
FOOT TRAFFIC (0.3%)

Home and Apparel margins improving
Home and Apparel are important to The Warehouse’s profitability, representing nearly half of sales and including some of its highest-margin
categories. Margins improved in both areas through better buying, stronger ranges and improved execution
Behind the improvement: stronger buying and planning discipline, rebuilt ranges and price points
Next: continue strengthening ranges, full-price sell-through and margin delivery across Home and Apparel
HOME AND APPAREL · CASH GROSS MARGIN %, FY22–FY26
Up in both
FY26
Apparel
Home
WHAT DROVE FY26
APPAREL
✓
More full-price sales — supported by better sell-through
✓
Better margins – across full-price and clearance sales
✓
Broad-based improvement: led by Womenswear, with Menswear and
Kidswear also ahead
HOME
✓
Aged inventory reduced—margins improved even though we cleared more
stock
✓
Home Textiles led the improvement, with Home Furnishings, Seasonal
Home and Seasonal Appliances also ahead
→
Gardening and Storage volumes increased, but at lower margins
19
BRAND PERFORMANCE - THE WAREHOUSE

FY26
52 weeks
FY25
53 weeks
Var
Sales ($ m)227.6226.0+0.7%
Operating profit / (loss) ($ m)15.98.2+$7.7m
Operating margin 7.0%3.6%+340 bps
Online sales ($ m)16.215.8+2.5%
Online penetration7.1%7.0%+10 bps
Stores (#)6766+1
Sales density
5
($/sqm)4,3414,297+1.0%
1.Comparable 52 week removes the 53rd week of FY25
2.Same store sales removes the 53rd week of FY25, excludes online, and the impact of opening and closing of stores during the reported and comparable year
3.Foot traffic is calculated on a 52 week same store basis
4.Operating Profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure
5.Sales density is calculated on a 52-week basis
Warehouse Stationery returned to sales growth and nearly doubled operating
profit, supported by stronger margins and disciplined cost and stock management
Performance
•Sales returned to growth with both standalone stores and the 42 stores within The Warehouse
contributing
•Operating profit increased $7.7m to $15.9m, with operating margin improving to 7.0%
•Growth was led by Print & Create, Art & Craft and Office Furniture
•Print & Create benefited from growth in digital printing, copying and personalised products. Art
& Craft and Office Furniture also grew, supported by stronger ranges
•Disciplined pricing and stock management supported gross profit growth across all categories
along with improved range
•One store opened in Wellington Central during FY26, followed by Whitianga at the start of FY27
20
Warehouse Stationery
BRAND PERFORMANCE
SAME-STORE SALES²
+2.0%
FOOT TRAFFIC³
+0.2%
Conversion improved too
OPERATING PROFIT⁴ / (LOSS)
$15.9m
Up 94% on FY25 operating profit of
$8.2m
UNITS +3.4% | ASP (1.3%)
$227.6m
VS COMPARABLE 52
WEEKS
1
+2.5%
SALES

Profit up $10.1m on flat comparable sales. Noel Leeming ran a better business in
FY26 and is now investing to grow it
Performance
•Comparable sales were broadly flat, with non-repeatable commercial sales in the prior year being offset by
underlying growth in the retail business
•Operating profit increased by $10.1m to $21.8m, with operating margin improving to 2.1%
•Appliances and core technology led growth, supported by commercial wins, new brands and the Windows 10
and 3G transitions
•Intense competitor pricing in audio-visual and computing weighed on sales, with Noel Leeming maintaining
pricing discipline to protect margin and gain share where product and service are a difference
•Online grew strongly and now accounts for around one dollar in eight of the brand’s sales
•Investment in the store network continues, with Queen Street opened in September 2026 and Mangawhai
planned for late 2027
•Looking ahead we are focused on returning to top line growth and maintaining market share. We will do this by
capitalising on our scale advantage and continuing to make service a clear point of difference for customers
21
Noel Leeming
BRAND PERFORMANCE
SAME-STORE SALES²
(0.5%)
ONLINE SALES GROWTH³
+13.2%
Improved on-line traffic and conversion
OPERATING PROFIT⁴ / (LOSS)
$21.8m
Up $10.1m on FY25
UNITS (3.9%) | ASP +3.6% | FOOT TRAFFIC
3
(0.5%)
$1,017.4m
VS COMPARABLE 52
WEEKS
1
(0.2%)
SALES
$ million
FY26
52 weeks
FY25
53 weeks
Var
Sales ($ m)1,017.41,038.1(2.0%)
Operating profit ($ m)21.811.7+$10.1m
Operating margin2.1%1.1%+100 bps
Online sales
5
($ m)133.0117.5+13.2%
Online penetration13.1%11.3%+180 bps
Stores (#)6666—
Sales density
6
($/sqm)12,73412,724+0.1%
1.Comparable 52 week removes the 53rd week of FY25
2.Same store sales removes the 53rd week of FY25, excludes online, and the impact of opening and closing of stores during the reported and comparable year
3.Foot traffic is calculated on a 52 week same store basis
4.Operating Profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure
5.Online sales in FY25 was stated as $108.7 million. This has been re-stated to $117.5 million in this presentation recognising a reclassification of commercial online sales
6.Sales density is calculated on a 52-week basis

($96.1m)
Opening
net debt
+$193.5m
Operating
cash flow
($19.4m)
Capital
expenditure
2
($94.7m)
Lease
payments
($0.3m)
Other¹
($17.0m)
Closing
net debt
Free cash flow
1
: $79.4m
FREE CASH FLOW
$79.4m
A $124.6m improvement from FY25
AVERAGE DAILY BORROWINGS
-45% reduction
Against FY25 daily average
BANK INTEREST COST
$2.7m
Reduced 60% on lower debt levels
WHAT IT SAYS
•Operating cash flow improved by $121.2m to $193.5m, supported by
stronger trading performance and improved working capital. FY25 was
impacted by an extra week of negative net cash-flow
•Free cash flow increased to $79.4m from an outflow of $45.2m in FY25,
after capital expenditure and lease payments
•Capital expenditure increased 54% to $19.4m as investment shifted
towards stores, while net debt reduced by $79.1m to $17.0m
•The Group remains compliant with all banking covenants and has access
to available facilities to meet its needs
1.Free cash flow is calculated as Operating cash flow less capital expenditure and lease principal payments
2.The difference between cash flow capital expenditure of $19.4 million above and capital expenditure of $21.1m on the Project expenditure
slide and in Note 9.1 and Note 9.2 of the financial statements is due to timing of accruals and creditor payments
22
Cash flow and net debt
GROUP PERFORMANCE
Strong operating cash flow funded increased capital investment and reduced net debt by $79.1m to $17.0m

Closing inventory declined by $37.9m, reflecting lower aged stock and faster Group stock turn, while further improvement remains a priority
CLOSING INVENTORY · $ MILLION
562.3
FY22
493.3
FY23
472.1
FY24
476.7
FY25
438.8
FY26
−$37.9m
vs FY25
$438.8m
CLOSING INVENTORY
FY25 $476.7m
21.8%
AGED INVENTORY
1
FY25 23.1%
4.7x
GROUP STOCK TURN
FY25 4.6x
INVENTORY BY BRAND · $ MILLION
The Warehouse +
Warehouse Stationery
FY25
345.8
FY26
309.2
−10.6%
Noel Leeming
FY25
131.0
FY26
129.6
−1.0%
PRUDENT PROVISIONING
$18.9m
inventory provisions
4.7% of inventory cost, up
from 3.7%
COMMENTARY
Lower inventory was driven primarily by The Warehouse and Warehouse Stationery, including a $19.7m reduction in goods in transit.
Aged inventory reduced to 21.8% from 23.1%, while provisions increased to address selected aged, slow-moving and end-of-life stock.
The reset supports stronger stock flow and working-capital discipline, while clearance plans remain actively managed.
1.Aged inventory calculated as stock over six months old
23
Inventory improvements strengthened the balance sheet
GROUP PERFORMANCE

Project expenditure
TOTAL PROJECT EXPENDITURE
1
$27.8m
FY25: $21.0m
CAPITAL EXPENDITURE
$21.1m
76% of project spend
PROJECT EXPENDITURE BY CATEGORY · $ MILLION
$ millionFY26FY25
Store development, operations & property13.07.3
Information systems10.113.1
Digital3.30.1
Supply chain1.40.5
Total project expenditure27.821.0
of which capital expenditure21.112.4
of which SaaS & project opex6.78.6
WHAT IT SAYS
•Total project expenditure increased $6.8m to $27.8m, with the investment
mix shifting toward capital expenditure
•Capital expenditure increased $8.7m to $21.1m, primarily reflecting higher
investment in store development, operations and property. Digital and supply
chain capital investment also increased
•Key investments include fit-out of new stores and relocations, improved LED
lighting and HVAC in stores and in-store digital screen deployment
•SaaS and project opex reduced $1.9m to $6.7m. The reduction was
concentrated in information systems, partly offset by higher digital and
supply chain project opex
1.Total project expenditure includes capital expenditure, prepayments, SaaS expenditure and project operating expenditure
24
GROUP PERFORMANCE
Investment lifted in capital expenditure led by stores, operations and property
Store development,
operations & property
Information
systems
Digital
Supply chain
FY26
FY26 capitalFY26 SaaS & opex
FY25
FY25 capitalFY25 SaaS & opex

25
Mark Stirton
Group CEO
The Year Ahead

The year ahead
TRADING UPDATE
Trading in the first eight weeks of FY27: Group sales were broadly in line with the prior year, with
margin performance ahead of the prior comparable period
ENVIRONMENT
The retail environment remains challenging, with cautious consumer spending and continued
volatility. We will remain focused on the factors within our control
THE WAREHOUSE
Margin recovery at The Warehouse remains our most important earnings priority, while
continuing to deliver value for our customers. This will be supported by continued improvements
in product ranges, pricing, merchandise planning and inventory management
DISCIPLINE
Cost, capital and working-capital discipline will continue, alongside further work to strengthen
sourcing, supply-chain performance and inventory productivity across the Group
BRAND AND STORE
GROWTH
We will invest selectively to grow each of our retail brands, strengthening The Warehouse
customer proposition, growing Noel Leeming and Warehouse Stationery, and investing in new and
existing stores where we see attractive returns.
INVESTOR DAY
The launch of This Is Warehouse Country marks the next phase of The Warehouse’s recovery,
with our longer-term retail-led strategy and pathway to stronger, more sustainable returns to be
presented at Investor Day in November
2026 ANNUAL RESULTS
26

Building
exceptional
retail brands
27

28
Appendix
29 Sales summary
30 Quarterly sales by brand
31 EBIT and NPAT reconciliation
32 Investor metrics
33 Disclaimer
28

$ million
The
Warehouse
Warehouse
Stationery
Noel
Leeming
Group
FY26 reported sales (52 weeks)1,774.9227.61,017.43,027.6
FY25 reported sales (53 weeks)1,816.5226.01,038.13,086.7
FY26 growth on reported FY25(2.3%)+0.7%(2.0%)(1.9%)
FY25 sales on a 52-week basis1,787.7222.01,019.03,034.8
FY26 growth on 52-week FY25(0.7%)+2.5%(0.2%)(0.2%)
FY26 same-store sales growth (52 weeks)+0.6%+2.0%(0.5%)+0.4%
FY26 H1 sales (26 weeks)949.5116.1542.21,612.1
FY25 H1 sales (26 weeks)944.7109.8548.91,607.2
H1 growth+0.5%+5.7%(1.2%)+0.3%
FY26 H2 sales (26 weeks)825.4111.5475.21,415.5
FY25 H2 sales (27 weeks, as reported)871.8116.2489.21,479.5
H2 growth on reported FY25(5.3%)(4.0%)(2.9%)(4.3%)
H2 growth on 26 comparable weeks(2.1%)(0.6%)+1.1%(0.9%)
29
Sales summary
APPENDIX

$ millionQ1Q2Q3Q4FY
Q4 on 13
comparable wks
The Warehouse — FY26389.0560.5405.3420.11,774.9
— FY25386.3558.4415.9455.91,816.5
— growth+0.7%+0.4%(2.5%)(7.9%)(2.3%)(1.6%)
Warehouse Stationery — FY2652.263.957.154.4227.6
— FY2550.958.958.857.4226.0
— growth+2.6%+8.5%(2.9%)(5.2%)+0.7%+1.9%
Noel Leeming — FY26230.7311.5236.6238.61,017.4
— FY25229.1319.8234.9254.31,038.1
— growth+0.7%(2.6%)+0.7%(6.2%)(2.0%)+1.4%
Group (incl. Other) — FY26674.1938.0700.8714.73,027.6
— FY25668.0939.2710.5769.03,086.7
— growth+0.9%(0.1%)(1.4%)(7.1%)(1.9%)(0.3%)
30
Quarterly sales by brand
FY26 versus FY25 as reported. The 53rd week fell in the FY25 fourth quarter; a 13-week comparison is shown for Q4.
APPENDIX

