WHS - Warehouse Group

[winner69]

WHS share price back over 370 today .... maybe even 375

Forbar summed it nicely

[Waltzing]

can you go and do the same and re pump up the tires of MHJ winner?

think this thread probably wants to go back to sleep couldnt not get a park around local WHS yesterday...

[winner69]

can you go and do the same and re pump up the tires of MHJ winner?

think this thread probably wants to go back to sleep couldnt not get a park around local WHS yesterday...

Thought you wanted MHJ to deflate …like one big puncture …like when bubbles pop?

[winner69]

The retail data set that TWG use to measure their own performance against all retail sales showed December sales were up 3% on pcp and that for the 5 months Aug/Dec (TWG year to date) sales were down 7%

Seems to be close to what TWG were saying ...I think

[Beagle]

Was the downgrade already priced into the SP given the recent low PE ratio based on the last annual result? In other words, maybe the market saw the last annual result as unsustainable, hence the fall in SP is considerably less than the fall in future profit.

https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/
Now the market, analysts and investors seem to have had time to fully digest this we have observed the average analyst forecast declining from $126m to $109m, a 13.5% reduction and a share price drop from ~ $4.00 to $3.46, also a commensurate 13.5% reduction. Efficient market hypothesis looks alive and in good health to me.

I'm sticking with $90m and think the fair value is therefore considerably lower than the current share price, about 17% down from here ($2.85) although arguments for it being $2.50 - $3.20 have been made by me before my sense is somewhere near the middle is probably about right.
Fair value is one thing, a margin of safety is another given the impending threat of Omricon so that's gets me back to about $2.50 as a possible reentry price. If it doesn't get back down there I'm not going to lose sleep over it that's for sure !

[Waltzing]

"December sales were up 3% "

will be interesting to see where the Black hole is for earning to be 40% down full year.

If this was to transpire than the stock is a short.

A very detailed inspection of the next audited report is required.

A young legal beagle once said to me before she shipped out to oxford, just the facts.

Made for some very boring dinners but it was good training for holland and sweden.

[winner69]

Omicron not far away from disrupting NZ they say

Hope TWG don't suffer as much as this dismal tale from Wesfarmers about Kmart and Target

Trading conditions improved as restrictions eased during the second quarter of the 2022 financial year, but
customer traffic to stores was impacted by rising community transmission of COVID-19 in some states,
particularly during the Christmas trading period. Ongoing global supply chain disruptions were well
managed during the period as a result of investments made to hold additional inventory domestically, but
high levels of COVID-related absenteeism in New South Wales and Victorian distribution centres impacted
the ability to deliver stock to stores in line with customer demand.

and then when Omicron hit

Recent retail trading conditions

As a result of increasing cases of the COVID-19 Omicron variant in some states, retail trading conditions weakened in the last two weeks of the 2021 calendar year, and customer traffic to stores has remained subdued during the first half of January.

Team member absenteeism associated with the COVID-19 Omicron variant has placed additional pressure on distribution centres and stores in some states, necessitating a reduction of trading hours in some stores and impacting supply chain productivity and stock availability. These issues are expected to persist while COVID-19 cases and the number of team members requiring to isolate remain elevated.

Link -(may not work as from stockie
https://stocknessmonster.com/announcements/wes.asx-6A1072414/

[Waltzing]

Winner, makes a certain other retailer look pretty good.

[winner69]

Winner, makes a certain other retailer look pretty good.

That certain other retailer saw a sales decline in Australia same period ...assuming my guess as to ther retailer is correct

[Waltzing]

Stand corrected the result was 2nd QTR.

[Balance]

https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/
Now the market, analysts and investors seem to have had time to fully digest this we have observed the average analyst forecast declining from $126m to $109m, a 13.5% reduction and a share price drop from ~ $4.00 to $3.46, also a commensurate 13.5% reduction. Efficient market hypothesis looks alive and in good health to me.

I'm sticking with $90m and think the fair value is therefore considerably lower than the current share price, about 17% down from here ($2.85) although arguments for it being $2.50 - $3.20 have been made by me before my sense is somewhere near the middle is probably about right.
Fair value is one thing, a margin of safety is another given the impending threat of Omricon so that's gets me back to about $2.50 as a possible reentry price. If it doesn't get back down there I'm not going to lose sleep over it that's for sure !

First downgrade.

Let’s see if the adage that downgrades come in threes eventuate with WHS this time round.

[Jantar]

It hit my stop-loss value and I got out at $3.50, keeping just 500 shares as an interest. Looks like I made the right choice as it is still dropping.

I will ask the directors at the ASM why they believed that the shareholders should subsidize government policy by WHS not applying for the wage subsidy when stores were closed.

[Waltzing]

Audited results arnt out yet. How would they know unless they have access to the ledgers and they dont.

[LaserEyeKiwi]

Ok so normally I hold positions for a rather long time (decades in some cases) - but with the warehouse I have the opposite of whatever “diamondhands” is.

Completely folded and sold my entire position this morning.

Decided I was simply too exposed to the NZ retail sector - and to be honest I was also completely spooked by anecdotal data (insert standard “don’t rely on anecdotes” warning). Won’t go into details, but involved my better half and a series of Kmart shopping binges, combined with the conversations with some Australian relatives about the current retail situation over there (empty shelves, no staff, no desire to shop in middle of outbreak) and what that means for the Omicron induced sell-off I am now convinced will happen soon and will hit nearly all the listed NZ retail names hard (might be a better time to pick up some cheap long term holds as I am also confident CV is a temporary issue, but I probably wont re-renter warehouse).

(As usual Beagle was probably right)

[Joshuatree]

All those people who work for Oceania etc for peanuts still have to shop somewhere to make their unlivable wage stretch further.

[Waltzing]

Fair enough LEK the DCB (dead cat bounce) did not last. Will still be interested in the AUDITED results.

You dont want to be too exposed.:scared:

[winner69]

JB Hi-Fi reported NZ Q2 (Oct/Dec) sales down 3.4% on pcp -- follows Q1 (July/Sep) down 6.4%. Half year EBIT was fractionally up so that's good.

Hoe Noel Leeming have done better .... even though NL Q1 (Aug/Sep) were down 12%

[winner69]

Westpac comment (after property market numbers today) -

We’ve been forecasting the housing market to turn to moderate price declines from the second half of this year. However, the timing of that turnaround has always been fluid, and given the scale of the rise in mortgage rates in recent months, it may prove to be earlier than we estimated. That in turn could have implications for the strength of consumer demand this year, and the extent of OCR hikes that will be needed to keep inflation in check.

[Waltzing]

Winner a ton of loans have been knocked back in a Baby and the Bath water tightening and they keep getting the housing market wrong even after loop holes have evaporated.

Its the house hold balance sheets that matter and Balance sheets across the western allies are in much better state than in the GFC. Its not a GFC.

[winner69]

Jeez - petrol might be 3 bucks plus soon

That will put a dampener on retail spend ....even if household balance sheets are in a good state;)

[Waltzing]

Winner that means the virus wont travel as much unless they start taking the bus like in europe.

Petrol up and supply chain freight charges up.

[stoploss]

Jeez - petrol might be 3 bucks plus soon

That will put a dampener on retail spend ....even if household balance sheets are in a good state;)

Whatever happened to that "petrol price" review .... Jacinda just happy to keep getting more GST the higher the price goes .......

[BlackPeter]

Jeez - petrol might be 3 bucks plus soon

That will put a dampener on retail spend ....even if household balance sheets are in a good state;)

Sigh - I see, petrol up, interest rates up, consumer fears up, retail down. Right?

What I don't understand is - why will all of these things hit the Warehouse group fully and unprotected, while HLG (if I believe the tune in the respective thread) will do amazingly? It is the same consumers, just that HLG has as well huge Australia (Omicron) exposure ... maybe Omicron is really good for retail?

What I don't understand either ... why are companies like Turners and Colonial doing so nicely - are they not dependent on the same consumer dollar? Are consumers keeping their e-bike dollars (Torpedo 7) back while they spend like crazy for their next preloved car from TNR?

Still more difficult to understand is why companies like AIR and THL are doing so fantastically given subdued consume and no travel likely over the next year either.

It is just all a bit confusing, isn't it? But maybe everybody just seeing the thing they want to see ...

[Balance]

Sigh - I see, petrol up, interest rates up, consumer fears up, retail down. Right?

What I don't understand is - why will all of these things hit the Warehouse group fully and unprotected, while HLG (if I believe the tune in the respective thread) will do amazingly? It is the same consumers, just that HLG has as well huge Australia (Omicron) exposure ... maybe Omicron is really good for retail?

What I don't understand either ... why are companies like Turners and Colonial doing so nicely - are they not dependent on the same consumer dollar? Are consumers keeping their e-bike dollars (Torpedo 7) back while they spend like crazy for their next preloved car from TNR?

Still more difficult to understand is why companies like AIR and THL are doing so fantastically given subdued consume and no travel likely over the next year either.

It is just all a bit confusing, isn't it? But maybe everybody just seeing the thing they want to see ...

Competition & market positioning - two of WHS weak points.

[Beagle]

Sigh - I see, petrol up, interest rates up, consumer fears up, retail down. Right?

What I don't understand is - why will all of these things hit the Warehouse group fully and unprotected, while HLG (if I believe the tune in the respective thread) will do amazingly? It is the same consumers, just that HLG has as well huge Australia (Omicron) exposure ... maybe Omicron is really good for retail?

What I don't understand either ... why are companies like Turners and Colonial doing so nicely - are they not dependent on the same consumer dollar? Are consumers keeping their e-bike dollars (Torpedo 7) back while they spend like crazy for their next preloved car from TNR?

Still more difficult to understand is why companies like AIR and THL are doing so fantastically given subdued consume and no travel likely over the next year either.

It is just all a bit confusing, isn't it? But maybe everybody just seeing the thing they want to see ...

Its simple enough to understand that people have finished with "nesting" expenditure and want to get out and about more and look good doing it.
Doubt there's many big screen T.V's been sold at Noel Leeming now.

[Waltzing]

They may not be out and about for long but.. but... a 35 to 40 percent hit to ebit ?

The longer the summer goes on with no Bug about the lower the retail spend should be except buckets, spades and sun block.

Auckland private school swim teams seen in the wakatoo at out door 50 meter pools doing summer swim squads..

Country is out doors for sure.

[BlackPeter]

Its simple enough to understand that people have finished with "nesting" expenditure and want to get out and about more and look good doing it.
Doubt there's many big screen T.V's been sold at Noel Leeming now.

Well, I don't know about Noel Leeming, but I bought last month a new LapTop through the market and this month a new bike from torpedo 7 ... and hey, they have been pretty busy ... :):

I guess it is what one sees ...

[Waltzing]

Lets see the detail in the AUDITED reports.

[Beagle]

They may not be out and about for long but.. but... a 35 to 40 percent hit to ebit ?

Doubling down on the tens of millions annually spent on themarket.com... What could possibly go wrong... ;)

[winner69]

BP - punters will still spend but spending may be rather subdued

Retailers (TWG included) hate it when sales are even 'flat', let alone declining..... they moan and groan etc etc. Flat sales usually mean profits down

Don't forget that this century total retail sales have never declined on an annual basis so we'll be OK .... profits might be down though

[Beagle]

Well, I don't know about Noel Leeming, but I bought last month a new LapTop through the market and this month a new bike from torpedo 7 ... and hey, they have been pretty busy ... :):

I guess it is what one sees ...

I see $111m down to ~$40m.

[Balance]

BP - punters will still spend but spending may be rather subdued

Retailers (TWG included) hate it when sales are even 'flat', let alone declining..... they moan and groan etc etc. Flat sales usually mean profits down

Don't forget that this century total retail sales have never declined on an annual basis so we'll be OK .... profits might be down though

Do you have a chart of WHS's sales & margins over the years?

All I can recall about WHS is that post 2008, its performances have been in fits and starts with no consistency.

Saving grace for the company has been its substantial property assets which have been sold down via sale & leaseback arrangements to bolster the balance sheet and pay dividends.

[BlackPeter]

Lets see the detail in the AUDITED reports.

You sure you want to wait for the AUDITED reports? They only audit them for full year, which means publication end of September. You are a patient man :):

Personally I would be already quite happy with the (unaudited) HY information, but even that is still 10 weeks or so away.

Do you propose a trading halt until we see the audited information? Otherwise I am afraid we just need to keep guessing ...

[cymonger]

Its simple enough to understand that people have finished with "nesting" expenditure and want to get out and about more and look good doing it.
Doubt there's many big screen T.V's been sold at Noel Leeming now.

And yet here is a Beagle's (month's long) take before.

Well said, I couldn't agree more. $9 Billion a year that used to be spent on international travel is going to be spend somewhere and a fair portion of that will be on retail generally and specifically new outdoor experiences that embrace the great outdoors in N.Z. (Torpedo 7).


Beagle told us after the last post-covid period that people would be spending all that money on outdoor equipment!!!

He also told us how awesome themarket was and how excited he was about WHS and their digital platform.


