WHS - Warehouse Group

[Muse]

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.

Good stuff.

One issue with those marketscreener consensus forecasts is they are lagged in 2 ways. 1) it takes time for analysts to update and release their forecasts and 2) marketscreener are often prohibited from incorporating it for up to a week - with their very expensive CapIQ platform getting first dibs on that data, but it might be broker specific.

Case in point - Jarden just dropped their TP on WHS by nearly a dollar, and gutted their npat and dividend forecasts by 20%. None of that in marketscreener. Other analysts reports are being released in next 24 hours.

On the standing live consensus - personally I give the WHS about 1 chance in 4 on achieving those next 3 year divie forecasts.

Still - with so much fat in those prospective dividend yields the calculus of it being a good dividend stock doesnt change if the consensus falls 20%

[Waltzing]

even if the dont reach the targets its still a low p/e and a high gross div with IMPCR.

[Beagle]

Good stuff.

One issue with those marketscreener consensus forecasts is they are lagged in 2 ways. 1) it takes time for analysts to update and release their forecasts and 2) marketscreener are often prohibited from incorporating it for up to a week - with their very expensive CapIQ platform getting first dibs on that data, but it might be broker specific.

Case in point - Jarden just dropped their TP on WHS by nearly a dollar, and gutted their npat and dividend forecasts by 20%. None of that in marketscreener. Other analysts reports are being released in next 24 hours.

On the current consensus - personally I give the WHS about 1 chance in 4 on achieving them

I know that mate but analysts have a track record of getting this wrong and I posted yesterday I didn't expect WHS to meet average analyst forecasts for FY22 - FY24 so that's already baked into my thinking. On another subject, interesting looking TA, clear break up through the 30 day MA. I would expect the average analyst price target to come back to the mid $3 range and gross yield forecast to be about 10% which is still to the best of my knowledge the highest yield of the market. I'm certainly not suggesting this is a jump in boots and all situation, there's plenty of challenges ahead for retail as we've all discussed at great length already.
Disc: 5 % portfolio allocation up from 0% first thing yesterday.

[Waltzing]

"about 10% which is still to the best of my knowledge the highest yield of the market."

the detail in the preso did seem to say "we are working very very hard to do stuff"

and we are customer focused...

Just missing the the hello in the morning how are you!

in many languages...

be interesting if they can get into mini super markets but that is something they should only attempt if they sort out their IT first.

[winner69]

I betcha Nick is having chats with his marketing teams and trying to get them to think differently how they get some UGC content out there.

He would have heard that there's a shift in focus from influencer content to user-generated content. UGC is seen as heaps more authentic form of content than that from other influencers and that UGC was 8.7x more impactful in making purchasing decisions than influencer content.

Looking forward to the first big thing

[winner69]

WHS have been a reliable dividend payer for many many years .....not as long as HLG have but on a par this century

That's good

Mr Tindall's Foundation always appreciative of the regular cash injection so they continue with their good work

[Waltzing]

having no Term liabilities as MR B has pointed out and current is only stock on hand means they are free to pay out a bigger portion in div then say HLG which is in growth mode.

But the other 2 have a higher ratio NPAT winner(*n)

also winner(*n) check out the chart with pastels on A4... big line on the bottom at 2.20....

[winner69]

having no Term liabilities as MR B has pointed out and current is only stock on hand means they are free to pay out a bigger portion in div then say HLG which is in growth mode.

..

Always good to have your creditors fund your working capital .... payables at 600m .....but expected to normalise by year end .... that'll use up 150m of the cash mountain ......but then they would have sold all that Chinese New Year stock so still racking the cash

[Waltzing]

winner(*n)

YUP

notice how now that the great reflation is over people are actually having to read the FY JUNK statements to find some sort of meaning for results going forward.

those on line web sites have some stats but really how accurate are they?

some people here with maths skills are nearly matching the pros if not bettering them.

[CD_CHCH]

"about 10% which is still to the best of my knowledge the highest yield of the market."

the detail in the preso did seem to say "we are working very very hard to do stuff"

and we are customer focused...

Just missing the the hello in the morning how are you!

in many languages...

be interesting if they can get into mini super markets but that is something they should only attempt if they sort out their IT first.

Delivering our strategic priorities:

Build a customer ecosystem
• Engage new and existing customers by solving their needs and wants better
• Offer a rewarding, seamless and frictionless customer experience

Build the future experience
• Meet & exceed changing consumer expectations
• Optimise store footprint and develop supply chain
• Provide “What I want, where I need it, when I choose”

Invest in our infrastructure to excel in retail fundamentals
• Material progress on core system replacement
• Scoping of further core investment
• Maintained long term financial security

PowerPoint Presentation (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389213/367104.pdf)

Now see if you can spot any similarities below:

"We have delivered an improved result as the transformation programme delivers. We have closed under-performing stores and we are better articulating our proposition with shoppers....the challenge remains to better articulate our proposition in store and online. We continue to reposition to ensure our stores:

 are in the right locations;
 are of a size most suitable to that location; and
 deliver an offer that resonates with regional tastes.

 We have refined our brand identity
 We have invested in our people
 We have invested in our future
 We have also refined our product range

We need to improve and invest in systems that give us better visibility on inventories. This investment means we will be better able to respond to the sort of market fluctuations we have seen over the past year. Finally, we are now more focused than ever on optimising our gross margins. We are now carefully reflecting on the data we collect and our observations of market dynamics. This means regular review of category strategies, quickly moving to rid ourselves of aged stock and making the most of our national reach and scale to ensure we can offer competitive prices."