Operating ProfitNPAT
2
$ millionFY26FY25FY26FY25
Reported earnings56.640.511.2(2.8)Statutory
Restructuring costs5.7—4.3—Head office redundancies
Adjustments for NZ IFRS 16
1
(39.7)(39.2)(2.0)(1.7)Lease accounting
Adjusted earnings22.61.313.5(4.5)Non-GAAP
RESTRUCTURING
•Restructuring costs of $5.7m before tax relate to head-office redundancies
arising from the cost reset programme and TCS partnership
NZ IFRS 16
•Operating Profit excludes NZ IFRS 16 to maintain comparability with historical
performance and common market practice. The FY26 adjustment was $39.7m
at EBIT and $2.0m at NPAT
1.Refer to Note 2.2 of the Financial Statements for further details on the NZ IFRS 16 adjustment
2.Adjusted NPAT is from continuing operations before unusual items and is a non-GAAP measure. A reconciliation between Adjusted and Statutory NPAT is located in Note 5.0 of the financial statements.
31
EBIT and NPAT reconciliation
For the 52 weeks ended 2 August 2026
APPENDIX

FY26FY25
Returns
Return on equity
1
3.8%(0.8%)
Return on net operating assets
2
3.6%3.0%
Dividend payout ratio——
Cash generation
Free cash flow
3
$79.4m$(45.2)m
Cash conversion ratio
4
1.29x(0.50)x
Stock turn (times)4.74.6
Gearing
Net debt$17.0m$96.1m
Gearing (net debt over net debt plus equity)5.2%24.3%
Profitability
Gross profit margin32.6%32.2%
CODB as a percentage of sales31.8%32.2%
Operating profit margin0.7%0.0%
1.Return on Equity is calculated as Net Profit from Continuing Operations After Tax / average Shareholder Equity
2.Return on Net Operating Assets is calculated as Net Operating Profit After Tax (excluding interest) / average Net Operating Assets
3.Free cash flow is calculated as Operating cash flow less capital expenditure and lease principal payments
4.Cash conversion is calculated as Operating cash flow / EBITDA on a pre-IFRS 16 basis
32
Investor metrics
APPENDIX
32

This presentation may contain forward looking statements and projections. There can
be no certainty of the outcome and projections involve known and unknown risks,
uncertainties, assumptions and other important factors that could cause the actual
outcomes to be materially different from the events or results expressed or implied by
such statements and projections.
While all reasonable care has been taken in the preparation of this presentation, The
Warehouse Group Limited does not make any representation, assurance or guarantees
as to the accuracy or completeness of any information in this presentation. The forward-
looking statements and projections in this report reflect views held at the date of this
presentation.
Except as required by applicable law or any applicable Listing Rules, the Relevant
Persons disclaim any obligation or undertaking to update any information in this
presentation.
A number of non-GAAP financial measures are used in this presentation. You should not
consider any of these in isolation from, or as a substitute for, the information provided in
the financial statements for the 52 weeks ended 2 August 2026, which are available at
www.thewarehousegroup.co.nz.
This presentation does not constitute investment advice, or an inducement,
recommendation or offer to buy or sell any securities in The Warehouse Group Limited.
33
Disclaimer

---

2026
Annual Report
THE WAREHOUSE GROUP

32
The Warehouse Group Annual Report 2026
Table of Contents
2026 at a Glance 4
Chair’s Report 6
CEO’s Report 8
Financial Review 12
Purpose, Ambition and Values 16
Integrated Report 18
Risk Management 20
Our Stores and Supply Chain 24
Our Brands 26
Financial Statements 32
Independent Auditor’s Report 52
Governance Report 58
Statutory Disclosures 76
Directory 83
The Warehouse Group Board and Executive Leadership
Team are pleased to present our FY26 Integrated Annual
Report.
John Journee
Chair
30 September 2026
Dean Hamilton
Audit and Risk Committee Chair
30 September 2026

54
The Warehouse Group Annual Report 20262026 at a Glance
2026 at a Glance
Our impact
Group performance
Cost of doing
business % of sales
2
52-week same-
store sales
1
FY25: 32.2%
Market-based (compared
to FY23 base year)
0.4%
31.8%
Group sales
Group operating profit
3
FY25: $1.3m
$3.0b
$22.6m
Group gross
profit margin
32.6%
contributed to
NZ charities and
communities
in FY26
$1.9m
eNPS
(FY25: 36.0pts)
25.0pts
74%
1. Same-store sales removes the 53rd week of FY25, excludes online, NLG Commercial, and the impact of opening and closing of stores
during the reported and comparable year.
2. Cost of doing business (CODB) excludes the impact of NZ IFRS 16, unusual items, and is a non-GAAP measure.
3. Operating profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure.
Reduction in
scope 1 & 2
emissions
Down 1.9% on a
53-week FY25
FY25: 32.2%
54
The Warehouse Group Annual Report 20262026 at a Glance

It has been another challenging year for
New Zealand consumers. There were
early signs that consumer confidence was
beginning to improve around summer,
before international conflict created
renewed uncertainty and increased pressure
on fuel, freight, inflation and global supply
chains.
Despite this backdrop, the Group
delivered improved performance. Sales
remained steady on a comparable basis,
and operating profit materially improved
on FY25, supported by disciplined cost
management, margin expansion, and
operational improvements across the
business. While these are positive indicators
of the turnaround underway, there is
still significant work ahead to restore
sustainable returns for shareholders.
The Board is pleased with the progress
made during FY26. Margin improvement
initiatives gained traction in Noel Leeming
and Warehouse Stationery, and positive
signs emerged in The Warehouse during the
fourth quarter. However, the turnaround of
The Warehouse remains critical to improving
overall Group performance.
Throughout FY26, the Board supported the
business through considerable change and
uncertainty. This included the turnaround
initiatives, cost reset programme,
responding to the impacts of geopolitical
disruption and rising fuel and freight costs,
and initiating the strategic partnership with
Tata Consultancy Services. The Board has
supported management in creating a clear
brand focused retail-led strategy.
We welcomed Hamish Rumbold to
the Board in November 2025. Hamish
has brought valuable governance and
commercial experience that further
strengthens the Board. Also in November
2025, Dame Joan Withers and Robbie
Tindall retired from the Board. On behalf of
the Board, we sincerely thank Dame Joan
Chair’s
Report
John Journee | Chair
The Board is pleased with
the progress made during
FY26, with improvement
initiatives gaining
traction.
and Robbie for their longstanding and valuable
contributions and service to The Warehouse
Group.
FY26 marked Mark Stirton’s first full year as
Group Chief Executive Officer, and he has
wasted no time getting stuck into the work
at hand. Mark and his leadership team have
brought focus, passion, pace and discipline
to the business. They have aligned on a
clear strategic direction, acted decisively,
strengthened execution and rallied the
organisation around its customers and
brands. I thank them for their leadership and
commitment.
The Board has carefully considered the
payment of a dividend for FY26.
While performance improved during the
year, the Board has decided not to declare a
final dividend for FY26. Our priority remains
restoring financial performance and ensuring
the Group can continue investing in the actions
required to support the turnaround. The
Board retains its intention to resume dividend
payments in the future.
Looking ahead, the Group continues to
take decisive action. We will maintain cost
and capital discipline, strengthen retail
fundamentals, improve customer experience
and implement a retail strategy that builds
brand equity and delivers sustainable returns.
Economic recovery in New Zealand continues
to be slow, consumers remain cautious with
their spending, with market conditions likely
to remain challenging in the near term. The
Group’s path forward will take time, however
the Board is confident in the calibre of
management, the direction being taken, the
actions underway and the progress being
made.
This is my first Annual Report as Chair of The
Warehouse Group, and I would like to thank
Dame Joan for her guidance during my
transition to the role and my fellow directors
for their support during the year. Having served
on the Board and in executive roles across the
business, including as Interim Group Chief
Executive Officer, it is a privilege to continue
serving this iconic New Zealand business as we
work to restore its performance and realise its
potential.
Finally, a heartfelt thank you to our leadership
team and our team members across New
Zealand. Over the past year, they have
continued to serve customers, adapt to
significant change and support one another
through a demanding period, all while making
steady progress.
To our shareholders, thank you for your ongoing
support. We know there is more work to
do, and we remain determined to improve
performance.
Ngā mihi,
John Journee
Chair
76
The Warehouse Group Annual Report 2026Chair’s Report

CEO’s
Report
Mark Stirton | Group CEO
FY26 was a year of progress for The
Warehouse Group and the first full financial
year of a brand-led operating model.
The Group focused on what it could control
to improve performance and store experience
in a tough environment where customers
remained cautious in a volatile economy.
Financial performance improved, costs were
reduced and the work to strengthen retail
fundamentals began to show through across
the business. These are positive signs, but
profitability remains below our ambitions
and there is much more work ahead.
Financial performance
The Group delivered sales of $3.0 billion,
down 1.9% on FY25 and up 0.4% on a
52-week same-store sales basis.
Group gross profit margin was 32.6%, an
improvement of 40 basis points. Noel Leeming
and Warehouse Stationery delivered solid margin
growth through the year. The Warehouse’s
margin was broadly flat for the full year and
improved in the second half, supported by
more full-price sales and margin growth
in the key areas of Home and Apparel.
Group operating profit increased to $22.6
million, compared with $1.3 million in FY25. This
improvement reflected gross margin growth and
sustained cost discipline across the Group.
All three brands contributed to the improvement
in profitability. Warehouse Stationery nearly
doubled profit and Noel Leeming made the largest
contribution to the Group’s earnings recovery.
The Warehouse reduced its operating loss from
FY25 and ended the year in a better position.
In November 2025 the Group announced a
cost reset programme and its intention to
reduce cost of doing business to below 31%
of sales. Group cost of doing business was
$964.0 million, or 31.8% of sales, compared
with 32.2% in FY25. This was achieved
by reducing Store Support Office costs
and simplifying the operating model.
The balance sheet was rebuilt during FY26,
with $79.4 million of free cash flow generated
and net debt reduced to $17.0 million from
$96.1 million in FY25. Inventory was $438.8
million, down 7.9%, with improved stock health,
better stock turn and lower aged inventory.
The majority of remaining aged inventory is
made up of everyday continuity products that
continue to have ongoing sales demand.
Although an important improvement on FY25,
our performance is not yet at an acceptable
level of return. Further margin recovery at
The Warehouse, continued cost discipline
and stronger inventory performance remain
critical to lifting Group profitability.
Strengthening the retail
fundamentals
The Group has made headway
strengthening the retail fundamentals
required to improve performance.
As signalled at the end of the first half, the
Group began work to improve supply chain
performance. An independent review identified
significant opportunities to improve product
availability and reduce cost to serve. Changes
are underway to unlock trapped value.
The Group’s partnership with Tata Consultancy
Services is helping simplify our technology
and managed services, reduce costs and
provide access to digital and AI capability.
At The Warehouse, work to improve
merchandise planning, ranging and inventory
management began to show through in
the second half, particularly in our priority
categories Home and Apparel. While there is
more work to do, the second half provided early
signs that these changes are gaining traction.
The Warehouse completed significant customer
segmentation during the year. Built on real
spending data, behavioural insights and
research, this work has created a much clearer
understanding of our customers and will
shape future decisions across merchandise,
marketing, stores and customer experience.
Progress has been made,
but our ambitions are
much bigger.
9
CEO’s Report
8
The Warehouse Group Annual Report 2026

11
Investing in our stores
Cost reduction has been balanced with
selective investment in areas that support
customers, margin and growth.
Noel Leeming has returned to central Auckland
with a new flagship store designed around
modern, experience-led retail. Noel Leeming
also relocated its Palmerston North store.
Warehouse Stationery opened a standalone
store in Wellington Central and began
FY27 opening a new store in Whitianga.
Investment in The Warehouse continues across
store presentation, from lifting the basics like
lighting, racking and flooring, to stronger visual
merchandising of higher-margin categories
including Home, Apparel and Health & Beauty.