SO yes, "It is just all a bit confusing, isn't it? But maybe everybody just seeing the thing they want to see."

[winner69]

Do you have a chart of WHS's sales & margins over the years?

All I can recall about WHS is that post 2008, its performances have been in fits and starts with no consistency.

Saving grace for the company has been its substantial property assets which have been sold down via sale & leaseback arrangements to bolster the balance sheet and pay dividends.

Always found this chart interesting - Red Sheds sales growth v total retail

Generally they don't keep up with overall spend .... ie lose share .... even last year which was a boomer of a year

[BlackPeter]

I see $111m down to ~$40m.

Absolutely - this is one part of the story, but it might not be the full story. They say markets are forward looking.

[Waltzing]

" publication end of September"

yep...its when everything is Dug up.

the next result set will show there maybe a black hole but the real picture on how bad it could be wont be until full year. Then the real future picture will be weather (winter weather) 2.50 is in fact baked in.

IE> Mr B's call that theMarket is a black hole.

[winner69]

Absolutely - this is one part of the story, but it might not be the full story. They say markets are forward looking.

..... and market at moment saying future not as good as it has been recently .... yes?

[BlackPeter]

..... and market at moment saying future not as good as it has been recently .... yes?

True, but market sometimes right and sometimes wrong :):

[Beagle]

Chart tells an interesting story....broken down through all supports. Fight the technical's at your peril...took me a long time to learn that lesson.

[Sideshow Bob]

I bit the bullet and sold out last WHS shares on the day of the recent downgrade. Had a decent run as a short-term thing.

Was lightening the load anyway at $4.10-4.15. Managed to sell the last at $3.69 that day, which at this stage looks pretty good......:sleep:

Few headwinds out there, and end of the day, it is the Warehouse.

[winner69]

Chart tells an interesting story....broken down through all supports. Fight the technical's at your peril...took me a long time to learn that lesson.

Still above 200EMA so no worries -- that's the key indicator ..... think its about 280 at the moment

[Waltzing]

The last technical band is 2.35 to 2.40 May JUL 2021.

[bull....]

looks like all retailer shine is starting to come off now. i see jb yesterday sales update nz sales down for the current quarter 3 - 4 %

[Waltzing]

Outdoor retail clothing should take off next 2 years as virus is slowly dampen down. Next summer HLG and Rip Curl.

[LoungeLizzard]

When the macro-economic winds start to blow, the Red Sheds are the first to get flattened...

[see weed]

It is due to go ex div in about 11 weeks. Last April div was 13c which is about 9% yld for the last year. Maybe a slightly less div this April but still a good yld.

[LoungeLizzard]

It is due to go ex div in about 11 weeks. Last April div was 13c which is about 9% yld for the last year. Maybe a slightly less div this April but still a good yld.
A 13c dividend in 11 weeks time isn't much to look forward to if the SP has gone down 50c in that time.

[see weed]

A 13c dividend in 11 weeks time isn't much to look forward to if the SP has gone down 50c in that time.
That is right. Divie hunters (me) should hold off for a while and see how low sp goes and get in before the div rush.

[Beagle]

That is right. Divie hunters (me) should hold off for a while and see how low sp goes and get in before the div rush.

Hi mate, how's things ?
Just giving you a heads up that their divvy policy is to pay out not less than 70% of underlying profit for the year.
~ $40m profit = about 11.6 cps earnings for this half so 70% of that is 8 cps. I think given the uncertainties and potential near term threats to the business with Omricon and the significantly diminished cash position they are most likely to be in compared to the previous full year result (see an earlier post rough estimate for cash on hand at the pending interim report date I made a few days ago), the interim dividend will be right at the bottom of the 70% minimum limit, i.e. 8 cps, maybe 9 cps if you're lucky.

If they make $90m for the year that's 26 cps and 70% of that is 18.2 cps, possible estimate for the final dividend for FY22 is 10 cps. Grossing that up for imputation credits = 18.2 / 0.72 = 25.27 cps and on the current share price last time I looked of $3.41 that gives a gross prospective annual yield of 7.4%

Worth trying to dividend strip divvies of that size or hold for the gross yield ?, you be the judge.

[see weed]

Hi mate, how's things ?
Just giving you a heads up that their divvy policy is to pay out not less than 70% of underlying profit for the year.
~ $40m profit = about 11.6 cps earnings for this half so 70% of that is 8 cps. I think given the uncertainties and potential near term threats to the business with Omricon and the significantly diminished cash position they are most likely to be in compared to the previous full year result (see an earlier post rough estimate for cash on hand at the pending interim report date I made a few days ago), the interim dividend will be right at the bottom of the 70% minimum limit, i.e. 8 cps, maybe 9 cps if you're lucky.

If they make $90m for the year that's 26 cps and 70% of that is 18.2 cps, possible estimate for the final dividend for FY22 is 10 cps. Grossing that up for imputation credits = 18.2 / 0.72 = 25.27 cps and on the current share price last time I looked of $3.41 that gives a gross prospective annual yield of 7.4%

Worth trying to dividend strip divvies of that size or hold for the gross yield ?, you be the judge.
Hi Beagle. Happy new year. Thanks for that info. A dozen oysters for you at next meeting.:)

[winner69]

Love Tom's cartoons -- always on point

Take note Nick - ..... there’s a risk of marketing myopia. From inside your mind and the minds of your marketing team, it can be easy to imagine that consumers are just waiting to “mingle freely” with your brand. Typical marketers sometimes over-inflate just how much people think about brands or want to engage with them.

Fun though eh Nick ..... if there's hype you have to join in

[Waltzing]

Dont you just live for days like these winner?

Back office running like a dream, almost asleep whatching CNBC... Maco coffee in hand... better do some swim training later. bit too wet to test out the new blades.

Its the ME Verse...A new marketing manager in an accounting firm in hamilton last year, short skirt and high heels.

Never thought id see the day....

ME Verse.

[winner69]

Dont you just live for days like these winner?

Back office running like a dream, almost asleep whatching CNBC... Maco coffee in hand... better do some swim training later. bit too wet to test out the new blades.

Took the dogs out earlier .... the greyhound needs some swim training .... he a country boy who probably never seen the sea before lol

[Waltzing]

"Took the dogs out earlier .... the greyhound needs some swim training"

perfect day then....:t_up:

WHS bouncing back in afternoon trade.

[Beagle]

Hi Beagle. Happy new year. Thanks for that info. A dozen oysters for you at next meeting.:)

You're welcome mate. $2.50 would give a 10% gross yield if they can make $90m this year.

[Waltzing]

WHS not hammered as much as BRIS.

[winner69]

WHS not hammered as much as BRIS.


I think there’s a reason why ……Briscoes next update might tell us why.

[Waltzing]

Yes winner but the consumer is BRIS only black hole and should recover in next 12 months. Where as question mark remains over WHS.

It will be interesting to see how this unfolds.

[Waltzing]

The wobbly house now 3.25.... breaks below 3 dollars and it starts to get very interesting.

[LoungeLizzard]

Yes winner but the consumer is BRIS only black hole and should recover in next 12 months. Where as question mark remains over WHS.

It will be interesting to see how this unfolds.

It's a generalisation, but Briscoes customers are more middle class, WHS more working class. And as we all know it is the working class who tend to suffer more and spend proportionately less when times get tough. Which they are about to...

[Beagle]

The wobbly house now 3.25.... breaks below 3 dollars and it starts to get very interesting.

Go back to early October in this thread and have a look at the flak I took for daring to call the top at ~ $4.10. Even sold heaps of shares the same morning the CEO was buying them so he probably bought mine lol. Some newbies on here thought the wily old dog was just a young pup who came down in the last shower and knew nothing. Bet they wished they'd listened to my barking now eh ;)

Wait for $2.50 is my call now.

[Waltzing]

If its not a multi currency retail share its higher risk...

even if there is a big hole in the market it will get sold off and a rebuild at some years hence..The person's who throw the money in to the black hole will leave and another re org will start.

history repeating...

[LoungeLizzard]

[QUOTE=Beagle;937816]Go back to early October in this thread and have a look at the flak I took for daring to call the top at ~ $4.10. Even sold heaps of shares the same morning the CEO was buying them so he probably bought mine lol. Some newbies on here thought the wily old dog was just a young pup who came down in the last shower and knew nothing. Bet they wished they'd listened to my barking now eh ;)

At the end of September you said:

"$5 before Christmas 2021 and $7 before Christmas 2022 and also NZX50 inclusion in 2022, I called it first :D"

But hey, things can change from one month to the next. Especially if it's WHS...

[Rawz]

Go back to early October in this thread and have a look at the flak I took for daring to call the top at ~ $4.10. Even sold heaps of shares the same morning the CEO was buying them so he probably bought mine lol. Some newbies on here thought the wily old dog was just a young pup who came down in the last shower and knew nothing. Bet they wished they'd listened to my barking now eh ;)

Wait for $2.50 is my call now.

I listened to you Beagle, got out.. but only after i banked that juicy dividend ;)

[Onion]

Go back to early October in this thread and have a look at the flak I took for daring to call the top at ~ $4.10. Even sold heaps of shares the same morning the CEO was buying them so he probably bought mine lol. Some newbies on here thought the wily old dog was just a young pup who came down in the last shower and knew nothing. Bet they wished they'd listened to my barking now eh ;)

Wait for $2.50 is my call now.

I listened Beagle. Sold at $4.07. Thanks.

Can you now provide similar guidance across all other NZ listed shares. :D

[winner69]

From an 'investor' point of view (as opposed to a trader).if you hold for a year or more the chances are that you will end up losing (including dividends) .... based on buying in July

[dameofdiv]

Go back to early October in this thread and have a look at the flak I took for daring to call the top at ~ $4.10. Even sold heaps of shares the same morning the CEO was buying them so he probably bought mine lol. Some newbies on here thought the wily old dog was just a young pup who came down in the last shower and knew nothing. Bet they wished they'd listened to my barking now eh ;)

Wait for $2.50 is my call now.

I also listened and got out :D

[see weed]

Go back to early October in this thread and have a look at the flak I took for daring to call the top at ~ $4.10. Even sold heaps of shares the same morning the CEO was buying them so he probably bought mine lol. Some newbies on here thought the wily old dog was just a young pup who came down in the last shower and knew nothing. Bet they wished they'd listened to my barking now eh ;)

Wait for $2.50 is my call now.
Good call Beagle. I see lots of beers and oysters coming your way at the next st meeting for all your wonderful calculations and predictions. If all the people who have had good fortune from Beagles postings, I can see Beagle will not have to pay for anything for the next 3 or 4 meetings:t_up:. Getting back to WHS, I will be buying back in from 2.40 to $2.80 more or less.

[winner69]

Jeez beagle …..WHS down 21% from your sell price

Nick needs the share price to up 28% to break even on those shares he bought off you.

[Habits]

It's a generalisation, but Briscoes customers are more middle class, WHS more working class. And as we all know it is the working class who tend to suffer more and spend proportionately less when times get tough. Which they are about to...

Employment levels up, wages up, benefit payments up, inflation up, stock price down. Potent mix.

[Habits]

Investors Lose Appetite for Stocks of Unprofitable Companies - WSJ
https://www.google.com/amp/s/www.wsj.com/amp/articles/investors-lose-appetite-for-stocks-of-unprofitable-companies-11643106602

[winner69]

Investors Lose Appetite for Stocks of Unprofitable Companies - WSJ
https://www.google.com/amp/s/www.wsj.com/amp/articles/investors-lose-appetite-for-stocks-of-unprofitable-companies-11643106602

WHS not unprofitable ..... .just a low margin retailer but make profits every year

[LaserEyeKiwi]

Yes I didn’t see the relevance - Warehouse generates tens of millions in net profits every year, average for last 6 years is $59 million net income.

Unless Habit was posting in reference to investors here may start heading for profitable companies like the warehouse?

[see weed]

Looks like buyers are getting excited around the 3.10 to 3.12 mark.

[Beagle]

Looks like buyers are getting excited around the 3.10 to 3.12 mark.
Not putting a paw up for these until good value emerges in the mid $2's.
13448

[Habits]

Investors Lose Appetite for Stocks of Unprofitable Companies - WSJ
https://www.google.com/amp/s/www.wsj.com/amp/articles/investors-lose-appetite-for-stocks-of-unprofitable-companies-11643106602

Agreed Winner Whs profits are still good but less than previous. Investors have reacted decisively and sold it off. And not that long ago Beagle was pumping a 5 plus handle, now sadly a memory.

[nztx]

Not putting a paw up for these until good value emerges in the mid $2's.
13448


I'm with you there :)

[Waltzing]

until a comprehensive picture emerges its a no go at any price im afraid. once a clearer picture emerges its a gamble at any price above 2.20.

Simply because its a one currency stock and this govt could not organise a drinking game in the beer festival.

There are too many policy settings that are not pro market. The percentage of GDP that is not government and local government related means the economy relies of high community prices to balance debt.

Long term it means there is simply not enough clarity on the structural balances of the economy to buy single currency stocks.