307022.pdf (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCY/340431/307022.pdf)

Lets hope WHS are better at executing their plan than SCY were....

[Waltzing]

" Material progress on core system replacement"

yeah right!!!! what a load of market junk and will turn the IT departments grey with fear!

but as recession talk is all over CNBC last night and today WHS still goes higher!!!!

[Waltzing]

who buying, who's buying !!!

https://www.youtube.com/watch?v=zkHOVJINRD8

[winner69]

After 2 really bad quarters at end of last year JB HiFi reporting things are on the improve in NZ with Q3 sales (Jan/Mar) up 3%

Good signs for Noel Leeming (Q1 sales down 4.8% and Q3 up 0.5%) ...... should see a strong Q3 for them

Go WHS

[Beagle]

After 2 really bad quarters at end of last year JB HiFi reporting things are on the improve in NZ with Q3 sales (Jan/Mar) up 3%

Good signs for Noel Leeming (Q1 sales down 4.8% and Q3 up 0.5%) ...... should see a strong Q3 for them

Go WHS

I think WHS has some very interesting opportunities in the basic pantry staples field if they can act like a quasi Amazon N.Z.
Interesting article here https://www.msn.com/en-nz/news/national/3-24-versus-6-59-buying-groceries-from-australia-significantly-cheaper-than-nz-stores-newshub-test-finds/ar-AAVsZrA?ocid=msedgntp Gosh I am paying $11 for 90 grams of Maccona freeze dried coffee at New World which looks like an expensive addiction compared to Australian prices.

I have continued to add to my WHS position. They've been well and truly beaten down this year and are now a very good value opportunity here trading cum a fully imputed 10 cent dividend due very shortly. I was very impressed with their result.

[Waltzing]

"Maccona freeze"

usually buy at a coffee shop in euro when they have sales and bring back in the big bike wheel bags..packing for wheels instead of bubble wrap...

[percy]

WHS's Nescafe original 180g or 105 cups at $6.00 for us.

[Beagle]

WHS's Nescafe original 180g or 105 cups at $6.00 for us.

Yeah that was only $5 last year from WHS and a screaming bargain, still very cheap, but was too hard to this old mutt's tummy...good if you want to "get things moving through" if you know what I mean ;) Maybe WHS has a point when they say their pantry item product lines are a lot cheaper than Countdown ? I guess a little digging around on their respective websites could reveal a few truth's. Anyone got some spare time for a bit of digging ?

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389524/367458.pdf

CFO is hounding some up as well as this hound. I'm trying to buy more so I can hold more than the CFO or the CEO :D

[percy]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/389524/367458.pdf

CFO is hounding some up as well as this hound. I'm trying to buy more so I can hold more than the CFO or the CEO :D

Sounds like "the bigger fool theory" to me...lol

[Beagle]

Sounds like "the bigger fool theory" to me...lol

LOL or who is the more cunning hound.

[percy]

LOL or who is the more cunning hound.

Perhaps Snoopy.?
I do not think he holds any WHS.............................lol.

[Beagle]

Perhaps Snoopy.?
I do not think he holds any WHS.............................lol.

Bit worried about my ol mates breeding....Might be a bit of whimpey Poodle mixed in there lol. Maybe he's not a real dividend hound after all lol

[winner69]

OMG - queuing up in chilly conditions to buy a membership for a shop that is not going to open for months

Probably all loyal Warehouse customers

Queues form for Costco membership, months before opening

https://www.rnz.co.nz/news/national/463988/queues-form-for-costco-membership-months-before-opening

[Beagle]

Disc: I bought a lot more today, best income stock on the NZX in my opinion especially now that HLG dividends are less than 50% imputed.
Updated average analyst price target is $3.70 and consensus view is BUY. Not sure if all 3 analysts revisions are in there yet or not but at this stage https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/
Updated FY23 forecast is eps of 31 cps and fully imputed 23 cps in dividends = 23/0.72 = 31.94 cps gross inclusive of imputation credits.
Shares closed at $3.30 today so adding back the near term dividend, (goes ex 10 cent fully imputed dividend on 5 April) the net investment is $3.20 for 32 cents of gross forecast income in FY 2023 = 10.0% gross yield rising to 25 cps fully imputed in FY24 = 10.9% ! and those highly attractive yields are despite the share price rally this week.

Its not too late to get yourself well positioned for excellent income in the years ahead with WHS.

[Habits]

LOL or who is the more cunning hound.

Man it is a relief to see you switched on to this stock... it's been a downer these last few months listening to your yappy bark :)

[percy]

Yeah that was only $5 last year from WHS and a screaming bargain, still very cheap, but was too hard to this old mutt's tummy...good if you want to "get things moving through" if you know what I mean ;) Maybe WHS has a point when they say their pantry item product lines are a lot cheaper than Countdown ? I guess a little digging around on their respective websites could reveal a few truth's. Anyone got some spare time for a bit of digging ?

WHS's price for the Nescafe coffee still beats,Countdown,New world and Pak'nSave. .

[Joshuatree]

Man it is a relief to see you switched on to this stock... it's been a downer these last few months listening to your yappy bark :)

Hear hear.Ive ignored all the downramps from many and held through.Im not a trader on the nzx like some of them,minimalise paying commissions and the IRD are not interested in me .