Leadership and capability
In FY26 we intentionally rebuilt the
Executive Leadership Team to support
the turnaround. These changes reflect
the areas most important to improving
performance and support clearer priorities.
Carrie Fairley was permanently appointed Chief
Merchandise Officer, with sourcing brought
under merchandise to create end-to-end
ownership of our product ranges. Lyle Brady was
appointed Group Chief Supply Chain Officer and
Deric Fairley appointed Acting Chief Planning
Officer. Frankie Coulter joined the business as
Chief Marketing Officer for The Warehouse and
Warehouse Stationery, and Ankit Gupta was
appointed Group Chief Data and AI Officer.
Looking ahead to FY27
The Group enters FY27 with clear priorities.
Cost and capital discipline will continue
alongside improvements in merchandise
planning, inventory management and
supply chain performance. Margin recovery
at The Warehouse remains central,
supported by continued investment in
product, stores and customer experience.
The brand relaunch This Is Warehouse Country
at the start of FY27 marks an important next
phase for The Warehouse and our ambition to
be New Zealand’s number one retailer again.
It reflects our confidence in the strength of
the brand and the opportunity ahead of us.
Over the past year, we have asked a great deal
of our people. Teams have worked through
significant change, and I thank our team
members for their commitment and the pride
they bring to serving customers every day.
I thank our Chair, John Journee and the Board
for their support as we have strengthened
the business and developed our strategy.
To our customers, thank you for continuing to
choose us. To our shareholders, thank you for
your patience and support. Progress has been
made, but our ambitions are much bigger.
Ngā mihi,
Mark Stirton
Group Chief Executive Officer
10
The Warehouse Group Annual Report 2026

Financial performance
FY26 was a standard 52-week financial year ending
2 August 2026, compared with a 53-week financial
year in FY25. Revenue commentary is shown on
both a reported basis and a comparable 52-week or
52-week same-store basis. Unless stated otherwise,
all commentary compares FY26 with the reported
53-week FY25 result.
Sales revenue
Against a backdrop of cautious consumer
sentiment, group sales were $3,027.6 million, down
1.9% on FY25.
The prior year included an additional trading week
worth $51.9 million of sales, which accounted for
most of the reported decline. On a comparable
52-week basis, group sales were broadly flat, down
0.2%, while same-store sales increased 0.4%.
Financial
Review
Customers remained value conscious
throughout the year. Across the Group,
customers bought more items at lower average
prices. Customers consolidated their shopping
trips: although store traffic eased by 0.2%,
customers purchased more on each visit,
lifting average basket value, while conversion
remained stable.
Online sales represented 7.5% of sales, up from
7.0% in FY25, with Noel Leeming making the
largest contribution to growth.
Gross profit margin
Group gross profit margin increased 40 basis
points to 32.6%, with Noel Leeming and
Warehouse Stationery ahead for the full year
and all three brands ahead in the second half.
Margin recovery accelerated in the second half,
with gross profit margin increasing 90 basis
points compared with the prior corresponding
period.
Noel Leeming and Warehouse Stationery
delivered solid margin growth through the year.
The Warehouse’s full-year margin was 20 basis
points below FY25, but it recovered through
the second half and finished the fourth quarter
strongly and ahead of the prior year.
Gross profit was $986.6 million compared with
$995.1 million in FY25. The difference reflects
the additional trading week included in FY25.
Cost of doing business
Cost of doing business reduced by $29.8 million
to $964.0 million and fell to 31.8% of sales from
32.2% in FY25. The result reflects the Group’s
cost reset programme and the additional
trading week included in FY25.
Employee costs were $6.9 million lower, with
savings from the support office restructure
partly offset by higher wages across stores and
distribution centres.
IT costs reduced by $12.6 million through lower
support charges and better control of project
spending. Depreciation and amortisation
reduced by $9.1 million as earlier technology
and previous store investment programmes
became fully depreciated or amortised.
Operating profit
FY26 was the first year since FY21 that the
Group lifted gross margin while reducing cost
of doing business as a percentage of sales,
contributing to operating profit increasing to
$22.6 million from $1.3 million in FY25.
The first half of the year focused on reducing
costs. The second half delivered stronger
margins, generating around two-thirds of the
full-year increase in operating profit.
All three brands contributed to the increase
in operating profit. Noel Leeming made the
largest contribution to the Group’s earnings
recovery, with operating profit increasing
to $21.8 million from $11.7 million in FY25.
Warehouse Stationery nearly doubled
operating profit to $15.9 million from $8.2
million, while The Warehouse reduced its
operating loss to $7.5 million from $12.2 million
in FY25.
Group operating profit
1
Cost of doing business as
a percentage of sales
2
Group gross profit margin
Operating margin
(FY25: $1.3m)
(FY25: 32.2%)
(FY25: 32.2%)
(FY25: 0.0%)
+$21.3m year-on-year
improvement
-40 basis points year-on-year
+40 basis points year-on-year
+0.7 percentage points
year-on-year
$22.6m
31.8%
32.6%
0.7%
1. Operating profit (EBIT pre-IFRS 16) excludes the impact of NZ IFRS 16 and unusual items and is a non-GAAP measure.
2. Cost of doing business (CODB) excludes the impact of NZ IFRS 16, unusual items, and is a non-GAAP measure.
1312
The Warehouse Group Annual Report 2026Financial Review

Net profit
Adjusted net profit after tax
3
was $13.5
million, compared with a loss of $4.5 million
in FY25. Reported net profit after tax was
$11.2 million, compared with a loss of $2.8
million in FY25. Adjusted net profit after tax
excludes restructuring costs of $5.7 million
($4.3 million after tax) relating to the support
office restructure and Tata Consulting Services
partnership, and the effect of NZ IFRS 16; a
reconciliation is provided in note 5 to the
financial statements.
Brand performance
The Warehouse
The Warehouse made meaningful progress
during FY26, particularly in the second half of
the year.
Sales were $1,774.9 million, down 2.3% on FY25.
Sales increased 0.6% on a comparative 52-week
same-store basis. Customers purchased more
items at lower average prices in a highly value-
conscious market. Online sales represented
4.4% of sales, compared with 4.6% in FY25.
Gross margin for the full year was 20 basis
points below FY25 but recovered through the
second half and finished the fourth quarter
strongly and ahead of the prior year with the
recovery led by Home and Apparel. These
categories are central to The Warehouse’s
profitability, and in both, cash gross margin
improved through stronger trading execution
rather than changes in sales mix.
The operating loss reduced to $7.5 million
from $12.2 million in FY25, with most of the
improvement occurring in the second half.
Warehouse Stationery
FY26 was a standout year for Warehouse
Stationery. Sales returned to growth, operating
profit nearly doubled, and the brand recorded
the highest operating margin in the Group.
Sales were $227.6 million, up 0.7% on FY25.
Sales increased 2.0% on a comparative 52-week
same-store basis. Growth was driven by
both standalone stores and stores operating
within The Warehouse network. Online sales
represented 7.1% of sales, broadly in line with
FY25.
Margin performance strengthened through
the second half. Disciplined pricing and stock
management supported gross profit growth
across every category, contributing to operating
profit increasing to $15.9 million from $8.2
million in FY25.
Noel Leeming
Noel Leeming made the largest contribution
to the Group’s earnings recovery during FY26.
Operating profit increased significantly despite
continuing competitive pressure across key
technology categories.
Sales were $1,017.4 million, down 2.0% on FY25.
On a comparable 52-week basis, sales declined
0.2%, reflecting non-repeatable commercial
sales in the prior year. Excluding commercial
sales, the retail business grew. Same-store
sales declined 0.5% as customers made fewer
but larger purchases. Online sales grew and
represented 13.1% of sales, up from 11.3% in
FY25.
Noel Leeming maintained pricing discipline,
with margin growth across both halves
supported by higher average selling prices.
Appliances was the brand’s strongest category
this year and made a positive contribution to
margin growth. Together, these factors helped
lift operating profit to $21.8 million from $11.7
million in FY25.
Balance sheet
The balance sheet was significantly stronger at
the end of FY26 than a year earlier, reflecting
stronger cash generation, lower inventory and
reduced debt.
Operating cash flow increased to $193.5 million
from $72.3 million in FY25. Operating cash flow
is stated after interest on leases but before
lease principal payments of $94.7 million,
which are included in financing activities.
Free cash flow increased to $79.4 million
from an outflow of $45.2 million after capital
expenditure and lease payments.
Working capital reduced by $22.9 million
during the year, driven by a $37.9 million
reduction in inventory, partly offset by lower
trade payables. Bank interest paid was $2.7
million compared with $6.7 million in FY25, a
60% reduction, while lease principal payments
reduced to $94.7 million from $104.9 million.
Inventory reduced to $438.8 million from $476.7
million in FY25. Aged inventory reduced to
21.8% from 23.1%, while stock turn improved
to 4.7 times from 4.6 times. The reduction
was driven primarily by The Warehouse and
Warehouse Stationery and included lower
goods in transit holdings.
Net debt decreased to $17.0 million from $96.1
million in FY25, with average daily borrowings
reducing by 45%. The Group met all debt
covenant obligations throughout the year.
Project expenditure increased to $27.8 million
from $21.0 million in FY25, while capital
expenditure increased to $21.1 million from
$12.4 million. Investment was directed towards
stores, operations, property, digital and
supply chain initiatives, reflecting a shift from
major systems investment to improving and
expanding the store network.
Free cash flow
Capital
expenditure
Net debt
Closing inventory
(FY25: $(45.2)m)
(FY25: $12.4m)
(FY25: $96.1m)
(FY25: $476.7m)
+$124.6m year-on-year
improvement
-$79.1m year-on-year reduction
-$37.9m year-on-year
reduction
$79.4m
$21.1m
$17.0m
$438.8m
3. Adjusted NPAT is from continuing operations before unusual items and is a non-GAAP measure.
1514
The Warehouse Group Annual Report 2026Financial Review

Purpose, Ambition
and Values
Ambition
Values
Be a highly desired retail stock
Think Customer • Do Good • Own it
Purpose
To build exceptional retail brands that
customers love, our team takes pride in, and
deliver sustainable shareholder returns
1716
The Warehouse Group Annual Report 2026Purpose, Ambition and Values

1918
The Warehouse Group Annual Report 2026Integrated Report
Integrated
Report
Integrated Report
Welcome to The Warehouse Group’s 2026 Integrated Annual Report.
This report explains how our resources contributed to value creation in FY26 through our retail
value creation model and purpose. We describe this through six capitals: Financial Capital,
Our Store and Distribution Network, Our Brand and Customers, Human Capital, Social and
Relationship Capital, and Our Environment.
Delivering the
best products and
services in store
and online
SERVICING
CUSTOMERS
STORE DEVELOPMENT
AND OPERATIONS
RANGE AND
ASSORTMENT BUILD
SOURCE AND
PROCUREMENT
CUSTOMER
UNDERSTANDING
TRANSPORT, LOGISTICS
AND DISTRIBUTION
Property optimisation,
space and visual
merchandising
Products the
customers want at
the right price
Finding great
products from a range
of trusted suppliers
We know our
customers best
Getting products to
stores and customers
efficiently
O
u
r

C
u
l
t
u
r
e
O
u
r

S
y
s
t
e
m
s
O
u
r

P
r
o
c
e
s
s
e
s
O
u
r

B
r
a
n
d
s
C
o
m
m
u
n
i
t
i
e
s
,

S
h
a
r
e
h
o
l
d
e
r
s
C
u
s
t
o
m
e
r
s
,

T
e
a
m

M
e
m
b
e
r
s
,

S
u
p
p
l
i
e
r
s
TO BUILD
EXCEPTIONAL
RETAIL BRANDS
Financial Capital
Ensure financial resilience, free
cash flow and available liquidity to
implement strategy and provide a
sustainable return to shareholders.
Our Store and Distribution
Network
Ensure we have the right products,
at the right price, in the right place,
at the right time for our customers.
Our Brand and Customers
Build a world-class customer retail
experience, enabled by our portfolio
of brands.
Human Capital
Foster connection, inclusion &
impact; empower all team members
to thrive; and ensure everyone gets
home safe at the end of the day.
Social and Relationship
Capital
Support the communities in which
we serve and ensure the basic
human and labour rights of workers
in our supply chain are respected.
Our Environment
Improve the sustainability of our
products; provide solutions to reduce
post-consumer waste, and improve
the sustainable performance of our
operations.
InputsRetail value creation
Financial
Capital
Our Store and
Distribution
Network
Our Brand and
Customers
Human Capital
Social and
Relationship
Capital
Our
Environment
$193.5m
Operating
cash flow
(FY25: $72.3m)
217
Stores
(FY25: 216)
$1.9m
Raised for NZ
charities and
communities
77.6
NPS
(FY25: 79.7)
66%
Private label
sales with
sustainable
packaging
(FY25: 66%)
25.0pts
eNPS
(FY25: 36.0pts)
$79.4m
Free cash flow
(FY25: $(45.2)m)
21.8%
Aged inventory
(FY25: 23.1%)
7.5%
Online sales
(FY25: 7.0%)
74%
Reduction in scope
1 & 2 emissions
(market-based)
compared to FY23 base
year
0%
Median gender
pay gap
(FY25: 0%)
TRIFR (Total
Recorded Injury
Frequency Rate)
28.3
(FY25: 30.2)
(FY25: 283 tonnes)
$209.2m
Trading EBITDA
(FY25: $197.0m)
4.7x
Stock turn
(FY25: 4.6x)
492284 tonnes
Factory ethical
assessments
Of post-consumer
waste collected for
reuse or recycling
+0.4%
52-week same-
store sales
79%
Operational
waste from
landfill
(FY25: 79%)
per million hours worked
Together, these capitals underpin long-term
value for our customers, team members,
suppliers, communities and shareholders.
Materiality within our six capitals differs from
the financial materiality applied to our financial
statements. It reflects the areas that were
most important to improving, influencing or
protecting outcomes during FY26, guided by
our strategy, risk appetite and performance
objectives.
Materiality changes over time as our
circumstances, progress and priorities evolve.
This report focuses on the matters that were
most material to long-term value creation in
FY26. It is not intended to cover every aspect of
our performance, but rather the areas where
we focused our efforts to improve outcomes,
manage risks and create value for our
stakeholders.
FY26 Outcomes

2120
The Warehouse Group Annual Report 2026Risk Management
The Group’s risk management framework has
been designed to identify, assess, control, and
monitor its key risks. The identification and
ongoing management of these key risks assists
the business in achieving its objectives.

The Group recognises four main categories of
risk:

Strategic risk – risks that could affect the
Group’s long-term direction, business model,
competitive position, or ability to deliver its
value proposition to customers.
Financial risk – risks that could affect the
Group’s financial strength, including its ability
to manage debt, liquidity, funding, market
exposures, capital investment, and other
financial obligations.
Operational risk – risks arising from the
day-to-day operation of the Group, including
people, health and safety, legal and regulatory
compliance, technology, data, cybersecurity,
business continuity, and internal processes
and controls.

Business risk – risks arising from operating
in the retail market, including changes in
customer demand, consumer behaviour,
product relevance, pricing and margin
decisions, supply chain performance, and the
effectiveness of the Group’s retail channels
and propositions.