[winner69]

WHS by far worst performer of main retail stocks on NZX

Current price off recent highs

WHS -26%
BGR -16%
MHJ -8%
HLG -15%

And I thinkWHS has got further to fall

[Rawz]

WHS by far worst performer of main retail stocks on NZX

Current price off recent highs

WHS -26%
BGR -16%
MHJ -8%
HLG -15%

And I thinkWHS has got further to fall

MHJ still the goods aye Winner. The market loves diamonds

[winner69]

MHJ still the goods aye Winner. The market loves diamonds


MHJ been out of step for a while .... they'll catch up soon .... after next announcement

[Beagle]

WHS by far worst performer of main retail stocks on NZX

Current price off recent highs

WHS -26%
BGR -16%
MHJ -8%
HLG -15%

And I thinkWHS has got further to fall

How many more years do you think before Nick gives up on the black hole that is themarket.com ?
Remember how expansion into Australia was going to be all the rage ?
Remember after that when it was their consumer finance division was going to drive huge profit growth ?
Both these foray's turned out to be very, very expensive failed experiments.

Latest experiment has huge potential to eat up vast amounts of money before they give up on that too.
I think the evidence that despite huge investment in its second year the platform went backwards quite badly is very ominous for the future but pride will prevent him from any near term recognition that this isn't working and they'll keep throwing tens of millions per annum down that rat hole for quite a few more years.

[LaserEyeKiwi]

How many more years do you think before Nick gives up on the black hole that is themarket.com ?
Remember how expansion into Australia was going to be all the rage ?
Remember after that when it was their consumer finance division was going to drive huge profit growth ?
Both these foray's turned out to be very, very expensive failed experiments.

Latest experiment has huge potential to eat up vast amounts of money before they give up on that too.
I think the evidence that despite huge investment in its second year the platform went backwards quite badly is very ominous for the future but pride will prevent him from any near term recognition that this isn't working and they'll keep throwing tens of millions per annum down that rat hole for quite a few more years.

The warehouse is NZs biggest online retailer - it makes sense for them to try and defend that position with new online initiatives.

[BlackPeter]

How many more years do you think before Nick gives up on the black hole that is themarket.com ?
Remember how expansion into Australia was going to be all the rage ?
Remember after that when it was their consumer finance division was going to drive huge profit growth ?
Both these foray's turned out to be very, very expensive failed experiments.

Latest experiment has huge potential to eat up vast amounts of money before they give up on that too.
I think the evidence that despite huge investment in its second year the platform went backwards quite badly is very ominous for the future but pride will prevent him from any near term recognition that this isn't working and they'll keep throwing tens of millions per annum down that rat hole for quite a few more years.

Hmm - you are writing this as if you know the business better than they do. Are there any new stats you have seen confirming your claims?

As a customer I must say I am using "the market" over the last 3 to 4 months much more frequently than I used to ... and so far I found the delivery prompt and the products as per description - and I am not referring to products just channelled through from the red sheds.

Saves me a lot of driving into town. I like to avoid driving into town these days ...

They sell as well a lot of stuff from smaller companies I otherwise would have ignored on the internet ... including some overseas shops. Again - the service works, if there are any issues (I didn't had any, but you never know ...), you are dealing with a NZ company and I find delivery quite fast. Sometimes it is order today, get your stuff tomorrow, and in most cases it was less than one week for delivery.

Maybe we should give them a chance before we get used to the trashing ...

[Beagle]

I posted an analysis of first and second year performance of themarket.com a while back, both heavy top line sales decline and poor acceleration of losses in its second full year of operations to FY21. What is damming is that performance in its first year FY20 was for much of that year without Covid so you would expect that with all of FY21 being impacted by Covid and the well known very strong growth in online sales, top line growth in the market would have been very strong in FY21 not the exact opposite, going backwards quickly.

There will be no new confirming date until the release of their half year results.

All I can say is that every other retailer out there has posted exceptionally strong growth in online sales in FY21 and yet WHS did the exact opposite and the market.com showed very strong sales decline in FY21. These are annual total sales and losses facts mate, not anecdotal personal evidence from one user.

Surely any reasonable person would be seriously concerned by the market going backwards when every other retailer is enjoying strong growth ?

We're not talking about chump change here either.. the market.com burned through over $20m of losses in FY21 ! That's a pretty sizeable gamble on a strategy that currently isn't working and going backwards in my books.

Yet Nick commented recently that he's ostensibly doubling down on his metaverse strategy. Hmmm...the size of the gamble looks reckless to me but I guess that's what you would expect from a company that threw away $60m+ paying back a wage subsidy just to kowtow to the Govt and appear to be good from an ESG perspective.

Nick appears to have total myopic vision when it comes to his obsession with all things ESG, (how did that work out for Synlait ;) ),and all things metaverse...that's how I'm calling it. If I'm wrong so be it but I seem to be doing okay so far having sold him my shares at $4.10 ;)

[winner69]

I think Nick is the only person who actually knows what TheMarket.com turnover actually is. Surely its more the $4.7m (taking out 1-day sales) as shown in the AR

Their reporting of such things is far from transparent

The revenue figure attributed to TheMarket in the AR i gather is their cut on sales sourced from external brands and then report 1-day sales.

I gather that TheMarket and TWG online sales share the same IT platform .....maybe it is a very expensive platform for what it does

From their AR and Presentations numbers shown below .... make what you want of them

LEK will remind us that $393m of online sales makes TWG NZ's biggest online retailer in value .... probably correct ....but others would point out that 11% of total sales being online isn't that great compared to other retailers

[BlackPeter]

@beagle ...

Fair enough ... I guess time will tell.

I do see that the introduction and improvement of the market does cost money ... I think they call this an investment. Just noted that their service and offer actually did improve as well. Whether this is just my impression, the coming financials will tell.

No doubt - the investment into the market is not cheap, and the website is not yet perfect. Compared to the HLG website (which clearly offers much more sexy and colourful pictures) do they appear quite grey and boring.

On the other hand ... it might be not be just me with a limited demand for buying minute bikinis :p ; So much more useful stuff on the market ...

Anyway - Just had a look how bad the WHS share price really did over the last 2 years: You are right - it went up only a measly 15% (the blue line in the chart below), while HLG rocketed in the same time frame up by 7.5% (the orange line). Dividend yield for both companies (at current SP and this years dividends) is not bad (HLG 7.2%, though WHS @ 8.4% is better :) ;

13451

Sorry - I could not resist ...

[Rawz]

Kogan market place going pretty good. They know how to run an online marketplace unlike WHS?

● Kogan Marketplace continued its rapid scaling, achieving more than $200million ($221.1 million) in Gross Sales in the half for the first time ever, up 28.7%YoY.

Time WHS follows Beagles advice and give up on it

[BlackPeter]

Kogan market place going pretty good. They know how to run an online marketplace unlike WHS?

● Kogan Marketplace continued its rapid scaling, achieving more than $200million ($221.1 million) in Gross Sales in the half for the first time ever, up 28.7%YoY.

Time WHS follows Beagles advice and give up on it

Not quite sure the market agrees with your statement (if we take a 2 year horizon - about the time the WHS market exists):

13454

I must however admit that the ride using using KGN (yes, the orange line) looks much more exciting - sheesh - all this adrenalin .... looks a bit like bungee jumping!

Both companies are building up a virtual market place ... and Kogan clearly created much more hype - followed by much more disappointment. Is this really better?

[Muse]

Not quite sure the market agrees with your statement (if we take a 2 year horizon - about the time the WHS market exists):


I must however admit that the ride using using KGN (yes, the orange line) looks much more exciting - sheesh - all this adrenalin .... looks a bit like bungee jumping!

Both companies are building up a virtual market place ... and Kogan clearly created much more hype - followed by much more disappointment. Is this really better?

Kogan as a stock is all over the place. But their ownership of Mightyape should give WHS and themarket pause for thought. That company is beloved by its customers with reviews to boot, has superb archituture and its distribution and fullfillment are topclass. What's more, it's profitable. WHS' investment in themarket looks most unwieldy, unlimited and with no apparent KPI focused outcomes. Customer reviews are poor, nothing special about the range, deliveries are spotty as looks to use lots of drop shippers. I doubt with 5 years of $10m per annum they could build half the business that mightyape is. Looks like a cash bleeding blackhole to me. I've only ordered once from themarket (and also the warehouse) which was sufficient for me to just order anything I can get from them, from mightyape or amazon.

NZ is just too small and there are too many competitors for themarket to turn into the amazon of nz.

its the flyingpig v2....

[Beagle]

Well said F.M. The risk is 5 years of $30-$40m losses as Nick won't want to lose face by giving up too early.

[LaserEyeKiwi]

What is damming is that performance in its first year FY20 was for much of that year without Covid so you would expect that with all of FY21 being impacted by Covid and the well known very strong growth in online sales, top line growth in the market would have been very strong in FY21 not the exact opposite, going backwards quickly.



in the last 5 months covered by their last trading update, online sales across the warehouse group have increased 105% year on year.

[Beagle]

in the last 5 months covered by their last trading update, online sales across the warehouse group have increased 105% year on year.

What we don't know is how much of that is the Warehouse platform and how much is the market ? Yet profitability is down from $111m to estimated $40m. How much investment has Nick been throwing at the market platform ? Interim accounts will be interesting assuming they disclose enough information.

[winner69]

in the last 5 months covered by their last trading update, online sales across the warehouse group have increased 105% year on year.

That 105% increase for the 5 months was about taking online sales from $129m in F21 to $264m this year ..... HUGE

still doesn't tell us how much TheMarket sales were ...... maybe they'll report $5m revenues in first half?

[Beagle]

how is this for a marketing strategy?

the market spends huge money on google shopping ads on a large majority of their products (pay per click). The warehouse group also spends big money on these ads accross all their businesses. Google then bids up the pricing

They are effecitvely bidding against themselves on a huge amount of product!!! And in some cases if the customer clicks on both the market link and the warehouse link, they are paying 2 x the cost of that ad.

Now, im no rocket scientist but it doesnt take much to realise that this madness will not be helping either business bottom line.

Sure, top line sales will increase, but so to will the loss on the bottom line

“Turnover is vanity, profit is sanity”

Well said. Think I read somewhere recently the price of google adds has tripled in recent times. No worries, more money is sure to fix this so Nick will keep throwing heaps more at it thinking that's a guaranteed strategy for success...so what could possibly go wrong ;)

[Waltzing]

Most of this last 24 months was supported by GDP brought forward. That support is now going to come from where? Which honey pot is the distributor of support coming from now? The minister of Financial Wizardry cant say another other than dont panic. But they have to keep the sugar coming from somewhere in the little kingdom.

ON line will grow no doubt because everyone is back in the HUT.

[mcdongle]

Also have to think about things like this looking foward.

Many households could see their mortgage interest rates double when they re-fix their mortgages, according to property data company CoreLogic.

And the new tax for unemployment which i think i read could be 2 or 3%

Consumer is going to be squeezed.....

[BlackPeter]

Also have to think about things like this looking foward.

Many households could see their mortgage interest rates double when they re-fix their mortgages, according to property data company CoreLogic.

And the new tax for unemployment which i think i read could be 2 or 3%

Consumer is going to be squeezed.....

True ... but "squeezed" consumers still need to buy stuff - and where better to go than to the place where everybody gets a bargain?

[Muse]

True ... but "squeezed" consumers still need to buy stuff - and where better to go than to the place where everybody gets a bargain?

Kmart.

Kmart is awesome.

[Beagle]

Kmart.

Kmart is awesome.

Mrs B is a very canny shopper...the Scottish bloodline in her...and tells me exactly what you've just said. K Mart is the real place where everyone gets a bargain. She very seldom bothers with the Warehouse. I sometimes shop at the Warehouse because they have cheap clothes that fit fat dog's lol

[winner69]

True ... but "squeezed" consumers still need to buy stuff - and where better to go than to the place where everybody gets a bargain?

Interesting that when retail market is 'weak' (growth rate slows but never goes below zero) the Red Sheds sales do go backwards

Red Sheds OK in tough times a fallacy .... but this time its different so no worries

[mcdongle]

Mrs B is a very canny shopper...the Scottish bloodline in her...and tells me exactly what you've just said. K Mart is the real place where everyone gets a bargain. She very seldom bothers with the Warehouse. I sometimes shop at the Warehouse because they have cheap clothes that fit fat dog's lol

I went to the warehouse to buy my annual garden tracksuit bottoms. last year $10 this year $15 will make do with the old ones... :)

[Habits]

I went to the warehouse to buy my annual garden tracksuit bottoms. last year $10 this year $15 will make do with the old ones... :)

Holey track pants Batman. Pity about the wasted trip

[BlackPeter]

Interesting that when retail market is 'weak' (growth rate slows but never goes below zero) the Red Sheds sales do go backwards

Red Sheds OK in tough times a fallacy .... but this time its different so no worries

.... and I am sure you have as well the data to show that?

Interesting to note that The Warehouse Group had over the last 10 years a revenue CAGR of 7.4% and an earnings CAGR of 3.1%.