[Beagle]

Man it is a relief to see you switched on to this stock... it's been a downer these last few months listening to your yappy bark :)

They have really impressed me with how resilient they've been in extraordinarily challenging trading conditions and come through after paying a ~ $60m dividend in November and all that time when so many stores were closed with the 107 day lockdown in the greater Auckland region and the balance sheet has remained exceptionally strong still with $150 cash on hand and no debt, down only $10m from the $160m last year ! To say I am really surprised how well they've coped in the extremely challenging conditions would be a real understatement. Kudos to management, they deserve it.

[Habits]

Can this coy Whs grow from here where they are now. They said 12 months ago they are looking for acquisitions but obviously did not have anything in mind when they said that. If they continue as they are they will still do ok with great yield for investors. Or are they actually going to take on the grocery kings in a meaningful way. Foodstuffs have divested their stake just in time

[Entrep]

Disc: I bought a lot more today, best income stock on the NZX in my opinion especially now that HLG dividends are less than 50% imputed.

Thoughts on STU in the income regard Mr B?

[Beagle]

Thoughts on STU in the income regard Mr B?

STU has been notoriously cyclical with its performance. The dividend is unimputed and its too early to say if they can be a reliable income payer going forward. Others will be better at guessing the current yield but is it sustainable over time and across economic cycles, that's the $64,000 question ? To me STU feels cyclical and FAR more speculative as an income source than WHS.

Things I look for when assessing stocks for their income potential.

1. How reliable have their dividends been ?
2. Have they proven they can pay good dividends right across the economic cycle ?
3. Is their dividend policy sustainable, i.e. are they paying out at a ratio that still enables the company to perform well ?
4. Are the dividends fully imputed ?
5. What is the gross yield ?
6. Is the gross yield sustainable going forward ?
7. Will dividends grow over time ?
WHS has the following dividend history, all fully imputed in calendar years
2021 35.5 cps
2020 10 cps
2019 17 cps
2018 16 cps
2017 16 cps
2016 16 cps
2015 16 cps
2014 19 cps
2013 21 cps
2012 20 cps
2011 22 cps
2010 30.5 cps
2009 31 cps
2008 21 cps
2007 52.5 cps includes 35 cps special
2006 16 cps
Total paid in 16 years $3.595 = 22.47 cps on average.

I could go back further if you like but I am sure you get the point that their dividends are reliable right across the business cycles even during the GFC. I think you can comfortably say WHS has an excellent track record as a high income stock. I also note their balance sheet is in excellent shape with $150m cash on hand and no debt so they are very well positioned going forward.

Average broker forecast for the next 3 years is
FY22 21 cps
FY23 23 cps
FY24 25 cps
Average over the next 3 years = 23 cps which is consistent with its 16 year average above noted at 22.47 cps.

Taking that average of 23 cps and accounting for imputation credits 23 / 0.72 = 31.94 cps which on a net investment of $3.20 ($3.30 less 10 cents back in a few weeks treated as part return of purchase price)
shows on average over the long run WHS is capable of paying you 31.94 / 320 = ~ 10% Gross Yield at a net $3.20 purchase price.

[nztx]

STU has been notoriously cyclical with its performance. The dividend is unimputed and its too early to say if they can be a reliable income payer going forward. Others will be better at guessing the current yield but is it sustainable over time and across economic cycles, that's the $64,000 question ? To me STU feels cyclical and FAR more speculative as an income source than WHS.

Things I look for when assessing stocks for their income potential.

1. How reliable have their dividends been ?
2. Have they proven they can pay good dividends right across the economic cycle ?
3. Is their dividend policy sustainable, i.e. are they paying out at a ratio that still enables the company to perform well ?
4. Are the dividends fully imputed ?
5. What is the gross yield ?
6. Is the gross yield sustainable going forward ?
7. Will dividends grow over time ?
WHS has the following dividend history, all fully imputed in calendar years
2021 35.5 cps
2020 10 cps
2019 17 cps
2018 16 cps
2017 16 cps
2016 16 cps
2015 16 cps
2014 19 cps
2013 21 cps
2012 20 cps
2011 22 cps
2010 30.5 cps
2009 31 cps
2008 21 cps
2007 52.5 cps includes 35 cps special
2006 16 cps
Total paid in 16 years $3.595 = 22.47 cps on average.

I could go back further if you like but I am sure you get the point that their dividends are reliable right across the business cycles even during the GFC. I think you can comfortably say WHS has an excellent track record as a high income stock. I also note their balance sheet is in excellent shape with $150m cash on hand and no debt so they are very well positioned going forward.

Average broker forecast for the next 3 years is
FY22 21 cps
FY23 23 cps
FY24 25 cps
Average over the next 3 years = 23 cps which is consistent with its 16 year average above noted at 22.47 cps.

Taking that average of 23 cps and accounting for imputation credits 23 / 0.72 = 31.94 cps which on a net investment of $3.20 ($3.30 less 10 cents back in a few weeks treated as part return of purchase price)
shows on average over the long run WHS is capable of paying you 31.94 / 320 = ~ 10% Gross Yield at a net $3.20 purchase price.