Risk
Management
Risk management framework
Responsibility for risk management sits with
the Group’s Leadership Team, assisted by
specialised risk functions and other functional
teams within the Group.

Rapid change and increased technological
innovation within the retail sector provide
challenges for the Group to compete effectively.
To remain resilient in the Group’s constantly
evolving environment, the Leadership Team
promotes a proactive and decentralised
approach to risk management. Team members
at all levels are empowered and expected to
take ownership of risk in the work they do and
the decisions they make. This includes adhering
to Group-wide policies and procedures,
identifying emerging risks, escalating
concerns where necessary, and implementing
appropriate mitigations.

Key enterprise risks are addressed through
tailored mitigation strategies embedded across
strategic planning, financial management,
operational execution, and business processes.
These mitigation strategies may include
accepting certain risks where appropriate,
avoiding exposure where possible, reducing
risk through internal controls and process
improvements, sharing risk through
partnerships or insurance, or transferring risk
via contractual arrangements. All risk responses
are designed to align with the Group’s appetite
for risk, ensuring that risk-taking supports
long-term value creation while protecting
the interests of shareholders and other
stakeholders.

Key enterprise risks
The Group’s assessment of its key enterprise
risks has been undertaken using a Dynamic Risk
Assessment approach. In addition to evaluating
risks’ inherent and residual likelihoods and
impacts, Dynamic Risk Assessment considers
both the interconnectedness and velocity of
risks to better understand their contagion
consequences. Those factors, along with the
indicated proximity of a given risk, help the
Group prioritise responses to high-impact
active and emerging risks.

The Group’s Dynamic Risk Assessment
identified its:

Most influential risks – those enterprise risks
that have the most effect on other risks when
they occur.
Most cumulative risks – those enterprise risks
that are most affected by the occurrence of
other risks.
Most expected risk scenarios – clusters of
enterprise risks with strong links that cause
their effects to aggregate. Clusters allow other
less influential risks to have a greater effect.

The Group’s top key enterprise risks are
summarised in the adjacent table.

2322
The Warehouse Group Annual Report 2026Risk Management
Key Enterprise Risks
RiskCategory
Inherent
Risk
Primary Mitigation Strategies
Residual
Risk
Leadership
Strategic Very High A consistent enterprise-wide leadership framework,
targeted development pathways, coaching, mentoring,
leadership assessment and talent review processes.
Medium
Business and
brand proposition
Strategic Very High Activities that connect clearly defined brand propositions
to our markets and customers, coupled with measurement
and reporting to monitor effectiveness.
Medium
Competitive
threats
Strategic Very High Market share tracking using independent card-spend data,
with sustained movements reviewed by management and
the Board and reflected in category, pricing and network
decisions.
High
Culture
Strategic High Aligned performance practices, targeted engagement and
wellbeing initiatives, and culture activation programmes
that strengthen connection, accountability and
performance outcomes.
Medium
Customer
targeting
Strategic High Defined customer segments, growth segment strategies,
and segmentation review activities that maintain
customer clarity and tactical relevance.
Medium
Socio-economic
Strategic High Ownership of a portfolio of different businesses with
different value propositions in different retail markets,
including adopting an Everyday Low Price architecture
within The Warehouse.
Medium
Profit margins
and costs
Financial Very High Margin discipline, demand-aligned inventory buying, cash
and margin monitoring, centralised cost governance, and
defined intervention triggers.
High
Process and
systems
Operational Very High A comprehensive operational governance and oversight
framework, architecture and technology standards, and
initiatives aligned with target-state architecture and
strategic objectives.
High
Talent and
capability
Operational High Strategic workforce planning, succession and talent
management, market-responsive reward and employee
value proposition strategies, and leadership, capability and
culture programmes.
High
Cybersecurity
Operational High Proactive threat detection and response, continuous
security monitoring, security awareness training, identity
and data protection, and ongoing evolution of controls
and tools to address current and emerging threats.
Medium
Health and safety
Operational High A health safety and welfare framework that includes
robust risk management practices, assurance
programmes, critical risk controls, and a centralised
approach to injury management and recovery.
Low
Product offering
BusinessVery High Dedicated buyers and planners operating within
a structured merchandise governance framework,
supported by category strategies, range reviews, supplier
oversight, and performance monitoring.
High
Supply chain and
global instability
Business Very High Multi-source strategies, structured supplier management
processes, freight contractor and lane diversification,
proactive disruption management, and network
management.
High
In-store
experience
Business High Investment in store environment enhancements, customer
experience improvements, merchandising innovation,
and store format development to improve customer
engagement, relevance and ease of shopping.
Medium
Merchandise
agility
BusinessHigh Fit for purpose merchandising processes and systems that
support timely responses to market trends and demand
changes, targeted clearance and promotional activity, and
ongoing monitoring of stock performance.
Medium

2524
The Warehouse Group Annual Report 2026Risk Management
Our Stores and
Supply Chain
8
6
MATAMATA
BELL BLOCK
NP CENTRAL
TAURANGA
MT MAUNGANUI
FRASER COVE
THE CROSSING
PĀPĀMOA
CAMBRIDGE
TE AWAMUTU
TOKOROA
TE KUITI
ROTORUA
LEVIN
PARAPARAUMU
RANGIORA
OAMARU
ALEXANDRA
DUNEDIN
ASHBURTON
BLENHEIM
KAITĀIA
KAIKOHE
DARGAVILLE
WAIPAPA
KERIKERI
WHANGĀREI
WHAKATĀNE
WARKWORTH
GISBORNE
TAUPŌ
HASTINGS
MASTERTON
DANNEVIRKE
UPPER HUTT
INVERCARGILL
GORE
BALCLUTHA
TIMARU
QUEENSTOWN
WĀNAKA
NAPIER
HAWERA
PALMERSTON NORTH
WHANGANUI
FEILDING
NELSON
RICHMOND
GREYMOUTH
MOTUEKA
WHITIANGA
THAMES
MORRINSVILLE
CHRISTCHURCH
14
WELLINGTON
14
AUCKLAND
54
HAMILTON
12
MAP KEY
The Warehouse Store
Warehouse Stationery Store
SWAS Store
Noel Leeming Store
ONLINE STORES
Warehouse Stationery
Noel Leeming
The Warehouse
PHYSICAL STORES
84
67
66
217 stores
2 distribution centres
The Warehouse stores
Warehouse Stationery stores
including 42 SWAS
(store-within-a-store)
Noel Leeming stores
Our stores and supply chain
The Warehouse Group operates some of New
Zealand’s best-known retail brands and one
of the country’s largest retail footprints, with
217 stores across The Warehouse, Warehouse
Stationery and Noel Leeming, supported
by two large-scale distribution centres and
international sourcing hubs.
With 85% of New Zealanders within a
20-minute drive of one of our stores, our
nationwide reach is a key strength that
helps us serve customers and communities
throughout New Zealand.
Investing in store experience
and footprint
FY26 marked a return to selective investment in
the in-store experience and footprint growth.
Warehouse Stationery opened a new store in
Wellington Central during the year, increasing
its network to 67 stores. The brand expanded
further with a new store opening in Whitianga
at the beginning of FY27.
Noel Leeming opened a new store in
Palmerston North, relocating to a more
modern site. The brand announced its return to
Auckland’s Queen Street with a new concept
store format that opened in September 2026.
In March, the Group announced plans for new
The Warehouse and Noel Leeming stores in
Mangawhai, scheduled to open in late-2027.
At The Warehouse, investment focused on
improving the in-store experience. Priority
stores are receiving upgrades to lighting,
flooring and racking, alongside improvements
to visual merchandising in Home, Apparel and
Health & Beauty. These categories are a key part
of margin recovery and improving performance
at The Warehouse.
Work is underway on a future The Warehouse
flagship store concept to help shape the next
phase of store investment.
Improving supply chain
performance
Having the right product, on the right shelf, at
the right time is critical to delivering value for
customers.
As signalled at the end of the first half, the
Group is undertaking a broad programme of
work to improve cost to serve and product
availability across the supply chain.
In FY26, the Group established a dedicated
supply chain role on the Executive Leadership
Team to bring greater accountability for the
end-to-end movement of products across the
business.
During the year, the Group undertook an
independent review of inventory flow and
operating processes. The review highlighted
significant opportunities to improve supply
chain performance and several changes are
now underway.
These include changing international freight
partners to improve visibility and control
across inbound freight and simplify the flow
of containers into New Zealand. The Group is
continuing to optimise RELEX, its forecasting
and replenishment platform introduced in
FY25.
Early progress can be seen in lower
inventory levels and improved working
capital performance. However, significant
opportunities remain and improving supply
chain performance will continue to be a
priority.
International sourcing
The Warehouse Group maintains sourcing hubs
in China, Bangladesh and India, supporting
the development and supply of private-label
products across its retail brands.
These hubs work closely with suppliers on
product development, quality and production,
providing visibility across the supply chain and
supporting ethical sourcing standards. Their
local expertise helps the Group deliver quality
products, value and reliability for customers.
Global freight management
Global freight markets remained volatile
throughout the year. Higher fuel costs,
geopolitical instability and pressure across key
shipping routes created uncertainty across
international supply chains.
The Group continues to work closely with
suppliers and logistics partners as conditions
evolve, to maintain product availability and
manage disruption and cost.
Distribution Centre

2726
The Warehouse Group Annual Report 2026Our Brands | The Warehouse
Our
Brands
For 44 years, The
Warehouse has
helped make the
desirable affordable
for all New
Zealanders.
The Warehouse recorded sales
of $1,774.9 million in FY26,
down 2.3% on FY25, which
included an additional trading
week. Sales increased 0.6% on
a comparative 52-week same-
store basis.
In FY26, economic recovery
remained slow and higher
fuel prices continued to
impact household budgets
and shopping habits. On a
comparable 52-week basis
store traffic declined slightly
by 0.3% during the year as
customers shopped with
more intention, with units sold
increasing 1.7% and basket
value increasing 0.8%.
The Warehouse’s operating
margin improved 30 basis
points for the full year, with
category gains led by Home
and Apparel. Stronger
product ranges supported
more full-price sales and less
clearance activity, reducing
the operating loss from $12.2
million in FY25 to $7.5 million
in FY26.
On a 52-week basis Apparel
returned to growth with sales
increasing 0.4%, driven by
growth in children’s essentials,
seasonal womenswear and
footwear, and men’s essentials.
Beauty gained significant
momentum at The Warehouse
in FY26, with sales increasing
5.2% as customers responded
to broader ranges and better
presentation in stores.
Toys delivered another record-
breaking year, with sales up
3.2% and units sold up 5.7%.
The Warehouse remains
New Zealand’s number one
preferred toy retailer for a
second year in a row.
Work began on a future
flagship store approach, while
selective store investment
focused on getting the basics
right, including lighting,
flooring and racking upgrades
in priority locations, alongside
improvements to visual
merchandising in Home,
Apparel and Health & Beauty.
More family fun and
experiences were brought
back into stores during the
year, from the return of
children’s shopping trolleys
and much-loved mascots The
Warehouse Kiwi and Allie the
Alien, to Santa in larger stores
at Christmas.
In-store Net Promoter Score
was 71.3, down 2.6 points from
FY25, showing there is more to
do to make The Warehouse a
more exciting and easier place
to shop.
In March, plans were
announced for a new store
in Mangawhai, opening in
late-2027. Now a fast-growing,
year-round community,
Mangawhai will become home
to the first new The Warehouse
store since Wānaka opened in
2023.
The website and app
remained important sources
of inspiration. Online sales
represented 4.4% of sales,
down from 4.6% in FY25. The
website recorded 54 million
visits and The Warehouse
app had around 440,000
downloads during the year.
In June, The Warehouse
partnered with DoorDash to
make thousands of products
available on the platform for
same-day delivery.
In FY26, focus shifted to The
Warehouse brand. A customer
segmentation review used
spending data and research to
identify opportunities to grow,
protect and regain share. Paid
media investment was paused
while channel effectiveness
was reviewed and a longer-
term brand strategy
developed, leading to the
launch of This Is Warehouse
Country at the beginning
of FY27. The new platform
celebrates The Warehouse’s
place in Kiwi life since 1982.
Community remains central to
the brand, with Red Bag sales
generating $1.35 million for
national charity partners and
local community groups.
84
Stores
Online sales
Basket valueUnits sold
FY25: 4.6%
4.4%
0.8%1.7%
Foot traffic
1
52-week same-
store sales
0.3%
0.6%
1. Foot traffic is calculated on a 52 week same-store basis
$1.8b
Sales
Down 2.3% on FY25
Operating loss
$(7.5)m
FY25: $(12.2)m