However - if we look into the future (well, I know, I use as well analysts predictions when I like them ;) , the forward revenue CAGR shrinks to 2.6, while the forward earnings CAGR grows to 7.6.

Lower revenue growth and higher earnings growth to come ... clearly - the analysts don't read this thread :p;

[BlackPeter]

What we don't know is how much of that is the Warehouse platform and how much is the market ? Yet profitability is down from $111m to estimated $40m. How much investment has Nick been throwing at the market platform ? Interim accounts will be interesting assuming they disclose enough information.

Actually - it is not hard to find out what the market did cost the warehouse group. Have a look at slide 25 of their 2021 investors presentation

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/379961/355769.pdf

I guess what I don't get is how it is possible that grown up accountants don't seem to understand that the Market is the Internet sales and marketing platform of the Warehouse group ... and propose to drop this tool.

Of course is an internet platform costing money - no issue if the rewards (i.e. increased revenue and earnings over time) are larger than the cost for the respective platform.

Maybe we should now propose for Amazon, Kogan and HLG to close down their respective Internet platforms as well (actually both Kogan and HLG show currently as well some weaker numbers - must be the immense cost of their sales platforms ...) - just close your eyes and dream how many dollars they could save that way :p ;

[Beagle]

https://www.thewarehouse.co.nz/
https://themarket.com/nz/
Looks like two separate websites to me....but who knows maybe they're intergrated in the back office somewhere.
I've already taken note of page 25...and the losses from the market in its second year are well up on its first year as noted therein. Turnover is well down.
Based on WHS own presentation numbers themarket is shinking in size and losses are expanding in the middle of a Covid epidemic when online sales growth is going ballistic...surely that would worry any reasonable investor ?

Meanwhile HLG are growing their online sales and not losing money on their online platform. ;)

No worries mate, I am sure this year will be different and with Nick doubling down on his investment in the market the ~$40m loss will drive huge future profit...what could possibly go wrong and if it does they could always double that spend to $80m the following year, surely that would be a guaranteed success story and on the off chance it isn't why not double it again to $180m capex, surely that must work ;)

What would this grown up bean counter know....gosh, maybe just a little bit after selling Nick my shares at $4.10 lol

[bull....]

sold my at 4.24 as posted

[winner69]

BP - TheMarket is a discrete sales and marketing business ... and like you I assume they share the same IT platform as other TWG businesses ....and it appears those other businesses are allocated some (if not most) of the platform costs

Question then is how does TheMarket lose so much money - if you back out the 1-day sales stuff all revenues and that big loss

And I'd hazard a guess that 1-day is separate to TheMarket .... at least 1-day sales are $50m but it seems rather strange they report a loss of $5m

Another point TWG only own 88% of TheMarket

I still reckon it's all so convoluted that only Nick knows what total sales are actually generated through TheMarket and how much it all costs to run .... but then again maybe even he doesn't know

[BlackPeter]

https://www.thewarehouse.co.nz/
https://themarket.com/nz/
Looks like two separate websites to me....but who knows maybe they're intergrated in the back office somewhere.
I've already taken note of page 25...and the losses from the market in its second year are well up on its first year as noted therein. Turnover is well down.
Based on WHS own presentation numbers themarket is shinking in size and losses are expanding in the middle of a Covid epidemic when online sales growth is going ballistic...surely that would worry any reasonable investor ?

Meanwhile HLG are growing their online sales and not losing money on their online platform. ;)

No worries mate, I am sure this year will be different and with Nick doubling down on his investment in the market the ~$40m loss will drive huge future profit...what could possibly go wrong and if it does they could always double that spend to $80m the following year, surely that would be a guaranteed success story and on the off chance it isn't why not double it again to $180m capex, surely there's no chance you can't lose then ;)

What would this grown up bean counter know....gosh, maybe just a little bit after selling Nick my shares at $4.10 :p

If you look at the growth rates they claim for the market (page 23 of their annual report) and compare that to the meagre revenue they assign to it in their books, than it is probably fair to assume that most of the revenue as well as the earnings they make through purchases facilitated by the market show up allocated to the individual companies.

I don't know how they internally calculate the fees The Market is charging to the other companies in the Warehouse group, but suppose that some cross subsidizing happens.

Do you know? Without this information is it pretty tough to assess whether the market is a sensible investment for the Warehouse group or not, isn't it?

The only thing we know about it are the costs allocated to it and some revenue numbers which clearly don't reflect the total value of the goods going through this platform. But hey, this is still more than we know about the Internet sales and marketing platforms of any of the other Retailers. So, how can we say that the Market is in comparison a bad investment for the Warehouse group if we know only half of the story for the Warehouse group but still less about any comparable platform?

[winner69]

TWG quarterly sales update don't include TheMarket or 1-day sales ..... or the chocolate factory sales

Always thought that a bit weird .... from a transparency point of view

[Muse]

But hey, this is still more than we know about the Internet sales and marketing platforms of any of the other Retailers. So, how can we say that the Market is in comparison a bad investment for the Warehouse group if we know only half of the story for the Warehouse group but still less about any comparable platform?

A good starting point for other retailers with online operations is none of full year presentations have $21 million operating loses in a bar chart next to their online division.
A macro sense check are the margins the warehouse makes. EBIT margins of 2.8% & 8.2% across FY20/21 - briscoes were 19% in FY21. Something is going on and it isn't just relative product mix.

I've been involved with a few retailers over the years its not terribly difficult to establish a good online sales channel. There are plenty off the shelf services and most of our NZX listed retailers do it well and profitably. Same for the many privately owned retailers with strong, growing and profitable online operations.

[Beagle]

BP - We can't know the back office methodologies of how WHS applies cost to various divisions within their company but one would hope they are consistent from one year to another so the decline in top line sales for the market and sharp increase in bottom line loss must be concerning given the operating environment was so much more favorable for online growth in its most recent full year. People will see what they want to see I guess.

I think with WHS is better to zoom out and have a look at the big picture. The only year in the last ten they made decent money they gave all the extra profit back to the Govt kowtowing to ESG pressure. I think that's absolutely ridiculous and contemptuous to shareholders. I had hoped that FY21 was the start of something new...a new chapter if you like and a springboard to bigger and better things for the group. That view I held in 2021 looks far too optimistic now.

[Waltzing]

chart starting to look in free fall... 2.20 surely not... 2.70 next stop..

[winner69]

Nick seem to have gone quiet on the investment in Zoom

Hope it’s going well ….maybe a mention in half year report.

[Habits]

Gains are disappearing faster than a thief into the night.

[Bobdn]

For sure, the sinking NZD won't help. I haven't been to a Warehouse for a couple of years now. I assume they still import most of their goods rather than source them locally? Fuel prices; shipping costs and the exchange rate must be big factors in their business.

[LaserEyeKiwi]

I feel like many havn’t even looked on themarket.com - it doesn’t just sell The Warehouse group inventory, it is also an aggregator of other non-warehouse owned retailers. For instance I purchased a $360 handbag for my better half on there in November from Saben. The transaction was done on themarket.com, but fulfillment was done directly from the Saben store in Auckland.

[Waltzing]

Yes it should be spun off ASAP. WHS can have shares in it if they want and a board seat or 2...

who would even set it up as part of the group except as a stake holder...

if it was profitable of course.

[LaserEyeKiwi]

Oh I have trust me!

They were trying to get my business to go on.

15% commission didnt stack up.

back to the point, if they are operating as the warehouse marketing platform, they have competing lines on there from other retailers, so are cannabilising sales from themselves….

So are they a standalone business or are they the marketing platform for all things WHS?

Can they be both?

There arent many businesses who can pull off having a double personality.

Oh very interesting! Thanks for elaborating a bit on the business model with that 15% commission figure. I wondered how they were able to run sale promotions like they did on singles day and Black Friday where they took 11% off site wide (presumably they are digging into there commission to offer that)

[winner69]

I feel like many havn’t even looked on themarket.com - it doesn’t just sell The Warehouse group inventory, it is also an aggregator of other non-warehouse owned retailers. For instance I purchased a $360 handbag for my better half on there in November from Saben. The transaction was done on themarket.com, but fulfillment was done directly from the Saben store in Auckland.

How much did WHS get out that I wonder …a commission / cut ……part ofvthe $5m revenue they reported.

Suppose disclosing how many zillions of non-WHS merchandise they sell is commercially sensitive

If it is 10% overall (they tried to screw Jim) then about $50m of sales go through.

[Waltzing]

All the contributors make the case for a company to Short.

[alokdhir]

All the contributors make the case for a company to Short.

If only such voices were made when WHS was over $ 4....now its not much left to short ...lol :p

[Waltzing]

"not much left to short"


Gotta say that in these dark days of summer sun the ANZAC spirit abounds...

but its still only at 3 dollars...

Mr B says 2.20...that hound has a sixth sense from a lot of hunts...

[Beagle]

Thanks for those valuable contributions Jimdog, gives great insight into how themarket platform "works".

[winner69]

We shouldn’t really be down on Nick and TWG for creating hyper-personalized customer experiences and reimagining ecommerce.

It’ll all work out in due course

Tough job being CEO of such a business

[Waltzing]

mentioned before there maybe problems bringing together all those businesses and the systems.

the question did each business have its own IT infrastructure and how would it all come together into this new experience?

There was some information about that some conversions were happening and some took longer than expected.

It this black hole an IT blow out?

Developing an in house solution for on line commerce is a big gamble.

Perhaps Amazon API did not provide some of the features they required.

REST API's should allow for data to extracted and reprocessed but bringing together all these businesses looks like an IT nightmare.

[Waltzing]

They need to get it ready to float off but that is a whole new nightmare as WHS is still required to fund the develop deficit...

and as MR B says who wants it? finding a potential new corner stone holder?

[LaserEyeKiwi]

Honestly, what they've built in themarket.com is actually a very efficient, sleek and well built website. Credit where credit is due.

The fundamental issue lies in the fact for them to make money from this platform they need other big retailers in NZ to come on board to get the transactional $$ flowing to get the level of commissions they need.

Therein lies the problem. No other retailer wants their customers data to be captured and handled by the warehouse group (albeit themarket).

That's why if you look through the brands there are almost no big competitors to the Whs group, as the Whs group covers quite a large spectrum of retail via its different mastheads.

I believe themarket.com if sold off from the WHS group could actually be profitable, as then other big retailers may be more likely to get onboard.

Whoever came up with the concept of themarket.com i believe underestimate the lack of buy in it would receive due to Whs affiliation.

I think the goal is too get as many “products/brands” as possible, rather than focusing on other retailers.

For instance there is no reason for them to have to have Harvey Norman, JB Hifi, Smiths City, Briscoes etc on the platform to be successful, rather all they need is to have all the same products that those retailers sell on the platform. All those other retailers are merely aggregators of other brands, so themarket is in direct competition. (Just like Amazon doesn’t have Walmart etc).

The retailers themarket.com really wants are those selling goods that The warehouse group doesn’t stock, either because they are an exclusive to that retailer, or that retailer operates in a different market segment or niche that the warehouse group doesn’t serve (like the Sabin luxury handbag store I mentioned - there is no way you would ever see that in the red sheds).

To be clear: I hold no WHS anymore, for multiple reasons as previously mentioned. I think K-mart is absolutely fantastic at present and slowly gobbling market share from the red sheds, and the red shed product needs a giant shakeup to compete.

WHS is doing very well with the inventory management and implementing new systems etc, and also was a genius move to co-locate Warehouse stationary into Red sheds (which has simultaneously dramatically lowered operating costs, and also significantly lifted sales per sqm for red sheds as its floor space has shrunk by a sizable amount), but the red sheds themselves need a big facelift away from the aisle based layouts, and they need to expand/rethink their home brand product range to be more comparable with the Kmart Anko product range.

[winner69]

Kmart in Australia have a TheMarket.com equivalent -- Catch.com

And in NZ catch.co.nz

Seems to be doing OK

[winner69]

Kmart NZ financials - June years

....... Sales NPAT
2019 567...... 42
2020 600.......36
2021 721.......86

[Waltzing]

"And in NZ catch.co.nz"

????.??.??

[winner69]

"And in NZ catch.co.nz"

????.??.??

This works for me

https://www.catch.co.nz/


I assume its for NZ punters

[Waltzing]

Notice the trackers on each site and which ones they are.

anyway all blocked with privacy software add ons in chrome..

WHS will have to cut commissions or put in places a software discount system depending on your vol sold...

If youve outperformed in sales you get a credit reward system ect..

they are going to have to get software smart and creative.

anyway ive been taken away to design a new blade and software tracking for on water performance...using the new multi platform engine...

not time to solve WHS's convoluted nightmare..

[LaserEyeKiwi]

Kmart NZ financials - June years

....... Sales NPAT
2019 567...... 42
2020 600.......36
2021 721.......86

Yeah I am not surprised - they are building out there store network very fast - wouldn’t be surprised to see them double that revenue number again this decade, getting within striking distance of Red shed current revenue, while their profits are already fantastic.