For WHS financial year 2020, No dividend paid - my friend, but I tend to look at the 5.0 cps Special on 16/2/2021 as relating back to the 2020 year .. maybe more of the 2021 should be allocated backwards due to overly Covid cautious directors on stumping up payouts ? :)

https://www.nzx.com/instruments/WHS/dividends

[Beagle]

Thanks for the correction, quite right, they declared a 10 cent 2020 interim dividend and then cancelled it when Covid first hit. I like that they're running a very high cash balance during Covid. Good conservative approach in uncertain times.

[Waltzing]

the investors seem to have forgotten that the Market was a concern? Now not a concern ?

NZ is a small country powered by it private sector. If a company gets it IT wrong it can be a big concern.

Can we forget the market or go forward keeping an eye on this as the DIV is high.

If they expand into super market sector how would this be funded?

Some term debt or a cut to the DIV?

well lot of water to flow under the bridge till then.

[Beagle]

Very attractive earnings and dividend metrics already have heavy losses from the market baked into them. 20-30% upside if they can be talked into discontinuing the market strategy in my opinion. By this years annual meeting there will be 3 full years track record of the losses from the market. Its highly likely I am going to have a lot to say about this at that meeting. Might even call Nick a reckless gambler with our money, that's bound to get a response lol (Hope security don't throw me out of the meeting before I get the chance to eat some sausage rolls lol).

[winner69]

Torpedo7 seems to be building up a fair bit of momentum.

A few more stores will give it a greater market presence and on line is working well for them. Often when a business reaches a certain size it takes off big time, methinks T7 is at this stage in its life

Could easily see them contributing something like $20m operating profit in F23 .... that'll help overall group growth

[winner69]

Very attractive earnings and dividend metrics already have heavy losses from the market baked into them. 20-30% upside if they can be talked into discontinuing the market strategy in my opinion. By this years annual meeting there will be 3 full years track record of the losses from the market. Its highly likely I am going to have a lot to say about this at that meeting. Might even call Nick a reckless gambler with our money, that's bound to get a response lol (Hope security don't throw me out of the meeting before I get the chance to eat some sausage rolls lol).

Tell Nick what you really think, no holding back.

If he a bit reluctant to answer just use the ‘I’ve got more shares than you so don’t fob me off’ trick

And if Chair Joan tries to placate you tell her ‘and I’ve got more shares than you as well’

[Waltzing]

" Its highly likely I am going to have a lot to say "

well this could be the high light of the market year!!!

POUND them! put them in the POUND!

[Beagle]

Tell Nick what you really think, no holding back.

If he a bit reluctant to answer just use the ‘I’ve got more shares than you so don’t fob me off’ trick

And if Chair Joan tries to placate you tell her ‘and I’ve got more shares than you as well’

LOL I love it. Got more than the CFO announced he had this week as well. If it all turns to custard I could quote them chapter and verse from Corporate Governance section on shareholder engagement from page 92 of their annual report, which under the heading
SHAREHOLDER RIGHTS AND RELATIONS

“The Board should respect the rights of shareholders and foster constructive
relationships with shareholders that encourage them to engage with the issuer.”
The Company is committed to providing a high standard of communication
to its investors. The Company believes effective communication
achieved by equal access to timely, accurate and complete information
allows investors to make informed assessments of the Company’s value
and prospects. Investor communication is governed by the Investor
Communications Policy.
The Company has an investor relations programme which includes
communication through:
• periodic and continuous disclosure to the NZX;
• annual reports;
• the Annual Shareholders’ Meeting (ASM);
• the Company’s website which includes financial and operational
information, and key Corporate Governance information; and
• analyst and investor briefings and roadshows.
Engagement with Investors
The Company values its dialogue with strategic stakeholders, institutional
and retail investors, and believes effective engagement benefits
both the Company and investors. ASMs, analyst and investor briefings
and roadshows provide an important opportunity for this dialogue.
Shareholders also have the opportunity to submit questions and
comments through investors@thewarehouse.co.nz
Emphasis added. Actually just looking at that last line I could start winding Nick up about the market losses before the annual meeting, now there's an idea !
When I get around to that I'll copy and paste the comments I send to that email address in here to encourage others to have their say direct to the company as well.

[alokdhir]

Something I learnt from WHS ...all that talk of $ 7 turnaround story fizzled at $ 4.20 ...and then all that back to $ 2.20 doom stopped at $ 2.88 ...

So its back in business at about mid range $ 3.30 ...fair value till it looks expensive again ....WHS does keep u well entertained ...it keeps spinning the same yarn :p

[Beagle]

Back on track for $7 now...what could possibly go wrong :lol:

[Beagle]

" Its highly likely I am going to have a lot to say "

well this could be the high light of the market year!!!

POUND them! put them in the POUND!



Make sure you have some WHS shares and you get free entry to the show :D

[777]

Back on track for $7 now...what could possibly go wrong :lol:


Costco....

[Baa_Baa]

Costco....

Aldi
Ikea
Amazon
Decathlon

[Beagle]

Costco....

One store, I'm trembling in my boots lol

[nztx]

One store, I'm trembling in my boots lol


Where did you spy $7 - my friend ? ;)

Foodstuffs must have missed that shelf before staged exit :)

[Waltzing]

DIV ratio to bank OCR could drive it there all on its own.

all they have to do is keep up the DIV.

[alokdhir]

Where did you spy $7 - my friend ? ;)

Foodstuffs must have missed that shelf before staged exit :)

U missed the point mate ...when he in then it goes to $ 7 ...when out ...it goes to $ 2...so make sure he stays in ...if anyone can ...Nick could not last time ...:p

[winner69]

all they have to do is keep up the DIV.