2928
The Warehouse Group Annual Report 2026Our Brands | Warehouse Stationery
Our
Brands
For more than 30
years, Warehouse
Stationery has helped
New Zealanders
work, study, create
and connect.
FY26 marked a strong step
forward for Warehouse
Stationery, with the brand
returning to sales growth and
almost doubling operating
profit.
Warehouse Stationery
recorded sales of $227.6
million in FY26, up 0.7% on
FY25. Sales increased by 2.0%
on a comparative 52-week
same-store basis. Online
sales represented 7.1% of
Warehouse Stationery sales
in FY26, broadly in line with
FY25. Customers responded
positively to the offer, with
units sold increasing 3.4%
and average basket value
increasing 0.5%. Growth was
driven by both standalone
stores and stores operating
within The Warehouse
network.
Lower clearance and more
disciplined pricing contributed
to an operating profit
improvement of 340 basis
points compared with FY25,
making Warehouse Stationery
the Group’s strongest-
performing retail brand by
operating margin.
Margins strengthened through
the second half, contributing
to an operating profit of $15.9
million up 93.4% on FY25.
Growth was supported by
strong performances across
Warehouse Stationery’s key
categories. Print & Create
sales increased 13.8% on a
comparable 52-week basis,
Art & Craft sales increased
6.7%, and Office Furniture
sales increased 5.5%. Together,
these categories reinforce
Warehouse Stationery’s
position as a destination for
creativity, education and
business services.
The Warehouse Stationery
store network expanded
during the year. A new
standalone store opened
in central Wellington in
October, featuring self-service
print kiosks and an e-waste
recycling service.
At the beginning of FY27,
Warehouse Stationery
opened a new standalone
store in Whitianga, bringing
the brand’s full range of
products and services to the
local community and wider
Coromandel region.
Warehouse Stationery
recorded an in-store Net
Promoter Score of 85.3 in FY26.
While below the 88.8 achieved
in FY25, it remains an excellent
result and demonstrates
consistently high levels of
service across the store
network.
Connecting with local
communities is an important
part of the Warehouse
Stationery brand. Through Get
Creating New Zealand, stores
across the country hosted a
range of creative challenges
and hands-on craft activities
during the school holidays for
children and families.
Back to School is one of
Warehouse Stationery’s key
annual campaigns, engaging
schools and parents across
New Zealand and helping
them prepare for the new
school year with great value
and convenience during a
busy time.
Supporting New Zealand’s
small and medium-sized
businesses is an important
part of the Warehouse
Stationery offer. BizRewards
provides business customers
with access to exclusive offers
and benefits when shopping
with Warehouse Stationery.
67
Stores
Online sales
FY25: 7.0%
7.1 %
Foot traffic
1
0.2%
42 stores within a
The Warehouse
Basket valueUnits sold
0.5%3.4%
1. Foot traffic is calculated on a 52 week same-store basis
52-week same-
store sales
2.0%
$227.6m
Sales
Up 0.7% on FY25
Operating profit
$15.9m
FY25: $8.2m

3130
The Warehouse Group Annual Report 2026Our Brands | Noel Leeming
For 53 years, Noel
Leeming has helped
Kiwis get the most
out of technology
and appliances.
Sales were $1,017.4 million,
down 2.0% on FY25. On a
comparable 52-week basis,
sales declined 0.2% and
same-store sales declined
0.5%. Customers purchased
fewer items during the year,
but spent more when they
did, with store traffic down
slightly by 0.5%, units sold
decreasing 3.9% and basket
value increasing 4.2%.
Operating margin improved
100 basis points during the
year, reflecting a disciplined
approach to pricing and
promotional activity. This
contributed to operating profit
increasing to $21.8 million,
up $10.1 million on FY25, and
the largest contribution from
any of the Group’s brands to
the improvement in Group
operating profit.
Appliances delivered the
strongest growth during the
year, with sales increasing
11.2% on a 52-week basis,
led by whiteware and small
appliances. Cellular sales
increased 4.7% and computers
and storage increased 10.6%,
supported by new brands
and customer demand linked
to the Windows 10 and 3G
transitions. Services, including
delivery, installation and Tech
Solutions, grew 10.1% during
the year.
Major campaigns including
Black Friday and Christmas
performed well, while Boxing
Day was softer, in line with
broader retail conditions. The
brand continued to build
personality and engagement
through its marketing, helping
grow Noel Leeming’s digital
channels, with online sales
increasing to 13.1% of sales, up
from 11.3% in FY25. The website
recorded 118.8 million visits up
from 38 million in FY25, and
the Noel Leeming app had
86,600 downloads during the
year compared to 47,800 in
FY25.
Noel Leeming continued to
invest in its store network and
customer experience. The
brand relocated its Palmerston
North store to more modern
site. Fixtures and materials
from the previous store
were reused, and e-waste
and mobile phone recycling
services were introduced for
the local community. Plans
were announced for a new
store in Mangawhai, opening
in late-2027 to serve the
growing community there.
In May 2026, Noel Leeming
announced its return to
Queen Street in Auckland.
Opening in September 2026,
the new concept store offers
demonstrations, events,
product launches and
hands-on experiences.
Expert advice and service
remain at the heart of the Noel
Leeming customer experience.
Team members strengthened
their product and service
knowledge through NOELedge
Academies, supplier training
and the Passionate Promoters
programme, helping Noel
Leeming maintain a solid
in-store Net Promoter Score
of 76.1 in FY26, compared with
76.9 in FY25.
Noel Leeming helps customers
extend the life of technology
and appliances through
trade-in and recycling
programmes. Customers can
trade in eligible smartphones,
laptops, tablets and
smartwatches in exchange for
a Noel Leeming gift card, and
can now purchase refurbished
devices.
Through its partnership
with TechCollect NZ, Noel
Leeming offers e-waste
recycling. Customers recycled
approximately 169 tonnes
of e-waste through the
programme during FY26, with
Hastings, Gore and Porirua
joining the network and
increasing the number of
participating stores from 29
to 32.
Our
Brands
66
Stores
Online sales
FY25: 11.3%
13.1%
Basket valueUnits sold
4.2%3.9%
Foot traffic
1
0.5%
1. Foot traffic is calculated on a 52 week same-store basis
52-week same-
store sales
0.5%
$1.02b
Sales
Down 2.0% on a
53-week FY25
Operating profit
$21.8m
FY25: $11.7m

32
The Warehouse Group Annual Report 2026
Consolidated Income Statement 34
Consolidated Statement of Comprehensive Income 34
Consolidated Balance Sheet 35
Consolidated Statement of Cash Flows 36
Reconciliation of Operating Cash Flows 36
Consolidated Statement of Changes in Equity 37
1.1 Reporting entity 38
1.2 Compliance statement 38
1.3 Basis of preparation 38
1.4 Changes in accounting policy information and interpretations 38
1.5 Reporting period 38
1.6 Material accounting judgements, estimates and assumptions 38
1.7 Non-GAAP financial information 38
2.0 Segment Information 39
2.1 Operating performance 39
2.2 Adjustment for NZ IFRS 16 (Leases) 39
3.0 Income and Expenses 40
3.1 Other income 40
3.2 Employee expense 40
3.3 Depreciation and amortisation expense 40
3.4 Other operating expense 40
3.5 Auditors’ fees 40
3.6 Net other interest expense 40
4.0 Taxation 41
4.1 Taxation - income statement 41
4.2 Taxation - balance sheet current taxation asset 41
4.3 Taxation - balance sheet deferred taxation 41
5.0 Adjusted Net Profit 42
6.0 Earnings Per Share 42
7.0 Dividends 42
8.0 Working Capital 43
8.1 Inventory 43
8.2 Trade and other receivables 43
8.3 Trade and other payables 43
8.4 Provisions 44
9.0 Non Current Assets 44
9.1 Property, plant and equipment 44
9.2 Intangible assets 45
10.0 Lease Liabilities and Right of Use Assets 46
10.1 Rights of use assets 46
10.2 Lease liabilities 46
10.3 Lease liability maturity analysis 46
11.0 Equity 47
11.1 Capital management 47
11.2 Bank and debt facilities 47
11.3 Contributed equity 47
11.4 Reserves 47
11.5 Minority interest 48
12.0 Financial Risk Management 49
12.1 Financial risk factors 49
12.2 Derivative financial instruments 49
12.3 Liquidity risk 50
12.4 Credit risk 50
12.5 Market risk 50
13.0 Key Management 51
14.0 Commitments 51
15.0 Contingent Liabilities 51
16.0 Related Parties 51
Contents
FINANCIAL STATEMENTS PageOPERATING ASSETS AND LIABILITIES Page
FINANCING AND CAPITAL STRUCTURE
FINANCIAL RISK MANAGEMENT
OTHER DISCLOSURES
BASIS OF PREPARATION
FINANCIAL PERFORMANCE
Financial
Statements
Financial Statements
For the 52 week period ended 2 August 2026
The financial statements have been presented in a style which makes them less complex and more relevant to shareholders. The note disclosures have been grouped
into six sections: ‘basis of preparation’, ‘financial performance’, ‘operating assets and liabilities’, ‘financing and capital structure’, ‘financial risk management’ and ‘other
disclosures’. Each section sets out the material accounting policy information in grey text boxes applied in producing the relevant notes, along with details of any key
judgements and estimates used. The purpose of this format is to provide readers with a clearer understanding of what drives financial performance of the Group.
These financial statements have been approved for issue by the Board of Directors on 29 September 2026.
The Warehouse Group Limited is a limited liability company incorporated and domiciled in New Zealand.
The address of its registered office is 26 The Warehouse Way, Northcote, Auckland 0627, New Zealand.
John Journee
Board Chair
29 September 2026
Dean Hamilton
Audit and Risk Committee Chair
29 September 2026
33
Financial Statements

Consolidated Income Statement
For the 52 week period ended 2 August 2026
(52 Weeks)(53 Weeks)
Note20262025
$ 000$ 000
Retail sales
2.1
3,027,587 3,086,725
Cost of retail goods sold
8.1
(2,041,000)(2,091,643)
Gross profit
986,587
995,082
Other income
3.1
14,680 14,314
Employee expense
3.2
(519,641)(526,520)
Depreciation and amortisation expense
3.3
(146,896)(156,524)
Other operating expense
3.4
(272,421)(285,836)
Operating profit
2.1
62,309 40,516
Unusual items
5.0
(5,716)-
Earnings before interest and tax
56,593 40,516
Interest on leases
10.2
(36,945)(36,847)
Net other interest expense
3.6
(2,659)(6,668)
Profit/(loss) before tax
16,989 (2,999)
Income tax benefit/(expense)
4.1
(5,463)572
Net profit/(loss) for the period
11,526 (2,427)
Attributable to:
Shareholders of the parent
11,234 (2,764)
Minority interests
11.5
292 337
11,526 (2,427)
Basic and diluted earnings per share attributable to shareholders of the parent
6.0
3.3 cents (0.8) cents
Consolidated Statement of Comprehensive Income
For the 52 week period ended 2 August 2026
(52 Weeks)(53 Weeks)
Note20262025
$ 000$ 000
Net profit/(loss) for the period
11,526 (2,427)
Items that may be reclassified subsequently to the income statement
Movement in foreign currency translation reserve
265 -
Movement in derivative cash flow hedges
1,641 (10,301)
Tax relating to movement in hedge reserve
(459)2,884
Other comprehensive income/(loss)
1,447 (7,417)
Total comprehensive income/(loss)
12,973 (9,844)
Attributable to:
Shareholders of the parent
12,681 (10,181)
Minority interest11.5
292 337
Total comprehensive income/(loss)
12,973 (9,844)
Consolidated Balance Sheet
As at 2 August 2026
Note20262025
$ 000$ 000
ASSETS
Current assets
Cash and cash equivalents
11.2
41,883 39,206
Trade and other receivables
8.2
77,505 69,871
Inventory
8.1
438,819 476,718
Derivative financial instruments
12.2
2,618 3,908
Current taxation
4.2
2,329 2,473
Total current assets
563,154 592,176
Non current assets
Trade and other receivables
8.2
17,754 22,088
Property, plant and equipment
9.1
135,286 155,078
Intangible assets
9.2
119,605 140,090
Right of use assets
10.1
583,551 590,187
Deferred taxation
4.3
89,020 94,278
Total non current assets
945,216 1,001,721
Total assets
1,508,370 1,593,897
LIABILITIES
Current liabilities
Borrowings
11.2
58,900 135,300
Trade and other payables
8.3
362,362 376,758
Derivative financial instruments
12.2
2,672 3,768
Lease liabilities
10.3
97,485 92,522
Provisions
8.4
45,707 42,926
Total current liabilities
567,126 651,274
Non current liabilities
Lease liabilities
10.3
607,843 621,317
Provisions
8.4
20,260 20,810
Total non current liabilities
628,103 642,127
Total liabilities
1,195,229 1,293,401
Net assets
313,141 300,496
EQUITY
Contributed equity
11.3
360,235 360,235
Reserves
11.4
611 (836)
Retained earnings
(48,795)(60,029)
Total equity attributable to shareholders
312,051 299,370
Minority interest
11.5
1,090 1,126
Total equity
313,141 300,496
3534
The Warehouse Group Annual Report 2026Financial Statements