[winner69]

Yeah I am not surprised - they are building out there store network very fast - wouldn’t be surprised to see them double that revenue number again this decade, getting within striking distance of Red shed current revenue, while their profits are already fantastic.

Keep performing like that and the Aussie owners with deep pockets will continue to pump the cash in

[winner69]

Over the years TWG have tended to dismiss competitors ... or not recognise them as competitors .... like they never understood how much business the likes of Bunnings and M10 Mega took off them as the big bo format was rolled out.

They did try to compete by putting some garden centres in ..... don't think it worked but they persevere with some

[Muse]

Kmart NZ financials - June years

....... Sales NPAT
2019 567...... 42
2020 600.......36
2021 721.......86

just a sensational performance from KMART. I hadn't checked it out on coy's office but I knew just from my times walking in the store this company was sensational.
And with a competitor like WHS its no wonder. It's a real worry for the WHS - Kmart are just stealing marketshare left right and centre.

[Habits]

Kmart NZ financials - June years

....... Sales NPAT
2019 567...... 42
2020 600.......36
2021 721.......86

Is there any chance that the npat has been manipulated by the Kmart accountants for tax efficiency. I know it's strange as multinationals like to declare next to nothing in high tax countries like NZ.

[winner69]

Is there any chance that the npat has been manipulated by the Kmart accountants for tax efficiency. I know it's strange as multinationals like to declare next to nothing in high tax countries like NZ.

Base rate in Oz higher than NZ ….been paying the full 28% in NZ

[winner69]

just a sensational performance from KMART. I hadn't checked it out on coy's office but I knew just from my times walking in the store this company was sensational.
And with a competitor like WHS its no wonder. It's a real worry for the WHS - Kmart are just stealing marketshare left right and centre.

Nothing new here. ……Red Sheds have been losing share for more than 15 years …even last year when sales rocketed

[Habits]

Base rate in Oz higher than NZ ….been paying the full 28% in NZ

Yes 'transfer pricing' arrangements which affect cost prices can be used to manipulate declared results up or down. There is a whole area of law for specialists to get their head around.. I'm not an international tax specialist, all I did before was Google the aust rate to compare :p

[Beagle]

Nothing new here. ……Red Sheds have been losing share for more than 15 years …even last year when sales rocketed

Therein lies the nub of the problem.
If my thesis is correct (that there was a huge amount of one-off Covid related "nesting" expenditure at WHS and mainly at Noel Leeming and themarket.com is nothing but a deep black hole), maybe its back to $2 once all the dust settles ?

[winner69]

I’d hazard a guess Nick has heard about the current fad of NFTs ….. probably incorporating it into his strategic and marketing plans as we speak. Watch this space

good description of a NFT I’ve heard is most NFTs “are about as valuable as a QR code on a Coke bottle cap that sends you to a dead link to an mp3 download.”

[winner69]

Nice round number like 300 will bring the bargain hunters out of hiding won't it .... and buy off those who have said enough is enough

3 bucks so much cheaper than 4 bucks

Even Nick might buy heaps more and average down on those he bought off beagle at 411

[Beagle]

Down more than $1 (27%) in January. Wonder what February will bring ?

Analysts still reckon they will do $109m this year gives eps of 31 cps. I'd like a Tui to go with that please. I'm downgrading to$80m with Omricon's outbreak upon us, gives 23 cps.

Downgrading again to fair value @ $2.30 as I anticipate material Covid effects to linger well into FY23.

[Rawz]

Down more than $1 (27%) in January. Wonder what February will bring ?

Analysts still reckon they will do $109m this year gives eps of 31 cps. I'd like a Tui to go with that please. I'm downgrading to$80m with Omricon's outbreak upon us, gives 23 cps.

Downgrading again to fair value @ $2.30 as I anticipate material Covid effects to linger well into FY23.

Not sure Omircon will effect retail as much as delta. Govt said no more lockdowns? As long as we dont lock down it will be fine.

Increasing interest rates and inflation for me will severally hurt retail. So much discretionary spending gone with higher mortgage payments. Most wage earners get 1 annual pay rise. Wages wont keep up with inflation, less buying power.

Overall less money to go to the retailers. But then again WHS is where everyone gets a bargain.. maybe WHS picks up some shoppers that can no longer afford high st.

[Habits]

Down more than $1 (27%) in January. Wonder what February will bring ?

Analysts still reckon they will do $109m this year gives eps of 31 cps. I'd like a Tui to go with that please. I'm downgrading to$80m with Omricon's outbreak upon us, gives 23 cps.

Downgrading again to fair value @ $2.30 as I anticipate material Covid effects to linger well into FY23.

Not just WHS which is off highs in January... fairly widespread falls. Even without the downgraded upcoming results, WHS was struggling with momentum and coming under selling pressure.

[Beagle]

Not sure Omircon will effect retail as much as delta. Govt said no more lockdowns? As long as we dont lock down it will be fine.

Increasing interest rates and inflation for me will severally hurt retail. So much discretionary spending gone with higher mortgage payments. Most wage earners get 1 annual pay rise. Wages wont keep up with inflation, less buying power.

Overall less money to go to the retailers. But then again WHS is where everyone gets a bargain.. maybe WHS picks up some shoppers that can no longer afford high st.

We will have to wait and see https://www.nzherald.co.nz/world/covid-19-omicron-concerns-in-nsw-over-rising-death-rates-hospitals-ability-to-cope-with-surge/VI3JRI725ERZOIZ4WND2GRIZFU/

Yeah its been a very tough month Habits with the NZX50 down more than 9% but a 27% fall is around triple what the market has fallen.

[Habits]

We will have to wait and see https://www.nzherald.co.nz/world/covid-19-omicron-concerns-in-nsw-over-rising-death-rates-hospitals-ability-to-cope-with-surge/VI3JRI725ERZOIZ4WND2GRIZFU/

Yeah its been a very tough month Habits with the NZX50 down more than 9% but a 27% fall is around triple what the market has fallen.

Beagle as you know, Ecclesiastes 11:1 says to cast your bread upon the waters which means "to do something good or take a risk, usually without expecting very much in return."

WHS fits that then :scared:... in actual fact down 30perc from Ath. Extend the timeline another couple months you could find many blue chips similarly eg Rym, Fph.

[nztx]

At the rate things are going WHS may be down to 2.20 very soon ;)

at those levels I may happily volunteer to carry extra baskets of bread for Beagle :)

[Beagle]

Beagle as you know, Ecclesiastes 11:1 says to cast your bread upon the waters which means "to do something good or take a risk, usually without expecting very much in return."

WHS fits that then :scared:... in actual fact down 30perc from Ath. Extend the timeline another couple months you could find many blue chips similarly eg Rym, Fph.

One of the most confusing things about the Bible is how the many different translations can be so different as to require almost a review of many to ascertain the real meaning. Fortunately we have the internet now which makes it a bit easier and the Bible hub, see https://biblehub.com/ecclesiastes/11-1.htm

The concept that the land should have a fallow year is alluded too at points in the Bible, not at great length but Ecclesiastes 3:1-13 is an very interesting read. My sense is that this is the right time for me to have a very defensive portfolio and v13 and that I should eat and drink and enjoy the fruits of my labours for these are gifts from God.

Couple of famous sayings on the US markets spring to mind - As goes January, so goes the rest of the year (apparently has an 86% likelihood of being correct) Close to the worst January ever.
Don't fight the Fed. Obviously its not just the Fed and central bank stimulus around the world is likely to be wound back at considerable pace this year.

We've had an extraordinary 12 year run in the markets fueled off the back of cheap and easy money and more recently vast amounts of money printing and central bank stimulus. My sense is the tide has turned and its going to be a lot harder from here generating decent returns and 2022 is quite likely to be a fallow year.

Not much in here about WHS so I suppose I better say something to keep this on topic. I am increasing certain that last year was a one-off and themarket.com will struggle to get any traction no matter how much investment Nick throws at it.

There will be a time to sow again in due course but I am extremely defensive with my portfolio settings at present and it feels right for me and i feel very content with portfolio returns in recent years. That said I am pretty close to full time retirement so what's right for others who are younger or those with a higher risk appetite may be the exact opposite.

Costco opening soon https://www.nzherald.co.nz/business/100m-costco-nearing-completion-at-westgate-cladding-going-on-internal-fitout-under-way/KZGPK4YIN26HCS5QURYH7GTDAI/ Paywalled. Doubt it will make much, if any difference to WHS but it won't help sentiment.

[BlackPeter]

One of the most confusing things about the Bible is how the many different translations can be so different as to require almost a review of many to ascertain the real meaning. Fortunately we have the internet now which makes it a bit easier and the Bible hub, see https://biblehub.com/ecclesiastes/11-1.htm

The concept that the land should have a fallow year is alluded too at points in the Bible, not at great length but Ecclesiastes 3:1-13 is an very interesting read. My sense is that this is the right time for me to have a very defensive portfolio and v13 and that I should eat and drink and enjoy the fruits of my labours for these are gifts from God.

Couple of famous sayings on the US markets spring to mind - As goes January, so goes the rest of the year (apparently has an 86% likelihood of being correct) Close to the worst January ever.
Don't fight the Fed. Obviously its not just the Fed and central bank stimulus around the world is likely to be wound back at considerable pace this year.

We've had an extraordinary 12 year run in the markets fueled off the back of cheap and easy money and more recently vast amounts of money printing and central bank stimulus. My sense is the tide has turned and its going to be a lot harder from here generating decent returns and 2022 is quite likely to be a fallow year.

Not much in here about WHS so I suppose I better say something to keep this on topic. I am increasing certain that last year was a one-off and themarket.com will struggle to get any traction no matter how much investment Nick throws at it.

There will be a time to sow again in due course but I am extremely defensive with my portfolio settings at present and it feels right for me and i feel very content with portfolio returns in recent years. That said I am pretty close to full time retirement so what's right for others who are younger or those with a higher risk appetite may be the exact opposite.

I try to keep religion out of these threads ... and obviously, the bible has absolutely nothing to do with the fortunes of the Warehouse - I am not even sure, whether they sell this book, do they?

The January prophecy on the other hand (while more appropriate for the generic threads) might sort of impact on the warehouse share price as well, if it would hold any water. However - it doesn't. Somebody less lazy than me even put in the work to check:


As goes January, so goes the rest of the year?
To determine if this is wisdom or just another of Wall Street’s myths (like sell in May and go away) or fact-based advice, we go to our trusty videotape and examine returns for each January beginning in 1950 to see if a negative January reliably predicted a negative performance the rest of the year. Over this period there were 28 years in which January produced a negative return for the S&P 500. The average loss for the month in those 28 years was 3.6 percent. However, over those 28 years, the average return over the following 11 months was 5.4 percent. Clearly, it is a myth that as goes January, so goes the rest of the year.


from: https://www.evidenceinvestor.com/as-goes-january-so-goes-the-year/

So - what do we know about the Warehouse?

Well, we do know, that it's SP dropped in January - as all other retail stock did as well. On a two year comparison it performed as well as the much feared and praised Kogan with its big ape and it did even better than HLG with its lightly clad ladies ... Funny that - who is down ramping the other low performers? Somehow it does not feel fair that they all beat up the same stock, but hey - here we go.

We do know as well that all above mentioned (and others as well) retail stock are currently in a downtrend ... no matter how you measure that. The three companies I happened to mention are all below the MA100, the MA200 and the MA400 - i.e. the falling knife saying applies (even if its not from the bible). On the other hand - none of these companies is likely to bite the dust anytime soon, and any retailer with a sensible internet selling strategy will in my view do well over the next six months or so (and longer). While the WHS is not an internet star ... their internet presence did significantly improve in the last six months or so.

We don't know how consumer behaviour will develop, however - customers will always need cheap and reasonable quality clothing, a replacement of breaking house hold items, office and back to school stuff, home electronics and more. World will not end to turn and actually - Most countries are currently at peak Omicron or beyond ... and hey, while we are dragging the chain ... we will be there in 4 to 6 weeks as well.

So what's the big deal? Sure - some traders here are still trying to talk the stock down ... and hey, they may or may not have a bit more success. Hype can be strong but it is always volatile. If you don't know what I mean, have a look at what some of the people talking the stock currently down said three or six months ago about the Warehouse. Good news however: hype is cyclical :p;

Interesting observation: KMD (another of these lousy retailers), as well as HLG and KGN (to a lower degree) started to move upwards over the last couple of days. WHS looks like bottoming out. Just a breather? I don't know, but fundamentally I don't see anything which should push retail for a long time into the doldrums.

Another of these wise (and true) sayings which is not in the good book: Markets are forward looking :p ;

[Waltzing]

AS MR B has stated and lets keep God out of markets since they are run by computer chips, rising prices can influence retail spending.

Some sources say inflation pressure will abate in 2023 but in the mean time if petrol keep going higher and everything including tooth brush's and bathroom stuff goes up along with food, milk ect... its enough to take the cream off the top and thats why the momentum can over take and selling begets selling.