No reason why they shoudn't .... Stephen's Foundation loves the cash to keep his good work going

From TWG website past divies


Heading back to the glory days

2005 14.5
2006 16
2007 52.5
2008 21
2009 31
2010 30.5
2011 22
2012 20
2013 21
2014 19
2015 16
2016 16
2017 16
2018 16
2019 17
2020 0
2021 18
2022 10 so far

[Waltzing]

winner(*n), removed 2007, remove 2020.

now check the SP handle in direct relation to the Average SP in your data set.

notice something?

[Beagle]

Torpedo7 seems to be building up a fair bit of momentum.

A few more stores will give it a greater market presence and on line is working well for them. Often when a business reaches a certain size it takes off big time, methinks T7 is at this stage in its life

Could easily see them contributing something like $20m operating profit in F23 .... that'll help overall group growth
Yes winner, T7 making $20m profit would make a big difference. After all when group profit was $175 their contribution was zilch so future profits are all growth for the group. There's huge growth in outdoor and wellness activities. Why would anyone want to be stuck inside a hotel room watching movies' these days lol Get all the outdoor gear and get out there and make the most of the great outdoors and fresh air I reckon ! No plane trips or hotel rooms required !



Where did you spy $7 - my friend ? ;)

Foodstuffs must have missed that shelf before staged exit :)
At one point there I might have jumped the gun a bit with excitement about their growth in FY21 but hey, those numbers were huge that year ($175.5m) and that's after $20m in losses from the market.com so it shows what the WHS is capable of in the future !
Add say $20m from torpedo 7 to a strong year and if they stopped tipping $25m a year down the market rat hole potentially WHS could make ($175.5 + $20m + $25m) ~ $220m annual profit one year soon ! That's ~ 64 cents a share earnings and put a PE of 12 on that and oh my goodness that's even more than $7 !

[Waltzing]

SP is now repriced higher than Historically already though if you run winners(*n) data set.

That data set says Historically its always been an under performer from an SP perspective after removing the variances.

[Beagle]

Investors have just 6 trading days left to get in and enjoy the fully imputed 10 cent interim dividend. Last chance to buy cum dividend is Monday 4 April.

[Waltzing]

The SHAZ are moving in could this be the big change as MR B whips up the SHAZ into a buying frenzy.

T7? with shipping costs still moving up what the chance of its margins giving it that profit?

Not saying it cant happen but so far...

[winner69]

T7 will be cashing in on the latest ebike craze ……more people biking and using expanded cycleways ….and not using car as much cos fuel costs.

[LaserEyeKiwi]

The SHAZ are moving in could this be the big change as MR B whips up the SHAZ into a buying frenzy.

T7? with shipping costs still moving up what the chance of its margins giving it that profit?

Not saying it cant happen but so far...

See my post in the “retail stocks” thread - International shipping costs have now entered what looks like a steep downtrend over the last few weeks.

container index peaked at 10,400, now down to 8,400. (Still a long way to go though to get back to the pre-pandemic pricing under 4,000)

[Beagle]

T7 will be cashing in on the latest ebike craze ……more people biking and using expanded cycleways ….and not using car as much cos fuel costs.

One of my clients makes the small concrete barriers that enable cycleways to be developed as a part of existing roads and he has a vast forward order book the likes of which he's never experienced before and I've been acting for him for more than 25 years ! Huge growth coming in cycleways and all things outdoors for Torpedo 7. I see they're currently having a bike bonaza with up to 40% off. https://www.torpedo7.co.nz/

[Waltzing]

Those concrete cow troughs? those are hated by real cyclists and are not used in europe...

NZ cycle ways are very badly designed .. the concrete mess in hamilton was thankfully removed...

It was a joke...

If they need safe guards then the orange plastic reflectors are the best.

They need a new concept for barriers. Concrete is deadly for legs and carbon bikes, wheels and your head even with a helmet.

Container index might be down but china has no exit and hopefully there ports stay open.

The bike retail scene is a tough one and heavy discounting for get rid of stock is common.

[winner69]

Those concrete cow troughs? those are hated by real cyclists and are not used in europe...

NZ cycle ways are very badly designed .. the concrete mess in hamilton was thankfully removed...

It was a joke...

If they need safe guards then the orange plastic reflectors are the best.

They need a new concept for barriers. Concrete is deadly for legs and carbon bikes, wheels and your head even with helmet.

Hey waltz …I’ve recommended you to the Mayor of Wellington to fix the infamous Island Bay Cycleway

WCC very generous with rate payers ….. you could get zillions for designing it …..and if it’s cycle friendly you’ll get so many plaudits you could become famous.

[Waltzing]

Hey winner(*n) thats an engineering job and requires high level of maths. Remember all those suspension walk ways and cycle ways like the london thames one...

i think if your maths is up to the job your on the team!!!

we use a french engineer.

https://en.wikipedia.org/wiki/Millennium_Bridge,_London

[Waltzing]

Will the goods coming out of china hold up this year to stock the shelves of the likes of WHS?

they have no exit in site and in fact dont seem to have a vaccine that works very effectively and now the financial HUB is locking down.

[kaituna]

I understand that their buyers are looking at India.

[Beagle]

Will the goods coming out of china hold up this year to stock the shelves of the likes of WHS?

they have no exit in site and in fact dont seem to have a vaccine that works very effectively and now the financial HUB is locking down.