Consolidated Statement of Cash Flows
For the 52 week period ended 2 August 2026
(52 Weeks)(53 Weeks)
Note20262025
$ 000$ 000
Cash flows from operating activities
Cash received from customers
3,039,467 3,099,203
Payments to suppliers and employees
(2,805,717)(2,982,438)
Income tax paid
4.2
(532)(692)
Interest paid
(39,705)(43,750)
Net cash flows from operating activities
193,513 72,323
Cash flows from investing activities
Proceeds from sale of property, plant & equipment
43 160
Purchase of property, plant & equipment and computer software
(19,446)(12,604)
Net cash flows from investing activities
(19,403)(12,444)
Cash flows from financing activities
Proceeds/(repayments) from borrowings
(76,400)52,400
Lease principal repayments
(94,705)(104,882)
Dividends paid to minority shareholders
(328)(395)
Net cash flows from financing activities
(171,433)(52,877)
Net cash inflow
2,677 7,002
Opening cash position
39,206 32,204
Closing cash position
11.2
41,883 39,206
Reconciliation of Operating Cash Flows
For the 52 week period ended 2 August 2026
(52 Weeks)(53 Weeks)
Note20262025
$ 000$ 000
Net profit/(loss) for the period
11,526 (2,427)
Non cash items
Depreciation and amortisation expense
3.3
146,896 156,524
Work in progress written off
4,973 -
Movement in deferred taxation
4.1
4,795 (1,570)
Total non cash items
156,664 154,954
4.1
Items classified as investing or financing activities
Loss on disposal/impairment of plant, equipment and software
2,272 187
Gain on lease terminations
2.2
(12)-
Total investing and financing adjustments
2,260 187
Changes in assets and liabilities
Trade and other receivables
(3,300)7,263
Inventory
37,899 (4,590)
Trade and other payables
(13,911)(84,211)
Provisions
2,231 841
Current tax
144 306
Total changes in assets and liabilities
23,063 (80,391)
Net cash flows from operating activities
193,513 72,323
Consolidated Statement of Changes in Equity
For the 52 week period ended 2 August 2026
Note
Share
Capital
Treasury
Shares
Hedge
Reserves
Foreign
Currency
Translation
Reserve
Retained
Earnings
Minority
Interest
Total
Equity
$ 000$ 000$ 000$ 000$ 000$ 000$ 000
For the 52 week period ended 2 August 2026
Balance at the beginning of the period
365,517 (5,282)(1,056)220 (60,029)1,126 300,496
Profit for the period
- - - - 11,234 292 11,526
Movement in foreign currency translation reserve
- - - 265 - - 265
Movement in derivative cash flow hedges
- - 1,641- - - 1,641
Tax relating to movement in hedge reserve
- - (459)- - - (459)
Total comprehensive income
- - 1,182 265 11,234 292 12,973
Contributions by and distributions to owners
Dividends paid
11.5
- - - - - (328)(328)
Balance at the end of the period
365,517 (5,282)126 485 (48,795)1,090 313,141
(note: 11.3)(note: 11.3)(note: 11.4)(note: 11.4)(note: 11.5)
For the 53 week period ended 3 August 2025
Balance at the beginning of the period
365,517 (5,282)6,361 220 (57,265)1,184 310,735
Profit/(loss) for the period
- - - - (2,764)337 (2,427)
Movement in foreign currency translation reserve
- - - - - - -
Movement in derivative cash flow hedges
- - (10,301)- - - (10,301)
Tax relating to movement in hedge reserve
- - 2,884 - - - 2,884
Total comprehensive income/(loss)
- - (7,417)- (2,764)337 (9,844)
Contributions by and distributions to owners
Dividends paid
11.5
- - - - - (395)(395)
Balance at the end of the period
365,517 (5,282)(1,056)220 (60,029)1,126 300,496
(note: 11.3) (note: 11.3) (note: 11.4) (note: 11.4) (note: 11.5)
3736
The Warehouse Group Annual Report 2026Financial Statements

Notes to the Financial Statements - Basis of Preparation
For the 52 week period ended 2 August 2026
1.0 BASIS OF PREPARATION
1.1 Reporting entity
The Warehouse Group Limited (the Company) and its subsidiaries (together
the Group) operate in the New Zealand retail sector. The Company is a limited
liability company incorporated and domiciled in New Zealand. The Group is
registered under the Companies Act 1993 and is an FMC reporting entity under
Part 7 of the Financial Markets Conduct Act 2013. The address of the Company’s
registered office is 26 The Warehouse Way, Northcote, Auckland 0627, New
Zealand. The Company is listed on the New Zealand Exchange (NZX).
1.2 Compliance statement
These financial statements have been prepared in accordance with New Zealand
Generally Accepted Accounting Practice (NZ GAAP), the Financial Markets
Conduct Act 2013 and the NZX Listing Rules. They comply with New Zealand
Equivalents to International Financial Reporting Standards (NZ IFRS), other
applicable Financial Reporting Standards and authoritative pronouncements of
the External Reporting Board, as appropriate for for-profit entities. The financial
statements also comply with International Financial Reporting Standards
Accounting Standards (IFRS Accounting Standards) issued by the International
Accounting Standards Board (IASB).
1.3 Basis of preparation
The measurement basis adopted in the preparation of these financial
statements is historical cost, as modified by the remeasurement of certain
assets and liabilities at fair value. The financial statements are presented in New
Zealand dollars and all amounts are rounded to the nearest thousand dollars,
unless otherwise stated.
Material accounting policy information and other explanatory information
applied in the preparation of these financial statements are set out in the
accompanying notes where an accounting policy choice exists under NZ IFRS,
where the policy is new or has changed, where the policy is specific to the
Group’s operations, or where the information is considered material to an
understanding of the financial statements. Where NZ IFRS does not permit
an accounting policy choice, the Group has applied the requirements of the
relevant standards and has not separately disclosed the accounting policy.
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries. Material subsidiaries at balance date are listed
below.
Percentage ownership
Name of entityPrincipal activity2026 2025
The Warehouse LimitedRetail100 100
Eldamos Investments LimitedProperty100 100
The Warehouse Nominees
Limited
Investment100 100
Group structure
There were no changes to the Group’s legal structure during 2026. Subsequent
to balance date, the Group commenced the process of liquidating TWHouse
Sourcing Private Limited in India following the cessation of its sourcing
operations as part of the Group restructuring programme (refer note 5). The
liquidation is not expected to have a material impact on the Group’s financial
position or performance.
1.4 Changes in accounting policy information and
interpretations
There were no new accounting standards, amendments or interpretations that
became effective for the Group during 2026 that had a material impact on the
Group’s accounting policies, recognition, measurement, financial position or
financial performance.
The Group has not early adopted any standards, amendments or interpretations
that have been issued but are not yet effective.
In May 2024, the IASB issued NZ IFRS 18 Presentation and Disclosure in Financial
Statements, which replaces NZ IAS 1 Presentation of Financial Statements. NZ
IFRS 18 is effective for annual reporting periods beginning on or after 1 January
2027 and will therefore be mandatory for the Group from 2028. The standard
introduces new presentation and disclosure requirements for the primary
financial statements and management-defined performance measures. The
Group is currently assessing the impact of the standard and does not currently
expect a material impact on the recognition or measurement of assets, liabilities,
income or expenses.
Climate change
The Group considered the potential financial statement impacts of climate-
related risks and opportunities as part of the preparation of its sustainability
reporting. This assessment included consideration of whether climate-
related matters affected key accounting estimates and judgements, including
impairment testing, useful economic lives of assets, provisions, asset valuations
and the recoverability of assets.
Based on the assessment performed, the Group concluded that climate-related
matters did not have a material impact on the recognition or measurement
of assets and liabilities at balance date, nor did they result in any material
adjustments to the judgements, estimates and assumptions used in preparing
the financial statements. Accordingly, no climate-related matters were
identified that required specific disclosure beyond those included in the Group’s
Sustainability Report.
1.5 Reporting period
These financial statements cover the 52 week period from 4 August 2025 to
2 August 2026. Comparative information relates to the 53 week period from
29 July 2024 to 3 August 2025. The Group operates on a weekly reporting cycle,
resulting in a 53 week reporting period approximately every five to six years.
1.6 Material accounting judgements, estimates and
assumptions
The preparation of the financial statements requires the Group to make
judgements, estimates and assumptions that effect the reported amounts of
assets and liabilities at balance date and the reported amounts of revenues and
expenses during the year. Judgements and estimates which are material to the
financial statements are found in the following notes:
(a) Lease liabilities and right of use assets (notes 10.1 and 10.2)
(b) Inventory (note 8.1)
(c) Property, plant and equipment (note 9.1)
(d) Intangible assets and tax losses (note 9.2)
1.7 Non-GAAP financial information
The Group uses operating profit, EBIT, unusual items and adjusted net profit to
describe financial performance, as these measures provide useful information
on the underlying performance of the business. These non-GAAP measures
are not defined by NZ IFRS and may not be comparable with similarly titled
measures reported by other entities. The Group’s policies for unusual items and
adjusted net profit are set out in note 5.0.
Notes to the Financial Statements - Financial Performance
For the 52 week period ended 2 August 2026
2.0 SEGMENT INFORMATION
(52 Weeks)(53 Weeks)(52 Weeks)(53 Weeks)
2.1 Operating performance
Retail salesOperating profit/(loss)Retail operating margin
Note202620252026202520262025
$ 000$ 000$ 000$ 000
The Warehouse
1,774,873 1,816,475 (7,529)(12,247)-0.4% -0.7%
Warehouse Stationery
227,630 226,036 15,903 8,217 7.0% 3.6%
Warehouse segment
2,002,503 2,042,511 8,374 (4,030)0.4% -0.2%
Noel Leeming
1,017,353 1,038,058 21,758 11,667 2.1% 1.1%
Other Group operations
12,464 11,578 (7,567)(6,326)
Inter-segment eliminations
(4,733)(5,422)- -
Group
3,027,587 3,086,725 22,565 1,311 0.7% 0.0%
Adjustments for NZ IFRS 16 (Leases)
2.2
39,744 39,205
Operating profit
62,309 40,516
Unusual items
5.0
(5,716)-
Earnings before interest and tax
56,593 40,516
Retail sales
Retail sales are recognised when the customer receives the goods which typically occurs at the point of sale for instore sales, or where the goods are purchased
online, when the goods have been delivered to the customer. Revenue from the sale of goods is recognised at the amount of the transaction price when all
performance obligations have been met and the customer obtains control of the goods.
Operating segments
The Group has three retail brands trading in the New Zealand retail sector. These brands form the basis of internal reporting used by senior management and the
Board of Directors to monitor and assess performance and assist with strategy decisions. Brand trading performance is assessed using operating profit, which is a
non-GAAP measure that excludes the impacts of NZ IFRS 16 Leases, and is considered a better measure of underlying brand performance. Assets are not allocated to
operating segments and the balance sheet is managed and internally reported on a consolidated basis to the senior management and the Board of Directors.
Customers can purchase products from the three main retail chains either online or through the Group’s physical retail store network. At year end the Group’s
physical store network consists of 84 The Warehouse stores, 67 Warehouse Stationery stores (including 42 stores trading within The Warehouse stores), and 66
Noel Leeming stores. The Warehouse predominantly sells general merchandise and apparel, Noel Leeming sells technology and appliance products and Warehouse
Stationery sells stationery products.
Other Group operations include a property company, a chocolate factory and the residual cost of unallocated support office functions.
(52 Weeks)(53 Weeks)
2.2 Adjustment for NZ IFRS 16 (Leases)
Note20262025
$ 000$ 000
Pre NZ IFRS 16 lease expense
132,580 132,538
Right of use asset amortisation
10.1
(92,848)(93,333)
Gain on lease terminations
12 -
Impact on operating profit
2.1
39,744 39,205
Lease liability interest
10.2
(36,945)(36,847)
Impact on net profit before tax
5.0
2,799 2,358
3938
The Warehouse Group Annual Report 2026Financial Statements