[Entrep]

Following the WHS trading update last month the stock has dropped 24% and the shares are now off $1 since (from $4) since Carling’s detailed note of 1 November where he moved to Underweight. WHS is now trading on a FY23 PE of 10.8x (inline with its 3 year pre-COVID average) and at a slight discount to Carling’s revised TP of $3.30 (-8% reflecting tweaks to WACC). Carling notes the outlook for retail remains uncertain with various headwinds (COVID, wage inflation, consumer sentiment from rate hikes, ongoing supply chain issues) remaining but this is now largely in the price as WHS earnings rebase post heightened domestic consumption through the peak of the pandemic.

From Craigs

[Habits]

Man, witnessing (can I say that) the SP fall below the 3 buck threshold yesterday was a small worry... almost sold. Capitulation. Price lifted strongly

[Waltzing]

yes its staging counter attack but for how long?

[Habits]

yes its staging counter attack but for how long?

No one likes to sell at a loss it is not good for the psyche. Those who bought above the current SP will be unwilling to sell

[Rawz]

No one likes to sell at a loss it is not good for the psyche. Those who bought above the current SP will be unwilling to sell

I dont mind selling at a loss if i am moving to another investment i think will perform better. I try to view it as what can this 'dollar' do for me today. Not what has it done for me in the past.

My investment spreadsheet doesnt really track returns. I dont use sharesight. At the end of each year I add up the sum of my investments + dividends - fees and subtract it from what i started the year with and hope I have beat the nzx50 or KFL.

[winner69]

WHS share price up 5.3% today .... almost as much as Mainfreight :confused:

[BlackPeter]

WHS share price up 5.3% today .... almost as much as Mainfreight :confused:

Great companies move in sync :p;

13471

MFT blue - WHS - orange.

[Waltzing]

well it got Boosted!!!!

is the retail wreck in NZ not coming to pass after all? Full employment due to QE and big employment by public sector.

[Rawz]

WHS share price up 5.3% today .... almost as much as Mainfreight :confused:

Winner the correction is over... Young retail investors were posting on facebook last week friday asking how to short the market. Classic sign that its over. Like when that famous investor back in the 1920s got a 'stock tip' from a shoe shine boy. He knew he was in peak market

Hope everyone has deployed their cash. Or inflation will eat away at it

[Entrep]

Winner the correction is over... Young retail investors were posting on facebook last week friday asking how to short the market. Classic sign that its over.

lol, classic

[Habits]

WHS share price up 5.3% today .... almost as much as Mainfreight :confused:

It is good when this happens ... could say the "believers have been blessed"

[see weed]

"not much left to short"


Gotta say that in these dark days of summer sun the ANZAC spirit abounds...

but its still only at 3 dollars...

Mr B says 2.20...that hound has a sixth sense from a lot of hunts...
From 28/1/21. I hope Mr. B is right. I sold down about 39,000 over Jan. The last 5,000 lot I sold at 3.02 on 28/1/21 which I had bought 4 days beforehand accidently for 3.32:D.

[jimdog31]

Weird, my previous posts re themarket.com seem to have been taken down?? :mad ;: Must have had too much truth!

Anyway, not sure if anyone else has clocked this, but they are canning 1-day (says it on the masthead of 1-day on their site)

Why I wonder? Pre 2019 and the introduction of themarket.com , as per their statements 1-day was doing circa $60m and seemingly profitable (without all the heavy overheads that themarket.com brought)

They recently stated "we have 5 of the top leading E-commerce websites in NZ" , now it will be 4.

https://www.similarweb.com/website/themarket.com/#overview Number 100 in NZ 1.8m visitors last month
https://www.similarweb.com/website/1-day.co.nz/#overview Number 123 in NZ 1.5m visitors last month

Sure, there will be some overhead savings, but 1-day was a huge part of the $100m investment when it was part of Torpedo7, they are effectively writing this off?? (i know they have already written this down substantially)

Why wouldn't they spin this business off? mightyape got sold for $122m, Grabone sold for $18.

1-day has more visits than Bricoes.co.nz!!

The cynical part of me says this will be an opportunity to "spin" the market is growing. If they factor on half of the regular visitors now being redirected to themarket.com and spending directly there they can quietly sweep 1-day under the carpet and voila themarket.com is amazing!

Their online strategy really does baffle me.

[winner69]

If anybody want's to see jim's previous illuminating posts re themarket.com they were 'quoted' by a few

Go to Search Thread on the yop grey bay and search jimdog31 and they'll pop up

Good stuff on them ....weird they disappeared

[jimdog31]

If anybody want's to see jim's previous illuminating posts re themarket.com they were 'quoted' by a few

Go to Search Thread on the yop grey bay and search jimdog31 and they'll pop up

Good stuff on them ....weird they disappeared

Yeh I wonder what I said that got them removed? didn't seem to be anything in there particularly defamatory.

[winner69]

Red Sheds and Torpedo7 should have done well selling cheap tents to the protestors at Parliament ….that’s if they had any in stock ;)

Cheap as and next to useless in current weather I’d say

[stoploss]

Red Sheds and Torpedo7 should have done well selling cheap tents to the protestors at Parliament ….that’s if they had any in stock ;)

Cheap as and next to useless in current weather I’d say
They obviously didn’t sell many as it looks like the tents are all still standing from the livestream

[winner69]

Poor Nick …..wonder how far along the cycle he is

Elon Musk recently panned the Metaverse in an interview as “more marketing than reality” and said “I don’t get it” and “I currently am unable to see a compelling metaverse situation.”

[winner69]

Consumer this month has a pretty damning article of Warehouse sustainability claims …esp the claims made on a TV ad.

Much along the lines of what some have said here

https://www.consumer.org.nz/articles/warehouse-sustainability-claims

[Beagle]

I think he's at the first of five stages. Expect ongoing and ever increasingly sized bets to be placed and lots more cut and paste of buzzwords and phrases from other metaverse CEO's speeches linked together into obscurely worded presentations that confuse us all but make it look like he might know something we don't.

WHS probably worth $3.50 a share but take a full dollar off for the ongoing cost of their tangential expedition into the metaverse and another 50 cents off for their relentless kowtowing to all things ESG. Please wake me up when we get back to $2 again.

[Joshuatree]

Consumer this month has a pretty damning article of Warehouse sustainability claims …esp the claims made on a TV ad.

Much along the lines of what some have said here

https://www.consumer.org.nz/articles/warehouse-sustainability-claims

Alot of Greenwashing going on everywhere ATM.

[ralph]

Alot of Greenwashing going on everywhere ATM.

The majority of people me included who shop there don't give a monkeys about their green washing neo liberalistic policies & do not read the consumer. Its all about the cost of the products cheap as chips .

[Jay]

It may have been mentioned , but I missed it, but got an email the other day that 1-day is merging into themarket.com - so presumably it will definitely be reported as 1 figure.

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Discl: Not currently holding ( sold out at early $4's)

[Beagle]

The majority of people me included who shop there don't give a monkeys about their green washing neo liberalistic policies & do not read the consumer. Its all about the cost of the products cheap as chips .

Dead right. I bought a foldable directors chair from the WHS in Taupo while on holiday. All I cared about was it was comfortable and cheap and didn't fall to bits when my fat backside sat on it lol. I couldn't care less whether the material was environmentally this that or the other or the wood was made from sustainable plantation forestry or not.

I did notice they had 2 EV charging points outside but that one was occupied by a non EV. I understand that WHS hasn't actually paid for these chargers though so can't take credit for them as it was some scheme with Govt funding if my memory serves me correctly.

I doubt even 1 in 100 customers at WHS would care about sustainability. The whole ESG and metaverse fixation are just pet projects of Nick to make him feel like he's doing something towards earning his $2m+ salary a year.

[Waltzing]

No Performance, No Pay....no share options..

[Tomtom]

While Omicron is a temporary setback you'd think higher inflation would offer larger discount retailers an opportunity if they can just fight inflation to a draw. Even in some of the other sectors like hardware if they can reduce costs they should win market share.

[peat]

WHS probably worth $3.50 a share but take a full dollar off for the ongoing cost of their tangential expedition into the metaverse and another 50 cents off for their relentless kowtowing to all things ESG. Please wake me up when we get back to $2 again.

I dont think it will go as low as 2

THeory predicts 2.25 , something like this might happen.

13535

[nztx]

I dont think it will go as low as 2

THeory predicts 2.25 , something like this might happen.

13535


Has Costco's entry been fully 'costed in' ? :)

[winner69]

Interesting article for a Sunday … Why CEOs should make dogfooding an integral part of their business

https://businessdesk.co.nz/article/the-life/eat-up-why-ceos-should-make-dogfooding-an-integral-part-of-their-business

Nick not ‘smartest’ dresser so he probably practices it …but Chair Joan wouldn’t be seen dead in an Warehouse outfit

[Onion]

The Warehouse in Wellington will be doing great trade in camping equipment, gazebos, etc., tonight

[777]

Has Costco's entry been fully 'costed in' ? :)

Costco is going to really affect the warehouse and many other retailers. Supermarkets included.

[850man]

Costco is going to really affect the warehouse and many other retailers. Supermarkets included.

Looking at Costco's pricing in Australia, it seems their threat directly against WHS does not appear that great. Hoping they will target the supermarket duopoly and give them more of a shake-up.

[winner69]

So if Warehouse had any ambition to become a big grocery player they will have to do it the hard way ..... no real help from the ComCom

Big bully ComCom got their supermarket profitability figures wrong and had to recalculate them downwards....supermarkets not as 'greedy' as they made out .....no surprises there

https://comcom.govt.nz/__data/assets/pdf_file/0023/278402/Market-study-into-the-retail-grocery-sector-Executive-summary-8-March-2022.pdf

[Benny1]

ComCom could never really truly take them to task could they?
After all they allowed Woolworths to take over Progressive to create this Duopoly in the first case?

[LaserEyeKiwi]

Sounds like an opportunity for a new entrant specializing in being the supply chain for new entrants, rather than being the new retail entrant itself. Or alternatively two or more new or existing food retail entrants should form a joint venture for the supply chain solution.

[winner69]

Once used to be a saying in retail 'when petrol reaches $2.30 a litre start thinking about a bit of a sales slowdown'

Stuff story says petrol hit $2.36

Just as well old sayings are just that these days - these days are different

Post from last July

Things did slow down ............. and now jeez petrol I believe is over 3 bucks

Seems that 'these days are different' aren't different after all as retailers start expressing concern over sales

[Beagle]

Post from last July

Things did slow down ............. and now jeez petrol I believe is over 3 bucks

Seems that 'these days are different' aren't different after all as retailers start expressing concern over sales

Naughty dog has been sniffing around looking at a nice little Riviera launch. Has a 1000 liter diesel tank. Did a few calculations this morning based on expected fuel burn and a ("cheap" and short day trip...well it used to be in the good old days), Westhaven to top end of Waiheke at beautiful Oneroa bay...a favorite spot we used to visit a lot in days gone by with our previous boats). What used to cost us $150 for a nice day out is now over $400 :eek2:

A nice long weekend trip to Great Barrier for some fishing and relaxation which was ~ $1,000 is now ~ $2,500. Yeah....NAH ! The scariest part of owning a launch is diesel is usually only 10-20% of the total cost :eek2: Might have to buy a sailboat instead !

[Muse]

Naughty dog has been sniffing around looking at a nice little Riviera launch. Has a 1000 liter diesel tank. Did a few calculations this morning based on expected fuel burn and a ("cheap" and short day trip...well it used to be in the good old days), Westhaven to top end of Waiheke at beautiful Oneroa bay...a favorite spot we used to visit a lot in days gone by with our previous boats). What used to cost us $150 for a nice day out is now over $400 :eek2:

A nice long weekend trip to Great Barrier for some fishing and relaxation which was ~ $1,000 is now ~ $2,500. Yeah....NAH ! The scariest part of owning a launch is diesel is usually only 10-20% of the total cost :eek2: Might have to buy a sailboat instead !

If only tesla did boats - you’d be the coolest pup in the sea

[LaserEyeKiwi]

If only tesla did boats - you’d be the coolest pup in the sea

There is already a company taking orders for an aftermarket foiling Kit that can be attached to a Tesla CyberTruck for aquatic adventures

13608

[winner69]

Apparently a big marketing announcement coming about The Warehouse ....Nick has been busy

[850man]

Half year unaudited results tomorrow - wonder what that news will be?

[winner69]

Half year unaudited results tomorrow - wonder what that news will be?

Not as 'bad' as most thought it might be when they said profit would 'exceed $40m' --- be pretty close to $50m (+/-a bit) methinks

And the outlook will be pretty positive .... good start to H2 and all that stuff and and FY22 will end up pretty good (but not the $175m of last year)

If FY guidance is greater than $100m they'll be able to say 2nd highest profit for many years (at last since 2006 ...maybe ever) ....that's pretty good

[Rawz]

$100m npat for FY22 would be acceptable.
Deserves $3 SP = ~10 p/e.