Lots of other sources as well as India too. There's always something to worry about in the world for any company but frankly there's no better income stock on the NZX than WHS. TRINA (there really is no alternative to stocks) is alive and well mate. This extract from this mornings CNBC briefing shows what a truly shocking quarter bond holders have endured

Bondholders are going to be in for some nasty surprises when they check their first-quarter statements in a couple of weeks. Because the losses are piling up.
In aggregate, bonds are down about 7% over the past three months--one of the worst quarters they've experienced since the 1980s, using the "AGG" bond ETF as a proxy.

[Waltzing]

YES TINA is why HLG has bounced but really why the SHAZ keep buying AIR and not these great stocks with DIV histories is a mystery.

actually BRIS is a company with less problems than WHS.

sometimes its not the highest DIV you want.

still WHS has made some great efforts in there apps which is paying off.

made the TINA comment a few days ago.

NZ needs to increase the size of its public listing and soon.

The current ADMIN is just not business friendly and the its time to forget the crash of 8n?

Yes still some terrible companies out there but it is TINA.

Its time to leave Clement Attlee behind.

[Beagle]

PE reflects BGP's pedigree and the yield of 4.58% plus imputation credits is heaps lower.

[Waltzing]

Indeed MR B knows his maths and its probably buitin...

Right now Mitigating risk is high.

WHS has a higher risk with it tangled array of technical imputs.

RISK and REWARD.

When the new IT platform delivers then the bottom line will reflect it and if you take the RISK you will be rewarded.

MR B hits the buy and sell button with the confidence of the PRO he his.

[winner69]

did a bit of click and collect at Noel Leeming this morning ......just some headphones to repleace the ones that Speedy Az tried out yesterday

Ordered this morning with 1 hour ready to collect (save the 6 bucks and time to get get delivered) and the store is just up from Speedy Az's beach.

Jeez - It was so easy! I had them in my hands seconds after walking into the store.....cool

All the stuff they've put in their preso's lately seems to be working ..... didn't shop around so hope I got a good price

[percy]

did a bit of click and collect at Noel Leeming this morning ......just some headphones to repleace the ones that Speedy Az tried out yesterday

Ordered this morning with 1 hour ready to collect (save the 6 bucks and time to get get delivered) and the store is just up from Speedy Az's beach.

Jeez - It was so easy! I had them in my hands seconds after walking into the store.....cool

All the stuff they've put in their preso's lately seems to be working ..... didn't shop around so hope I got a good price

What discount did you get with your Gold Card.?.
25% or more.?

[winner69]

What discount did you get with your Gold Card.?.
25% or more.?

Bugger, always forgetting about that Super Gold card .... maybe don't feel old enough

I will contact them to get what i missed out on back :)


Got a Fly Buy point :t_up:

[percy]

Bugger, always forgetting about that Super Gold card .... maybe don't feel old enough

I will contact them to get what i missed out on back :)


Got a Fly Buy point :t_up:

They will let you keep the Fly Buy point.
Good people to us senior citizens..

[winner69]

They will let you keep the Fly Buy point.
Good people to us senior citizens..

Red Sheds have a discount day once a month don't they

[percy]

Red Sheds have a discount day once a month don't they

5% off your purchases in-store at The Warehouse on the first Tuesday of the Month.
And
SuperGold card Tuesday in your local Countdown! Present your SuperGold card in-store at selected Countdown stores on a Tuesday to receive a 5% discount on your shop.
But wait there is more..
https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwj2x-2upOr2AhUNkmYCHaEWDx8YABACGgJzbQ&ohost=www.google.co.nz&cid=CAESauD2pXYjoUSHlRi8JYshbEobdKCqZgUL8xYDOG5I6r FMITLrMPscIe2kzVqeMZIeOnGjmDqBAK44qi7EQs11LGV9Un7R w9ogtHy2i8vG-R21b-QZWPK6TfONUsyAWwY-ltc3Xjxg4rdpi_w&sig=AOD64_3gQCl3EGy1WmDlOvu9al4lW4QZnQ&q&adurl&ved=2ahUKEwiap-WupOr2AhUuRmwGHXcmChQQ0Qx6BAgDEAE

[winner69]

A lot of people get a pay rise next week …..more cash in their hands good for WHS

And buscand train fares half priçe as well …..that’s even more for quitação few city people


even I get 20 bucks a week more ….cool

[Beagle]

Benefits and superannuation go up on 1 April too. More cash to splash at WHS.

[Habits]

Benefits and superannuation go up on 1 April too. More cash to splash at WHS.


Times are tough Beagle... those getting a benefit will be saving not spending the extra. :D

[iceman]

A lot of people get a pay rise next week …..more cash in their hands good for WHS

And buscand train fares half priçe as well …..that’s even more for quitação few city people


even I get 20 bucks a week more ….cool


But of course as you know those "pay" rises are not keeping up with inflation so unless WHS has found a magical way to avoid the ever increasing prices of their supplies, the "lot of people" may be buying fewer items, despite the pay rises ! Not good for WHS

[Beagle]

People still need the basics so the possibility of trading down in brands shouldn't be overlooked. e.g. Buy a name brand heater from Briscoes on so called sale for $119 https://www.briscoes.co.nz/product/1087679/goldair-11-fin-oil-column-heater-2000w-goc1611/ or a home brand heater with more grunt at normal price from WHS for $69 ? https://www.thewarehouse.co.nz/p/living-co-oil-heater-11-fin-2400w-black/R2629507.html

Same with duvets, sheets, appliances and a whole range of other items both stores have in stock. To their credit WHS have already changed their marketing to direct customers attention to the affordability WHS provides.