3.0 INCOME AND EXPENSES
(52 Weeks)(53 Weeks)
3.1 Other income
20262025
$ 000$ 000
Tenancy rents received
2,079 2,328
Retail media
9,133 8,702
Other
3,468 3,284
Other income
14,680 14,314
(52 Weeks)(53 Weeks)
3.2 Employee expense
Note20262025
$ 000$ 000
Wages and salaries
509,112 522,103
Directors' fees
13.0
767 772
Performance based compensation
9,762 3,645
Employee expense
519,641 526,520
(52 Weeks)(53 Weeks)
3.3 Depreciation and amortisation expense
Note20262025
$ 000$ 000
Property, plant and equipment
9.1
32,826 40,325
Computer software
9.2
21,222 22,866
Right of use assets
10.1
92,848 93,333
Depreciation and amortisation expense
146,896 156,524
(52 Weeks)(53 Weeks)
3.4 Other operating expense
20262025
$ 000$ 000
Other operating expenses include:
Bad debt and movement in provision for doubtful debts expense
1,155 (304)
Loss on disposal/impairment of plant, equipment and software
2,272 187
Net foreign currency exchange loss/(profit)
(3)273
(52 Weeks)(53 Weeks)
3.5 Auditors’ fees
20262025
$ 000$ 000
Audit and review of the financial statements
Auditing the Group financial statements
810 803
Reviewing the half year financial statements
180 118
Audit of overseas subsidiary financial statements
18 19
1,008 940
Other agreed-upon procedure engagements
Annual shareholder meeting voting
12 10
Negative Pledge compliance certificate
12 12
24 22
Total fees paid to PricewaterhouseCoopers (PwC)
1,032 962
All fees are paid to PwC New Zealand, with the exception of $18,000 (2025: $19,000) paid to PwC India for the audit of the Group’s subsidiary in India.
Audit fees - corporate governance
In accordance with the Group’s policies regarding audit governance and independence, other non-audit services are approved by the Group’s Audit and
Risk Committee. The Group’s policy permits the audit firm to provide non-audit services that are not considered to be in conflict with the preservation of the
independence of the auditor, subject to Audit and Risk Committee approval.
(52 Weeks)(53 Weeks)
3.6 Net other interest expense
20262025
$ 000$ 000
Interest on deposits and use of money interest received
(142)(319)
Interest on borrowings
2,801 6,987
Net other interest expense
2,659 6,668
4.0 TAXATION
A reconciliation between the tax expense recognised in the income statement and tax expense calculated per the statutory income tax rate is detailed below.
(52 Weeks)(53 Weeks)
4.1 Taxation - income statement
Note20262025
$ 000$ 000
Profit/(loss) before tax
16,989 (2,999)
Taxation calculated at 28%
4,757 (840)
Adjusted for the tax effect of:
Other non deductible expenditure
603 230
Income tax under provided in prior year
103 38
Income tax (benefit)/expense
5,463 (572)
Income tax (benefit)/expense comprises:
Current year income tax payable
4.2
668 998
Deferred taxation
4.3
4,795 (1,570)
Income tax (benefit)/expense
5,463 (572)
Income taxation
The income tax expense for the period is the tax payable on the current year’s taxable income based on the income tax rate adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are
settled, based on those tax rates which are enacted or substantively enacted. The relevant tax rates are applied to the cumulative amounts of deductible and
taxable temporary differences to measure the deferred tax asset or liability.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available
to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in subsidiaries and associates where the parent entity is able to control the timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised in equity are similarly recognised in equity.
Goods and services tax (GST)
The income statement and statement of cash flows have been prepared so that all components are stated exclusive of GST. All items in the balance sheet are
stated net of GST with the exception of receivables and payables which include GST invoiced.
Organisation for Economic Co-operation and Development’s Pillar Two
The Organisation for Economic Co-operation and Development (OECD) has introduced GloBE Pillar Two model rules which aim to implement a minimum global tax
rate of 15 per cent across all jurisdictions.
The New Zealand Government has enacted legislation to implement the OECD Pillar Two Rules which are effective for the Group from August 2025. The Group also
operates in other countries which apply the Pillar Two Rules with effect for the Group from August 2024. The Group has applied the exception to recognising and
disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.
The Group has undertaken a high-level assessment to determine the Group’s potential exposure to Pillar Two top-up taxes. Based on the assessment, it is expected
that the Group will satisfy the relevant criteria to rely on the Pillar Two transitional safe harbour rules and is not expected to have exposure to Pillar Two top up
taxes. The Group is continuing to monitor the developments of the Pillar Two legislation in countries that the Group operates in and assess the impact of Pillar Two
legislation on its future financial performance.
The following table details the movement in the current income tax asset during the current and prior year.
4.2 Taxation - balance sheet current taxation asset
Note20262025
$ 000$ 000
Opening balance
2,473 2,779
Foreign exchange movement
(8)-
Current year income tax payable
4.1
(668)(998)
Income tax paid
532 692
Closing balance
2,329 2,473
4.3 Taxation - balance sheet
deferred taxation
Opening Balance
Credited/(expensed) to the
income statement
Credited/(expensed) to
equityClosing Balance
Note20262025202620252026202520262025
$ 000$ 000$ 000$ 000$ 000$ 000$ 000$ 000
Lease liabilities
201,979 205,838 (2,643)(3,859)- - 199,336 201,979
Inventory
10,494 10,967 2,042 (473)- - 12,536 10,494
Property, plant, equipment & software
2,774 6,873 1,806 (4,099)- - 4,580 2,774
Employee provisions
13,842 14,074 (499)(232)- - 13,343 13,842
Tax losses
9.2
34,617 25,349 (7,534)9,268 - - 27,083 34,617
Derivatives
411 - - - (411)411 - 411
Other
5,357 6,327 853 (970)(4)- 6,206 5,357
Gross deferred tax asset
269,474 269,428 (5,975)(365)(415)411 263,084 269,474
Right of use assets
(165,252)(168,451)1,858 3,199 - - (163,394)(165,252)
Brand
(4,340)(4,340)- - - - (4,340)(4,340)
Derivatives
- (2,473)- - (48)2,473 (48)-
Other
(5,604)(4,340)(678)(1,264)- - (6,282)(5,604)
Gross deferred tax liability
(175,196)(179,604)1,180 1,935 (48)2,473 (174,064)(175,196)
Net deferred tax asset
94,278 89,824 (4,795)1,570 (463)2,884 89,020 94,278
(note: 4.1) (note: 4.1)
Notes to the Financial Statements - Financial Performance
For the 52 week period ended 2 August 2026
Notes to the Financial Statements - Financial Performance
For the 52 week period ended 2 August 2026
4140
The Warehouse Group Annual Report 2026Financial Statements

5.0 ADJUSTED NET PROFIT
(52 Weeks)(53 Weeks)
Adjusted net profit reconciliationNote20262025
$ 000$ 000
Net profit/(loss) attributable to shareholders of the parent
11,234 (2,764)
Add back:
Unusual items: Restructure costs
5,716 -
Adjustments for NZ IFRS 16 (Leases)
2.2
(2,799)(2,358)
Income tax relating to above items
(620)660
Adjusted net profit/(loss)
13,531 (4,462)
Certain transactions can make the comparison of profits between years difficult. The Group uses adjusted net profit as a key indicator of performance and
considers it a better measure of underlying business performance. Adjusted net profit makes allowance for the after tax effect of unusual items which are not
directly connected with the Group’s normal trading activities. The Group defines unusual items as any gains or losses from property disposals, goodwill and brand
impairment, costs relating to business acquisitions or disposals, ineffective hedge derivatives and costs connected with restructuring the Group. Following the
adoption of NZ IFRS 16 the non-cash impact relating to the lease accounting standard is also excluded from adjusted net profit.
Restructure costs
In November 2025, the Group commenced a cost reset programme aimed at improving profitability and reducing operating costs. Restructure costs comprise head
office redundancy costs associated with the co-sourcing of selected corporate and administrative functions with Tata Consultancy Services, as well as the closure of
TWHouse Sourcing Private Limited, the Group’s Indian subsidiary.
6.0 EARNINGS PER SHARE
(52 Weeks)(53 Weeks)
Earnings per share calculationNote20262025
Net profit/(loss) attributable to shareholders of the parent ($000s)
11,234 (2,764)
Adjusted net profit/(loss) ($000s)
5.0
13,531 (4,462)
Basic and diluted
Weighted average number of ordinary shares (net of treasury shares) on issue (000s)
345,354 345,354
Earnings per share (cents)
3.3 (0.8)
Adjusted earnings per share (cents)
3.9 (1.3)
Earnings per share (EPS) is the amount of post tax profit attributable to each share. Basic EPS is calculated by dividing net profit attributable to shareholders by
the weighted average number of ordinary shares (net of treasury shares) outstanding during the year. Adjusted basic EPS is similarly calculated using adjusted net
profit as the numerator.
The Group did not hold any potentially dilutive share rights throughout the current financial year or at balance date last year.
7.0 DIVIDENDS
Dividend policy
The Group declares two dividends in a typical year, the first in respect of the half year (interim dividend) and second in respect of the full year result (final dividend).
Dividends are declared at the discretion of the Board and subject to trading performance, market conditions and liquidity requirements. The Group’s dividend policy
is to distribute at least 70% of the Group’s full year adjusted net profit. Notwithstanding the Group’s adjusted net profit of $13.5 million (refer note 5.0), the Board did
not declare a final dividend for 2026. While the performance improved during the year, the Board determined that retaining capital to support the Group’s financial
recovery and strategic investment priorities was appropriate in the circumstances.
Imputation credit account20262025
$ 000$ 000
Imputation credits at balance date available for future distribution
107,856 107,729
Notes to the Financial Statements - Operating Assets and Liabilities
For the 52 week period ended 2 August 2026
8.0 WORKING CAPITAL
8.1 Inventory
20262025
$ 000$ 000
Finished goods
397,891 412,409
Inventory provisions
(18,883)(15,210)
Retail stock
379,008 397,199
Goods in transit from overseas
59,811 79,519
Inventory
438,819 476,718
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using a weighted average method and includes expenditure incurred
to purchase the inventory and transport it to its current location. Net realisable value is the estimated selling price of the inventory in the ordinary course of
business less costs necessary to make the sale. The cost of inventories consumed during the period are recognised as an expense and included in cost of goods
sold in the income statement.
Material accounting judgements, estimates and assumptions
Assessing provisions for inventory obsolescence, net realisable value and shrinkage involves making estimates and judgements in relation to future selling prices
and expected shrinkage rates between the most recent store stock counts and balance date. Shrinkage is a reduction in inventory due to shoplifting, employee theft,
record keeping errors and supplier fraud. The Group considers a wide range of factors including historical data, current trends and product information from buyers
as part of the process to determine the appropriate value of these provisions.
Goods in transit from overseas
Goods in transit are recognised when control of the goods passes to the Group. Control is determined based on the Group’s substantive rights over the inventory,
including its ability to direct the use and movement of the goods and obtain the associated economic benefits.
8.2 Trade and other receivables
20262025
$ 000$ 000
Trade receivables
34,207 29,512
Prepayments
39,618 39,760
Rebate accruals and other debtors
21,434 22,687
Trade and other receivables
95,259 91,959
Less non current prepayments
(17,754)(22,088)
Current trade and other receivables
77,505 69,871
Trade receivables arise from sales made to customers on credit or through the collection of rebates from suppliers not otherwise deducted from suppliers’
payable accounts. Trade receivables are non-interest bearing and are generally on 30 to 60 day terms. Trade receivables are recognised based on the value of
the invoice sent to the customer and adjusted for expected credit losses to provide for future unrecovered debts. The expected collectability of trade and other
receivables is reviewed on an ongoing basis.
8.3 Trade and other payables
20262025
$ 000$ 000
Local trade creditors and accruals
205,475 224,514
Foreign currency trade creditors
71,588 75,223
Goods in transit creditors
33,378 35,236
Capital expenditure creditors
2,629 1,028
Goods and services tax
26,815 17,404
Reward schemes and gift vouchers
13,572 13,589
Payroll accruals
8,905 9,764
Trade and other payables
362,362 376,758
Trade payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are normally
unsecured and local creditors are typically settled within 60 days and foreign creditors up to 120 days of recognition. Due to the short term nature of these
payables, the carrying value approximates their fair value.
Foreign currency trade creditors
The Group has a supplier financing arrangement for foreign currency trade creditors with one of its banks. The Group provides the bank and the supplier with
visibility of invoices it has approved for payment, which allows suppliers choosing to enter the financing arrangement to factor selected invoices and accelerate
settlement from the bank before the invoice due date. The Group is not party to the financing leg of the arrangement and are not aware of the exact terms and
conditions negotiated between the bank and our suppliers. The payment terms of the Group’s foreign currency trade creditors do not exceed 120 days from the
invoice date and invoice payment terms (including security) do not vary between those where suppliers have factored their receivables from those who have not.
The Group classifies the amounts factored by suppliers as foreign currency trade creditors because the characteristics of the amounts payable by the Group are
the same as its other foreign currency trade creditors. At balance date $58.5 million (2025: $64.0 million) of foreign currency trade creditors were part of a supplier
financing arrangement.
Notes to the Financial Statements - Financial Performance
For the 52 week period ended 2 August 2026
4342
The Warehouse Group Annual Report 2026Financial Statements