Guru Tony Alexander said this in his free weekly update last week:

"With regard to retailing my rule of thumb would be this. The more your sales surprised on the strong side over the past two years the more you should downgrade your expectations for the coming two years. We consumers have been on a spending binge for certain things including home electronics, furnishings etc. as we have improved our nests. But we only need a new spa every few decades, we will be reallocating money to offshore travel, our house prices are now falling, and our incomes are failing to keep up with rising prices for the goods and services we typically consume. Throw in rising mortgage interest rates but only minimal increases in bank deposit rates and you get a scenario where retail spending is going to be highly constrained across most sectors in the coming two years."

Maybe 10 p/e too generous?

[nztx]

The competition - like Costco revving up their engines by reports too

bound to have some effect IMO :)

[winner69]

$100m npat for FY22 would be acceptable.
Deserves $3 SP = ~10 p/e.

Guru Tony Alexander said this in his free weekly update last week:

"With regard to retailing my rule of thumb would be this. The more your sales surprised on the strong side over the past two years the more you should downgrade your expectations for the coming two years. We consumers have been on a spending binge for certain things including home electronics, furnishings etc. as we have improved our nests. But we only need a new spa every few decades, we will be reallocating money to offshore travel, our house prices are now falling, and our incomes are failing to keep up with rising prices for the goods and services we typically consume. Throw in rising mortgage interest rates but only minimal increases in bank deposit rates and you get a scenario where retail spending is going to be highly constrained across most sectors in the coming two years."

Maybe 10 p/e too generous?

Jeez that was a dismal outlook

Maybe it's your hope of $100m profit that's too high

With Alexander's outlook maybe $75m is closer to the market .... putting on a PE of 13/14 ...now that's generous?

Or on a PE of abut 10 a share price around 220 maybe


Second highest profit coming up though

[Waltzing]

not sure about the overseas travel unless you have to although local travel agent said they were inundated with info flight requests.

may be just more than the nothing much last 2 years..

can still here the odd builders saw going weekly and hammering of piles for decks and other things in back gardens.

house extensions going on. Doesnt look like a slow down in that department.

[Beagle]

So they're talking just north of $40m for the first half. Consensus for the year of $109m suggests something like $65m for the second half. That's looks like a very challenging expectation to me so I see the very real prospect of broker downgrades. Likewise average broker forecasts of $122m and $129m for FY23 and FY24 look very optimistic.
https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/
I reckon the brokers and Nick have this one wrong. Follow the TA signals.
I'm keeping my WHS powder dry at this stage.
30 day MA looks like about $3.08 but 100 day MA is still $3.60 !
One thing to watch with the report is how much money they're throwing down the rabbit hole with themarket.com and what the losses are.

[Rawz]

Cant see any of the nzx listed retailers doing much of much over the next couple of years.

Other opportunities elsewhere with actual growth prospects.

Might be worth revisiting the retailers again one day

[Davexl]

Cant see any of the nzx listed retailers doing much of much over the next couple of years.

Other opportunities elsewhere with actual growth prospects.

Might be worth revisiting the retailers again one day


What about when times get tougher, discretionary spend become more price sensitive pushing up WHS earnings, taking market share from upmarket retailers?

[winner69]

What about when times get tougher, discretionary spend become more price sensitive pushing up WHS earnings, taking market share from upmarket retailers?

Hi Dave …..as I have shown a few times before that ‘theory’ doesn’t seem to apply to WHS, in particular to Red Sheds. It one of the market fallacies

In the past Red Sheds sales have declined more than overall retail sales in tough times

But this time is going to be different eh?

[winner69]

Hey waltzing ……you predicted Ukraine stuff many months ago …… so what you reckon will happen to retail if Ruapehu blows it top and spews ash all over the upper half of the NI ……and possibly trigger awakening of volcanoes around Auckland …Big Bang stuff then.

[winner69]

RECORD SALES at WHS

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389213/367085.pdf

[Waltzing]

really winner(*n) please . Got some photo hanging on walls of the last big blow off; used to be hanging in the Taupo house before it was sold in 2016.


Key brand performanceThe Warehouse sales decreased 7.4% to $895.4 million for the half year due to COVID-19 related store closures throughout Auckland and New Zealand. Customers pivoted to shopping online with The Warehouse online sales increasing a staggering 93.6% to $119.0 million making up 13.3% of total sales, while our popular Click & Collect service increased 122.3% making up 47.3% of all online sales.Warehouse Stationery sales were also impacted by store closures with sales decreasing 10.6% to $122.0 million. Warehouse Stationery online sales increased 54.2% to make up 17.5% of total sales, with Click & Collect sales increasing 85.4% making up 29.8% of online sales.Noel Leeming held up relatively well despite COVID-19 disruption and store closures with sales down slightly at 1.8% to $582.7 million. Online sales increased 79.0%, while Click & Collect sales increased 58.0%, as customers continued to embrace our 1-hour Click & Collect service to fulfil their online shopping.

Segments that actually went up.

Operating Performance.. Actually just sales.
-------------------------------------------------
HYTD 2022 2021
------ ------- -------
Torpedo7 97,462 | 84,855
TheMarket 33,037 | 29,292

CAPITAL Expenditure
--------------
HYTD 2022 2021
------ ------- -------
Torpedo7 4,440 | 4,494
TheMarket 2,198 | 1,500

"The Group has been reviewing its more than 200 different cloud-based software arrangements, which have an approximate combined carrying value at balance date of between $65 million to $75 million to determine the impact of the IFRIC decision."

the problem with cloud is actually this very thing.

The security issues and vulnerabilities are just HUGE!!!

[Snow Leopard]

Looks OK doesn't it?

Onwards and upwards!

Disc: DYOR

[percy]

WHS very strong online results augers well for their future.

[winner69]

What I find interesting is that NPAT to sales at 2.8% is much the same as it was running at pre-covid

All the agile / transforming stuff that boosted margins run out of steam and things have reverted back to the old norm

If I was Nick I'd be a bit worried .....but no worries TheMarket.com is firing on all cylinders

[Waltzing]

its still looks like a lot of work to do to make this thing something MR B would invest in.

100 million for the market? Is that actually much at all when you think about the total value of online sales in the economy.

P&L for the market in the presentation ? which page?

Sales in T7 up though, paddles boards and tents.

More variants coming no end in sight , 4 booster coming up mid winter?

[Rawz]

Looks OK doesn't it?

Onwards and upwards!

Disc: DYOR

I agree. Its okay. Tough tough trading environment for the half. And probably going to get tougher for the next 4-5 halves..

Just need to navigate the margin pressures..
The Market grew volume 20%, thats nice

[Waltzing]

whats the markets bottom line.

time for Joan to book into an OCA suite?

the balance sheet some big numbers in the current section perhaps showing up increased inventories.

current liabilities up 100 Mil.

[winner69]

H1 npat is generally about 60% of full year profit

They reluctant to give guidance but $80m full year might end as a good result ...EPS of 23 cents

[Waltzing]

T7 still tiny profits!

[trader_jackson]

I agree. Its okay. Tough tough trading environment for the half. And probably going to get tougher for the next 4-5 halves..

Just need to navigate the margin pressures..
The Market grew volume 20%, thats nice

I'm not quite sure what they mean by "20% volume", in terms of number of orders perhaps?
Looking over the financial statements, TheMarket revenue (half year on half year) grew from $29.3m to $33.0m - an increase of 12.6%, but operating losses grew 30.4% (from $9.2m to $12.0m)... if these sorts of growth in operating losses continues, TheMarket looks like it will lose close to $30m this year (it was $20.7m last year)... and if Winner says FY NPAT is around $80m, $30m is alot to be 'gambling away' at TheMarket... ie NPAT could be $110m without TheMarket, and this would be a big jump on winner's $80m estimate.

[Rawz]

I'm not quite sure what they mean by "20% volume", in terms of number of orders perhaps?
Looking over the financial statements, TheMarket revenue (half year on half year) grew from $29.3m to $33.0m - an increase of 12.6%, but operating losses grew 30.4% (from $9.2m to $12.0m)... if these sorts of growth in operating losses continues, TheMarket looks like it will lose close to $30m this year (it was $20.7m last year)... and if Winner says FY NPAT is around $80m, $30m is alot to be 'gambling away' at TheMarket... ie NPAT could be $110m without TheMarket, and this would be a big jump on winner's $80m estimate.

Apparently.. "the platform now has over 497,000 active customers, with customer spend up 20% half on half"

Looks like the statement is smoke and mirrors.

Your numbers paint a dismal picture. No wonder it isnt on summary release lol

[Waltzing]

what page is the markets profit and loss on.

capital value of the market in the balance is the same as last year and CAP EX was 2 odd million.

sales at 30 odd M.

[LaserEyeKiwi]

To clarify $100m projected transaction value on the market.com is not the same as $100m revenue.

Remember that the themarket.com is an aggregator of other stores as well (where themarket enables a sale but the 3rd party store sends the goods directly form itself to the purchaser without WHS ever touching it). For those sales themarket is only counting as revenue its commission from the sale.

so for example when I purchased a $400 luxury bag before xmas through themarket, WHS only counts the ~$40-$60 it collected as commission from this sale as revenue, but the full $400 is counted as “Transaction value” going through themarket.

[LaserEyeKiwi]

Still completely out for now, but some ideal thoughts on WHS result:

- ex-cash market cap is ~$875m
- ex-cash market cap/FY NPAT somewhere around 10-11x
- cash + credit lines they have access to almost half a billion in cash, and presumably still on the hunt for acquisitions (I would prefer a massive share buyback if I was still a shareholder)
- with 19.4% of sales online, their online sales were $335.62 million for the half year, an absolute monster of an online business.
(by comparison Briscoes group had only $159.8m in online sales - for 12 MONTHS - so the warehouse online operation is essentially 4 times the size of Briscoes group).

[Beagle]

I'm not quite sure what they mean by "20% volume", in terms of number of orders perhaps?
Looking over the financial statements, TheMarket revenue (half year on half year) grew from $29.3m to $33.0m - an increase of 12.6%, but operating losses grew 30.4% (from $9.2m to $12.0m)... if these sorts of growth in operating losses continues, TheMarket looks like it will lose close to $30m this year (it was $20.7m last year)... and if Winner says FY NPAT is around $80m, $30m is alot to be 'gambling away' at TheMarket... ie NPAT could be $110m without TheMarket, and this would be a big jump on winner's $80m estimate.

Page 25 for anyone that doesn't know. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389213/367104.pdf

I think you've quite correctly addressed the elephant in the room that many others have opined about in a concerned way before, including myself and i am not entirely sure that this platform is wearing all the overhead costs it should.

How much more do they throw down this rabbit hole in pursuit of online nirvana and at what annual loss ?

As you correctly point out the business is capable of earning significantly more without this handbrake. The rate of growth in online sales given the heavy investment and given the typhoon strength tailwinds blowing behind online sales continues to concern me.

That said the result in the circumstances that were prevailing for that 6 month period is slightly better than I expected.

I don't think there's any marvelous growth ahead but I think the company can make ~ $85-90m this year and maybe in a normal year in due course $110m even with Nick pursuing his fantasy of online significance.

If he wakes up and smells the coffee one day and abandons his reckless strategy I would see that as the catalyst for a significant rerating of the shares.

I have raised my fair value assessment to $3.00. The way they maintained a very strong cash position given all the challenges they had in the period is quite impressive.

I think they are capable of paying circa 20 cps in annual fully imputed dividends in the medium term which is 27.8 cps gross. On a dividend valuation model putting a 9% required rate of return on that I see it as 27.8 / .09 = $3.09

Disc: I started a very small position as an income share on the open this morning.

[LaserEyeKiwi]

Interesting messaging in the media release, I wonder if this is going to be a part of the new marketing push Winner mentioned the other day:



“With cost of living increasing, every dollar needs to go as far as possible for our customers and we are focused on providing excellent value. Things that matter like quality and affordable clothing, and a typical Kiwi breakfast: eggs, bread, milk, coffee, butter, oats, and Weet-Bix - if you buy this at The Warehouse, you’ll save over $6 compared to everyday grocery prices with a key grocery compete”

Rather than the Herculean task of starting a full supermarket rival immediately - instead focus on a “get your food basics essentials from the warehouse” and slowly build the offering that way.

[Joshuatree]

What no bacon?:)
Have held through all the doomsayers on here and the divis will be my sizzling and popping baon.

[Davexl]

Interesting messaging in the media release, I wonder if this is going to be a part of the new marketing push Winner mentioned the other day:

Rather than the Herculean task of starting a full supermarket rival immediately - instead focus on a “get your food basics essentials from the warehouse” and slowly build the offering that way.

Fits in with my "theory" of the Warehouse supplying the price-sensitive basics and gaining market share as times get even tougher.
Maybe this time will be different - eh Winner...The icing on the cake was buying another 60K$ yesterday prior to the announcement.:)
Lots of people are going to have trouble paying their rising mortgage bills for starters...

[Beagle]

Yes I see with their recent advertising they have focused this entirely back on getting basics at an affordable price where everyone gets a bargain and abandoned their disingenuous sustainability B.S. marketing (for the time being anyway). Makes sense when many are facing a cost of living crisis.