[percy]

People still need the basics so the possibility of trading down in brands shouldn't be overlooked. e.g. Buy a name brand heater from Briscoes on so called sale for $119 https://www.briscoes.co.nz/product/1087679/goldair-11-fin-oil-column-heater-2000w-goc1611/ or a home brand heater with more grunt at normal price from WHS for $69 ? https://www.thewarehouse.co.nz/p/living-co-oil-heater-11-fin-2400w-black/R2629507.html

Same with duvets, sheets, appliances and a whole range of other items both stores have in stock. To their credit WHS have already changed their marketing to direct customers attention to the affordability WHS provides.

Basics.
A crowded market where 20% mark up is seen a good requires incredible logistics and huge volumes.
Supplier rebates can mean the difference between profit and loss.As does supplier instore support.
Should you believe WHS can compete with Foodstuffs and Countdown on volume and buying margins,buy their shares.
Looking at customer's trolleys at Pak 'n Save ,Countdown and WHS tells me differently.
Comparing WHS with Briscoes is like comparing my wonderful 2004 Nissan with the latest Tesla.

[Beagle]

I'm happy with how WHS are travelling. I am very impressed with how they performed in the latest half year considering the extraordinary challenges they faced with a 107 day lockdown in the wider Auckland region. They came through that very well indeed and their balance sheet is in excellent shape with $150m in cash (43 cps) and no debt.
The metrics are compelling. They trade cum a 10 cent fully imputed dividend and the average broker price target is $3.70 https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/

[percy]

You are seeing a very well run business turning out excellent profits and divies.
I am seeing a different business.One that is trying to secure their future,yet they can not get their online channel profitable,infact trying to buy market share which is only increasing their online losses.Going down market with basics will mean a lot of time and effort for little or no reward.
I still have doubts over their foot print,which I expect they will try to reduce.
We see businesses like Briscoes and HLG building on their sound business model,with channels that work and are profitable.
I can see where HLG growth is going to come from,Aussie and US ,however I can not see where Briscoes or WHS growth is going to come from.
I also expect Costco will affect WHS,and possibly Briscoes,but not HLG.

[Beagle]

Some more red shed consolidation is to be expected. Store within a store will bring more efficiencies as will more self scanning checkouts. Don't forget WHS encompasses the extremely well run Noel Leeming and up and coming Torpedo 7.
Brokers are forecasting net profit of $98.7m rising to $107m in FY23 and $115m in FY24. Any rationalization of the spend on themarket.com would see those figures grow by ~ 25% and lead to an immediate commensurate share price appreciation in my opinion.
https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/

Where's the growth going to come from in FY23 and FY24 ? Well for a start its very unlikely there be another 107 day lockdown for 1.6 million people in the Auckland region.

eps is forecast at 31 cps in FY23 rising to 33 cps in FY24.
On a net price of $3.14 (3.24 - 10 cent divvy back shortly) that's a PE of only 10.1 in FY23 and only 9.5 in FY24.
One is paying a no growth PE but getting the growth in earnings for nothing and while you wait you're getting the best gross yield on the market of 10.8% (Average dividend forecast for FY23 and FY24 is 24.5 cps / 0.72 = 34 cps gross / 314 current share price)

I get it the others have more refined business models, (believe me mate I didn't come down in the last shower), and their pricing fully reflects that and the much lower yield reflects for example HLG's better growth prospects. You know I have a lot of respect for HLG but the current year PE of about 20 is at an all time high and their yield with the low level of imputation is at an all time low. I bought that stock when it was totally unloved (like WHS is now) on a dirt cheap PE and a gross yield of 15% @ $2.75. Now the yield is just on 5%.

I'm a value investor Percy. I stick to what I know works for the Beagle fund. I reiterate the forward yield is 10.8% and the average broker price target is $3.70 which on a dividend adjusted buy price of $3.14 gives a ~ 18 % upside on top of that outstanding yield.

Briscoes has been around for donkey's years so any comment they will affect WHS is baseless. If anything, people will be trading down in brands in the current environment. Costco, 1 store, wow, I am trembling in fear lol
Everyone was telling me HLG were done for back in 2016 with Zara and I forget all the other clothing retailers that were supposed to smash them into oblivion. Believe me, I've heard it all before many, many times.

[Waltzing]

Reminds me of HLG often being undervalued.

Market takes a while to feel comfortable with retail stocks.

MR B not often wrong...often ahead of the game.

[winner69]

Once things settle down a bit there's probably another $20m/$30m of efficiency gains to be made..... like the selling more with a little less trick

[Rawz]

Once things settle down a bit there's probably another $20m/$30m of efficiency gains to be made..... like the selling more with a little less trick

Probably $20m-$30m in covid costs to wash out as well.
WHS were one of the first companies to RAT test every single DC worker every day. And they paid them 30mins extra per day to get them in early to do the test so there wouldnt be any down time.

WHS gave workers a bonus or vouchers (cant remember which) for getting vaxxed. 150 bucks i think it was. Ill have to talk to my mate thats a manager there again. He said his temp worker budget went out the window this year because of people isolating at home.

Image a year without all these one offs.

Anyways, im not a buyer because i dont see looooong term value.