8.4 Provisions
CurrentNon currentTotal
202620252026202520262025
$ 000$ 000$ 000$ 000$ 000$ 000
Employee entitlements
40,474 38,274 13,783 14,252 54,257 52,526
Make good provision
1,465 937 6,477 6,558 7,942 7,495
Sales return provision
3,768 3,715 - - 3,768 3,715
Provisions
45,707 42,926 20,260 20,810 65,967 63,736
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable
that an outflow of economic benefits will be required to settle the obligation.
Employee entitlements
(i) Annual leave and sick leave
Liabilities for annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in provisions in
respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
(ii) Performance based compensation
The Group recognises a liability and expense for incentives payable to employees where either a contractual or constructive obligation arises to pay an employee
based on achieving an agreed level of individual and company performance.
(iii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on New Zealand government
bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Make good provision
The Group has an obligation to restore certain leasehold sites to their original condition when the lease expires. This provision represents the present value of the
expected future make good commitment. Amounts charged to the provision represent both make good costs incurred and costs incurred which mitigate the final
liability prior to the lease expiry.
Sales return provision
The Group provides various guarantees and warranties to replace, repair or refund customers for faulty or defective products sold. This provision represents the
estimated sales return obligation at balance date based on historical sales return rates.
9.0 NON CURRENT ASSETS
9.1 Property, plant and
equipment
Land and buildingsPlant and equipmentWork in progressTotal
Note20262025202620252026202520262025
$ 000$ 000$ 000$ 000$ 000$ 000$ 000$ 000
Cost
60,590 60,590 695,211 716,526 9,567 11,278 765,368 788,394
Accumulated depreciation
(13,214)(12,780)(597,076)(588,406)- - (610,290)(601,186)
Opening carrying amount
47,376 47,810 98,135 128,120 9,567 11,278 155,078 187,208
Additions
- - 15,768 10,150 3,144 (1,711)18,912 8,439
Disposals, write offs & impairment
- - (905)(244)(4,973)- (5,878)(244)
Depreciation
3.3
(403)(434)(32,423)(39,891)- - (32,826)(40,325)
Closing carrying amount
46,973 47,376 80,575 98,135 7,738 9,567 135,286 155,078
Cost
60,590 60,590 701,144 695,211 7,738 9,567 769,472 765,368
Impairment & accumulated depreciation
(13,617)(13,214)(620,569)(597,076)- - (634,186)(610,290)
Closing carrying amount
46,973 47,376 80,575 98,135 7,738 9,567 135,286 155,078
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. The cost of purchased property, plant and equipment
is the value of the consideration given to acquire the assets inclusive of directly attributable costs incurred to bring the assets to the location and condition
necessary for their intended use.
Property, plant and equipment are depreciated on a straight line basis to allocate the cost, less any residual value, over their useful life. The estimated useful lives
of property, plant and equipment are as follows:
Freehold land indefinite
Freehold buildings 50 - 100 years
Plant and equipment 3 - 15 years
Work in progress not depreciated
The Group annually reviews the carrying amounts of property, plant and equipment for impairment. An asset’s carrying amount is written down immediately to
its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. In assessing whether an asset is impaired, reference is
made to individual store profitability and any other known events or circumstances that may indicate that the carrying amount of an asset may be impaired.
Gains and losses on disposals of assets are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income
statement. Costs incurred on repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Material accounting judgements, estimates and assumptions
The Group assesses store assets, software (refer note 9.2) and store development work in progress for indicators of impairment and, where indicators exist,
estimates their recoverable amount. This assessment requires judgement in assessing the future economic benefits expected to be derived from the assets,
including expected store performance, future utilisation and alternative deployment opportunities. Where assets are no longer expected to generate sufficient future
economic benefits, the recoverable amount is based on the most appropriate measure of value, including disposal or scrap value where applicable.
9.2 Intangible assets
GoodwillBrand namesComputer softwareTotal
Note20262025202620252026202520262025
$ 000$ 000$ 000$ 000$ 000$ 000$ 000$ 000
Cost
57,456 57,456 15,500 15,500 147,578 147,155 220,534 220,111
Impairment & accumulated amortisation
- - - - (80,444)(60,999)(80,444)(60,999)
Opening carrying amount
57,456 57,456 15,500 15,500 67,134 86,156 140,090 159,112
Additions
- - - - 2,146 3,948 2,146 3,948
Disposals, write offs & impairment
- - - - (1,409)(104)(1,409)(104)
Amortisation
3.3
- - - - (21,222)(22,866)(21,222)(22,866)
Closing carrying amount
57,456 57,456 15,500 15,500 46,649 67,134 119,605 140,090
Cost
57,456 57,456 15,500 15,500 147,479 147,578 220,435 220,534
Impairment & accumulated amortisation
- - - - (100,830)(80,444)(100,830)(80,444)
Closing carrying amount
57,456 57,456 15,500 15,500 46,649 67,134 119,605 140,090
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration paid above the fair value of the net identifiable assets, liabilities
and contingent liabilities acquired.
Brand names
Brand names acquired in a business combination are recognised at fair value at the acquisition date. Brand names are considered to have indefinite useful lives
as the Group has rights to use these names in perpetuity.
Impairment of goodwill and brand names
Assets that have an indefinite useful life are reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amount
of the asset may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Computer software (excluding cloud computing arrangements)
Internal and external costs directly incurred in the purchase or development of software controlled by the Group are recognised as intangible assets, including
subsequent improvements, when it is probable that they will generate a future economic benefit. Computer software is amortised using the straight-line method
over periods ranging from two to ten years.
Cloud computing arrangements
Cloud computing arrangements provide the Group with the right to access a supplier’s cloud based software for a specified contract period. If the Group does not
control the cloud based software, the related development costs (external and internal) are recognised as either:
(a) an expense when they are incurred for internal costs and the costs of an integrator not related to the software provider, or
(b) as a prepayment and then expensed over the term of the cloud computing arrangement for the costs of the software provider or its subcontractor.
Brand and goodwill impairment testing
The Group performs an annual impairment test of its brand and goodwill intangible assets by comparing their recoverable amounts with their carrying amounts.
Recoverable amounts are determined using the fair value less costs of disposal methodology.
The valuations are based on discounted cash flow projections that reflect management’s assessment of future operating performance. In determining the cash
flow forecasts, the Group considers a range of factors including Board-approved budgets, strategic plans, external market evidence, historical forecast accuracy
and current trading performance. The forecasts incorporate management’s best estimate of future economic conditions and expected earnings recovery, giving
appropriate weight to external evidence where available. The Group also engages external advisers to determine appropriate discount rates and long-term growth
rates, which are key assumptions used in the valuations.
The Group’s goodwill and brand assets are allocated to cash-generating units (CGUs), which represent the lowest level within the Group at which the assets are
monitored for internal management purposes. Details of these carrying amounts allocated to each CGU, together with the key assumptions used in the impairment
tests, including the assumptions applied to extrapolate cash flows beyond the five-year forecast period, are set out below.
Impairment testing
Noel LeemingThe Warehouse
2026202520262025
$ 000$ 000$ 000$ 000
Goodwill
31,776 31,776 25,680 25,680
Brand names
15,500 15,500 - -
Closing carrying amount
47,276 47,276 25,680 25,680
Key assumptions
Terminal operating margin (%)
3.4 3.2 2.3 4.0
Terminal growth rate (%)
2.1 2.0 2.1 2.0
Pre-tax discount rate (%)
16.4 15.9 15.3 15.4
Post-tax discount rate (%)
11.8 11.5 11.1 11.1
Operating margin represents earnings before interest, taxation, unusual items and the impact of NZ IFRS 16. The Warehouse segment includes the Warehouse
Stationery business and Support Office functions. The annual impairment testing of the Noel Leeming and The Warehouse CGU indicated that recoverable amounts
exceeded carrying amounts and that sufficient headroom existed within each CGU. Accordingly, the attributed goodwill and brand assets were not impaired.
Material accounting judgements, estimates and assumptions
The impairment assessment of goodwill and brand assets, and the recoverability assessment of carried-forward tax losses (refer note 4.3), involve estimation
uncertainty because both rely on forecasts of future financial performance. Management assesses the reasonableness of these forecasts through consideration of
historical forecasting accuracy, external market evidence and sensitivity analysis of key assumptions. Based on this assessment, management concluded that the
recoverable amounts of both the Noel Leeming and The Warehouse CGU exceeded their carrying amounts and that sufficient future taxable profits are expected to
be available to support recognition of deferred tax assets arising from carried-forward tax losses.
Notes to the Financial Statements - Operating Assets and Liabilities
For the 52 week period ended 2 August 2026
Notes to the Financial Statements - Operating Assets and Liabilities
For the 52 week period ended 2 August 2026
4544
The Warehouse Group Annual Report 2026Financial Statements

10.0 LEASE LIABILITIES AND RIGHT OF USE ASSETS
10.1 Rights of use assets
CostAccumulated depreciationCarrying amount
Note202620252026202520262025
$ 000$ 000$ 000$ 000$ 000$ 000
Opening balance
1,486,277 1,454,639 (896,090)(853,029)590,187 601,610
Foreign exchange movement
425 40 (170)(18)255 22
Additions
10.2
49,922 54,621 - - 49,922 54,621
Depreciation
3.3
- - (92,848)(93,333)(92,848)(93,333)
Reassessment of lease terms
10.2
36,292 27,267 - - 36,292 27,267
Lease surrenders and terminations
(22,953)(50,290)22,696 50,290 (257)-
Closing balance
1,549,963 1,486,277 (966,412)(896,090)583,551 590,187
A ‘lease liability’ and a corresponding ‘right of use’ asset is recognised when the Group commences a lease with a term exceeding 12 months and has sufficient
value to not be characterised as a low value lease. The initial lease liability and corresponding ‘right of use’ asset represent the present value of future lease
payments discounted using the Group’s incremental borrowing rate over the lease term including any contractual lease extension options considered reasonably
certain to be exercised. The future lease payments recognise contractual fixed rate lease payment adjustments but not adjustments made for inflation-indexed
lease payment increases.
Lease payments are allocated between the lease liability and the finance cost. The finance cost is charged to the income statement over the lease period to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right of use asset is depreciated over the shorter of the
asset’s useful life and the lease term on a straight line basis.
The Group leases various warehouses, retail stores, equipment and vehicles. Property leases represent around 98% of the carrying value of the Group’s ‘right of use
assets’. The property leases are negotiated on an individual basis, typically for an initial period of 6 to 10 years and usually include extension options, but may also
contain a wide variety of other terms and conditions. Extension options provide the Group with operational flexibility in terms of managing the Group’s retail intensity
within different catchment areas. The majority of extension and termination options may only be exercised by the Group and not by the landlord.
10.2 Lease liabilities
Note20262025
$ 000$ 000
Opening balance
713,839 736,812
Foreign exchange movement
248 21
Additions
10.1
49,922 54,621
Interest
36,945 36,847
Reassessment of lease terms
10.1
36,292 27,267
Lease repayments
(131,650)(141,729)
Lease surrenders and terminations
(268)-
Closing balance
10.3
705,328 713,839
10.3 Lease liability maturity analysis
Gross lease paymentsInterestCarrying amount
202620252026202520262025
$ 000$ 000$ 000$ 000$ 000$ 000
Within one year
132,775 126,919 (35,290)(34,397)97,485 92,522
One to two years
115,788 122,399 (28,230)(30,155)87,558 92,244
Two to five years
335,657 319,951 (63,312)(61,235)272,345 258,716
Beyond five years
280,774 302,258 (32,834)(31,901)247,940 270,357
Lease liability
864,994 871,527 (159,666)(157,688)705,328 713,839
Current lease liability
97,485 92,522
Non current lease liability
607,843 621,317
Lease liability
10.2 705,328 713,839
Material accounting judgements, estimates and assumptions
To quantify lease liabilities and ‘right of use’ carrying values requires the Group to use judgement to assess the appropriate lease term and estimates to determine
the incremental borrowing rate applied to calculate these amounts. These judgements and estimates can significantly impact the carrying value of both the right of
use asset and lease liabilities recognised in the balance sheet and corresponding expenses recorded in the income statement.
The Group uses the judgement of experts within its property department to assess the lease term at the inception of a lease and to reassess a lease term when a
significant event or significant change in circumstances within the control of Group affects the prospect that a right of renewal contained in a lease will be exercised.
The Group engages an independent valuation expert to establish the incremental borrowing rates applied to new and modified leases during the year. The average
incremental borrowing rate used to calculate the value of lease liabilities at balance date was 5.44% (2025: 5.23%).
Notes to the Financial Statements - Financing and Capital Structure
For the 52 week period ended 2 August 2026
11.0 EQUITY
11.1 Capital management
Capital is defined by the Group to be the total equity as shown in the balance sheet. The Group’s capital management objectives are to safeguard the Group’s ability
to continue as a going concern, to provide an appropriate rate of return to shareholders, optimise the Group’s cost of capital and maintain a liquidity buffer (refer
note 11.2).
The Group reviews its capital structure annually, unless there is a material change requiring an earlier response and may make adjustments by means including
changes to the Group’s dividend pay-out ratio, issue of new shares, debt issuance, sale of assets or a combination of these.
Externally imposed capital requirements
The Group has a negative pledge arrangement with its funding providers that requires the parent and its guaranteeing Group companies to comply with certain
quarterly debt ratios and restrictive covenants. The calculation of these ratios is adjusted to exclude the impact of the NZ IFRS 16 Leases accounting standard. The
principal covenants at balance date were:
1) The gearing ratio will not exceed 60% during the first quarter ending October or exceed 50% in each of the remaining quarters of the year;
2) Interest cover will not be less than 6.5 times operating profit plus depreciation, for the 2026 financial year; and
3) Interest cover will not be less than 2.0 times operating profit, for subsequent years.
Depreciation for the purposes of the cover ratio calculations (above) includes software amortisation, but excludes ‘right of use asset’ amortisation. The Group was in
compliance with all aspects of the negative pledge covenants throughout the current and previous financial year.
11.2 Bank and debt facilities
20262025
$ 000$ 000
Cash and cash equivalents
41,883 39,206
Borrowings
(58,900)(135,300)
Net debt
(17,017)(96,094)
Committed bank credit facilities
345,000 450,000
Liquidity buffer
327,983 353,906
The Group’s liquidity policy requires a minimum liquidity buffer of $100 million, with a target above $150 million.
11.3 Contributed equity
Contributed equityOrdinary shares
2026202520262025
$ 000$ 000$ 000$ 000
Share capital
365,517 365,517 346,843 346,843
Treasury shares
(5,282)(5,282)(1,489)(1,489)
Contributed equity
360,235 360,235 345,354 345,354
There were no changes to the Group’s contributed equity during the current year and previous year.
Ordinary shares are classified as equity. Incremental costs, directly attributable to the issue of new shares, are shown in equity as a deduction from the proceeds
of the share issue.
Where the Group purchases its own equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs is
deducted from equity attributable to the shareholders until the shares are cancelled or reissued. Where such shares are reissued, any consideration received, net
of any directly attributable incremental transaction costs, is included in equity attributable to shareholders.
Ordinary shares on issue are fully paid and carry one vote per share and participate equally in dividends, other distributions from equity and any surplus on a
winding up of the Group. The Group retains its own ordinary shares which are used for employee share based payment arrangements. Voting rights attached to the
shares are held by the trustees of the employee share plans, and dividends paid on the shares are retained by the trustee for the benefit of the Group.
Notes to the Financial Statements - Operating Assets and Liabilities
For the 52 week period ended 2 August 2026
4746
The Warehouse Group Annual Report 2026Financial Statements