[Doug]

Page 25 for anyone that doesn't know. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389213/367104.pdf

I think you've quite correctly addressed the elephant in the room that many others have opined about in a concerned way before, including myself and i am not entirely sure that this platform is wearing all the overhead costs it should.

How much more do they throw down this rabbit hole in pursuit of online nirvana and at what annual loss ?



Well I don't know anything about the business case for the elephant but I recently bought a very nice rugged phone at a very competitive price from the rabbit hole. It was sourced across the ditch and arrived very promptly despite all the talk about supply chains. I am most pleased with the transaction.

[Waltzing]

"Page 25 for anyone that doesn't know"

yes but that is

not a report that tell you want you need to know......

the market deserves a detailed profit and loss all of its own.

[Beagle]

"Page 25 for anyone that doesn't know"

yes but that is

not a report that tell you want you need to know......

the market deserves a detailed profit and loss all of its own.




I couldn't agree more that more disclosure should be forthcoming about this huge gamble Nick is embarking upon. My updated fair value assumes he continues to embark upon this reckless pursuit but I am especially interested in knowing how long he's intending to wear losses in the order of $25-30m per annum ? It looks like gross recklessness to me considering the very poor growth rate in the current environment that's highly supportive of online growth. "If it looks like a duck, walks like a duck, and quacks like a duck...it must be a duck" In due course if its safe to go the annual meeting and I have enough shares to bother, I might tell Nick exactly what I think of his pet duck and ask him when he thinks it will start laying eggs. I suspect all the endless crap he's reading from Amazon's early days and straight out arrogance and pride means he is likely to maintain his delusions of online grandeur for several more years at the least therefore the extent of the flea infestation and his reluctance to stem the flow of blood means this will retain a sober valuation until such time as he realizes the folly of his ways.
Average analyst price target of $4.05 looks far to optimistic to me. https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/
Has the makings of a good income stock at around $3.00 - $3.10 and that's all it is in my opinion.

[winner69]

TheMarket.com appears to generate stuff all revenue - $1.4m in FY20 and $4.4m in F21. They don't show 1-Day sales in half year reports

1-Day been around for a while so you can't say 1-Day are really TheMarket sales.

Whatever here's the numbers they report as TheMarket.com --- seems a pretty sad state of affairs and not getting better in spite of the words

[Waltzing]

Thank you MR B ! How are we supposed to make informed decisions when there is a lack of transparency.

suspect it will only stop when he departs...

[Beagle]

Thank you MR B ! How are we supposed to make informed decisions when there is a lack of transparency.

suspect it will only stop when he departs...

He's em"barking" upon gambling ~ $25-30m on this poorly performing pup so this Beagle might have a lot of "barking" to do about that at the annual meeting. Might even call him a reckless gambler...that might stir things up a bit !! Lets get real here, any person who gambles a quarter of their income is reckless and it should be no different with companies !
The trouble with these overpriced international hires is they think they can change the world. Him going and a new CEO taking a far more conservative approach to online investment would lead to a 20-30% share price increase in my opinion.


I see there's a new progress on strategy presentation just been released to the NZX http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389262/367163.pdf I would read even more of their blurb but I fear if I do I might lose the will to live lol

[Waltzing]

"em"barking" upon gambling"

classic!

[winner69]

……….

I see there's a new progress on strategy presentation just been released to the NZX http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389262/367163.pdf I would read even more of their blurb but I fear if I do I might lose the will to live lol

Thanks beagle …..that’s one heck of preso …. a real cool slide deck that adds a lot of colour to what they are doing and how it will result in decent sustainable profits going forward.

A must read

[Beagle]

In between all the other politically correct nonsense I did pick up this snippet of how shipping costs had more than doubled from already very elevated levels last year. Some year soon, hopefully the shipping companies might stop acting like the pirates on the high seas they surely are and normalised profits will benefit accordingly.

Shipping costs increased 111% vs FY21 H1,
including more spot rate being used to
manage delivery timelines

Taking into account all the store shutdowns during the period and the shipping rates the result was quite credible as is the dividend.
Its probably worth having a very modest stake for dividend income at about these level's.

[Waltzing]

A new promo on TV....

Addicted to the warehouse!!!

This user is a serial warehouse shopper!!! from the preso...

"“Great app! Use it in store to check barcodes for prices. Use it before going out to see which stores have stock. Use it to purchase items online, check review, free click and collect. Very happy.”★ ★ ★ ★ ★The Warehouse mobile app customer review"

its a wonder they dont have a "Wellness tracker on the app to collect that behavioural science before and after the experience.

This is the next step...

The warehouse wear your wellness!

[winner69]

Read the paper and inflation is causing a cost of living crisis

One cause of inflation has been businesses expanding profit margins ..globally at record levels ….and WHS proud of their efforts.

Warehouse purpose - Helping Kiwis live better every day

Maybe they (and many other businesses) should do the decent thing and tell themselves that should not have been so greedy with their price rises and and give some of margin increase back to kiwis by way of price cuts so they can live better every day.

[Beagle]

LOL mate, that's good comedy accusing WHS of price gouging. Too funny lol

Feeling down, try some of these, probably about half the price you'd pay for a similar product at one of the supermarkets.
https://www.thewarehouse.co.nz/p/waikato-valley-chocolates-caramel-chocolate-almonds-200g/R2585862.html

[winner69]

LOL mate, that's good comedy accusing WHS of price gouging. Too funny lol

Yeah, should have read the bit about how they’ve saved Kiwis over $6 at breakfast ….compared to everyday prices at competing grocers ,,,,over $40 a week ……and still there’s a cost of living crisis!!!

But maybe they should share gains more equally ….between struggling Kiwis and greedy demanding shareholders

[Beagle]

Yeah, should have read the bit about how they’ve saved Kiwis over $6 at breakfast ….compared to everyday prices at competing grocers ,,,,over $40 a week ……and still there’s a cost of living crisis!!!

But maybe they should share gains more equally ….between struggling Kiwis and greedy demanding shareholders

Surely you don't want them to pay another $60m wage subsidy back lol. You're too funny today mate.

Want a company with a sick and greedy culture, in my opinion you need look no further than SKC https://www.stuff.co.nz/business/128110851/covid19-skycity-tells-workers-with-virus-to-take-sick-leave-despite-wage-subsidy

[winner69]

Surely you don't want them to pay another $60m wage subsidy back lol. You're too funny today mate.

Want a company with a sick and greedy culture, in my opinion you need look no further than SKC https://www.stuff.co.nz/business/128110851/covid19-skycity-tells-workers-with-virus-to-take-sick-leave-despite-wage-subsidy

If they can do breakfasts this cheap maybe the government should buy the Red Sheds and become a real supermarket operator, the KiwiShop ComCom talk about……solve a lot of problems …teach the Progressive people a lesso.

TWG group would be left with a great business ….Leemings, T7, Stationery and that TheMarket. ….the Red Sheds are a dog of a business, low growth, low margin and capital intensive

[Beagle]

If they can do breakfasts this cheap maybe the government should buy the Red Sheds and become a real supermarket operator, the KiwiShop ComCom talk about……solve a lot of problems …teach the Progressive people a lesso.

TWG group would be left with a great business ….Leemings, T7, Stationery and that TheMarket. ….the Red Sheds are a dog of a business, low growth, low margin and capital intensive

You been cuddling Cindy again :p
Brokers reckon they can do $122m for 35 cps in FY23 and $129m for 37 cps the year after that. https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/

I doubt that but put a no growth PE of 10 on normalized earnings of say $115m = 33 cps and fair value could be $3.30 next year and gross yield of about 9% in the meantime. Not too shabby at the current price I reckon.

[LaserEyeKiwi]

TheMarket.com appears to generate stuff all revenue - $1.4m in FY20 and $4.4m in F21. They don't show 1-Day sales in half year reports

1-Day been around for a while so you can't say 1-Day are really TheMarket sales.

Whatever here's the numbers they report as TheMarket.com --- seems a pretty sad state of affairs and not getting better in spite of the words

The investor presentation says themarket accounts for 23% of sales (presumably the groups total online sales).

Remember the sales on the themarket that are from the warehouse 1st party stores are recorded in those brands segment revenue, not in themarket segment revenue..

[Waltzing]

why would you go big on this stock instead of BRISC with some HLG?

yes the DIV is higher at the present price but the risk is also higher.

who says the market isnt going to become an even bigger drag on profits?

200 cloud based software services being used? sounds almost as bad as a government org.

[winner69]

Another good news story re WHS .... even a smiling Nick photo

https://businessdesk.co.nz/article/retail/the-warehouse-steps-up-it-refurbishment-investment


With their new inventory management system coming soon the poor shop person might find the TV I wanted that the computer said they in stock (two of them) but found stock was actually ZERO .... so good investment in all that IT

[Waltzing]

dollars to donuts winner(*N) the others are more profitable.

[LaserEyeKiwi]

Warehouse Group keen to compete with supermarket chains
https://www.rnz.co.nz/news/business/463834/warehouse-group-keen-to-compete-with-supermarket-chains (https://www.rnz.co.nz/news/business/463834/warehouse-group-keen-to-compete-with-supermarket-chains)

[Beagle]

why would you go big on this stock instead of BRISC with some HLG?

yes the DIV is higher at the present price but the risk is also higher.

who says the market isnt going to become an even bigger drag on profits?

200 cloud based software services being used? sounds almost as bad as a government org.
https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/
Removing the inherent caution I have the average view is that they can pay fully imputed annual dividends of 25 cps next year rising to 27 cps in FY24.
Grossing that up for imputation credits that's (25 / 0.72) = 34.72 cps gross for FY23 rising to (27 / 0.72) 37.5 cps gross for FY24.
Buying now at $3.15 cum a 10 cent fully imputed dividend that goes ex very shortly on 5 April gives one a net (look through the immediate dividend due), entry price for future income of just $3.05. ($3.15 less 10 cents back in almost no time at all).

Based on a net purchase price of $3.05 and the average broker forecasted gross dividends above gives a gross forecast FY23 yield of 11.4% (34.72 / 305) rising to a gross forecast FY24 yield of 12.3% (37.5 / 305)

The PE next year is less than 9. Freight in the current half was up 111% on the already very high rates prevailing in the previous corresponding period and at some point that was normalize. On a deep review of the result yesterday it is very impressive how they have weathered this storm and come though with no debt and a very robust cash position so yes I think they are in a very good position going forward.

In addition they seem to be reading the room very well with their new marketing extoling the virtues of their "value" product offering.

Well positioned is an over used phrase on here but it seems that's exactly how they are placed to weather the challenges ahead. Sooner or later we will come through this Covid mess and the shares won't be $3.05 then.

Disc: My rating after a thorough review of the result is is BBB - Beagle busy buying.

[Waltzing]

Yes but thats if they meet those targets.

Profits some others are higher ratios.

yes true no term liabilities.

good cash position.

But one suspects a IT problem that could blow out.

Are not the NPAT ratio's higher on the other 2 retailers?

still at 3-2.30 its a low p/e

shacky IT operation with stuff sprawling all over the place by the looks.

I doubt they know what they have where. Still if the market likes it who cares for a while?

going on what the market is paying for HLG and Brisc DIV it is undervalued by a long way but their NPAT ratio's are higher.

[Rawz]

Haha Beagle you are too much.
In out in out. Bad good bad good.

Next you'll be telling us The Market is the greatest thing in the world :p

I guess holding WHS for the div is better than cash.
But cant see any growth here. Its got the reasonable priced part but no growth.

There is some major headwinds ahead for retail with consumer spending restraints, increasing rates, wages not keeping up with inflation. A lot feathering the nest has occurred. How many fridges and TVs has Noel Lemming sold earlier than customers would have otherwise bought them. Tough tough times

[Beagle]

Haha Beagle you are too much.
In out in out. Bad good bad good.

Next you'll be telling us The Market is the greatest thing in the world :p

I guess holding WHS for the div is better than cash.
But cant see any growth here. Its got the reasonable priced part but no growth.

There is some major headwinds ahead for retail with consumer spending restraints, increasing rates, wages not keeping up with inflation. A lot feathering the nest has occurred. How many fridges and TVs has Noel Lemming sold earlier than customers would have otherwise bought them. Tough tough times

LOL - Mate it was a sell at $4.10...I called it clearly to a lot of ridicule on here but I was right. Apart from the profit being more than 10% north of where I thought it would be yesterday two things really surprised me. I thought all the nesting expenditure on household appliances at Noel Leeming was all done and dusted by early 2021 but Noel Leeming sales held up incredibly well in the circumstances with so many stores closed for so long and the second thing is the cash on hand down from $160m at the start of the period to still being really healthy at $150m after the huge dividend payment in November was quite frankly, quite remarkable. I think in the circumstances of what happened in that 6 month period with a 107 day lockdown hell in Auckland, they have come through the period in very good shape, far better than I expected.

Tough times yes, but they are very well positioned to weather the challenges ahead and have already read the room and adapted their marketing to target customers current value centric thinking. Not changing what I think about Nick's big gamble on the market at any stage, unless of course it works lol

You're not wrong...I have truckloads of cash earning almost nothing.