[percy]

Once things settle down a bit there's probably another $20m/$30m of efficiency gains to be made..... like the selling more with a little less trick

Going to need to sell a great deal more,when their margin on basics will be very little .
However, inspecting WHS's big Blenheim Road store on Saturday night I was impressed with their stock holding and layout.
Good time to look/shop as there were few other shoppers..Even bought a book that had been reduced a number of times from $35.00 down to $8.97.

[Beagle]

Probably $20m-$30m in covid costs to wash out as well.
WHS were one of the first companies to RAT test every single DC worker every day. And they paid them 30mins extra per day to get them in early to do the test so there wouldnt be any down time.

WHS gave workers a bonus or vouchers (cant remember which) for getting vaxxed. 150 bucks i think it was. Ill have to talk to my mate thats a manager there again. He said his temp worker budget went out the window this year because of people isolating at home.

Image a year without all these one offs.

Anyways, im not a buyer because i dont see looooong term value.

Must admit, I hadn't really considered all the extra one-off costs of Covid as a separate issue from all the effects of the lockdowns but as you suggest, that's definitely a material extra cost the business is currently carrying.
Once all this settles down and we enjoy a year without all these extra Covid costs and effects its going to be awesome and then they can get back to the job of getting more efficiencies from their store within a store, retail footprint optimisation and self checkout reducing staff numbers.

[winner69]

WHS spent $75m on consultants and restructuring over the last 5 years

Benefits were starting to come through and its a bit of a shame that covid has stopped them getting the full benefits of this work.

But they'll all come through in due course .... as I said earlier post maybe $20m annually

[Beagle]

The future is so bright Percy is blinded to it lol

[percy]

The future is so bright Percy is blinded to it lol

You missed ........a word or two.....Happily blinded....lol\
https://www.google.co.nz/imgres?imgurl=https%3A%2F%2Fktwop.files.wordpress. com%2F2017%2F07%2Frumsfeld.png&imgrefurl=https%3A%2F%2Fktwop.com%2F2017%2F07%2F22 %2Fknown-unknown-and-unknowable%2F&tbnid=NxapHRNyLtWirM&vet=12ahUKEwisgpTG5ez2AhUngGMGHYYgBPYQMygZegUIARDq AQ..i&docid=NffO3lfqDZ-gXM&w=1202&h=638&q=there%20are%20known%20knowns%20quote&ved=2ahUKEwisgpTG5ez2AhUngGMGHYYgBPYQMygZegUIARDqA Q

[pierre]

The future is so bright Percy is blinded to it lol

Percy is not often blinded by anything IMHO. He is generally pretty consistent in his views on the value/prospects of companies, while there are some posters on here whose views tend to change with the wind.

Guess it depends whether you are an investor buying shares in a business for income and long-term gains, or a trader gambling on the prospect of getting lucky with a quick win. Either option is OK - it's just a bit of a challenge sometimes to identify which "side of the mouth" some of the comments are coming from.

[winner69]

The future is so bright Percy is blinded to it lol

Percy did say that he was impressed with their stock holding and layout of big Blenheim Road store

That is some endorsement

[percy]

Percy did say that he was impressed with their stock holding and layout of big Blenheim Road store

That is some endorsement

I also found their online experience was first class.Easy and fast delivery.
If they can ever make it profitable, they could greatly reduce their bricks and mortar foot print,and face the future with some confidence.

[winner69]

Perc said earlier ...yet they can not get their online channel profitable

Not quite right

As Lasereyekiwi points out '.... their online sales were $335.62 million for the half year, an absolute monster of an online business.' ...could say $700m annually

I'd say that they make at least $200m margin on those sales .... thus very profitable

The WHS online activity is going great guns .... and one needs to remember that TheMarket.com is a stand alone brand / concept .... that part is not profitable

[Waltzing]

The Market; does it need to be profitable for WHS profits to continue to grow? sure helps though.

[Entrep]

Some more red shed consolidation is to be expected. Store within a store will bring more efficiencies as will more self scanning checkouts. Don't forget WHS encompasses the extremely well run Noel Leeming and up and coming Torpedo 7.
Brokers are forecasting net profit of $98.7m rising to $107m in FY23 and $115m in FY24. Any rationalization of the spend on themarket.com would see those figures grow by ~ 25% and lead to an immediate commensurate share price appreciation in my opinion.
https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/financials/

Where's the growth going to come from in FY23 and FY24 ? Well for a start its very unlikely there be another 107 day lockdown for 1.6 million people in the Auckland region.

eps is forecast at 31 cps in FY23 rising to 33 cps in FY24.
On a net price of $3.14 (3.24 - 10 cent divvy back shortly) that's a PE of only 10.1 in FY23 and only 9.5 in FY24.
One is paying a no growth PE but getting the growth in earnings for nothing and while you wait you're getting the best gross yield on the market of 10.8% (Average dividend forecast for FY23 and FY24 is 24.5 cps / 0.72 = 34 cps gross / 314 current share price)

I get it the others have more refined business models, (believe me mate I didn't come down in the last shower), and their pricing fully reflects that and the much lower yield reflects for example HLG's better growth prospects. You know I have a lot of respect for HLG but the current year PE of about 20 is at an all time high and their yield with the low level of imputation is at an all time low. I bought that stock when it was totally unloved (like WHS is now) on a dirt cheap PE and a gross yield of 15% @ $2.75. Now the yield is just on 5%.

I'm a value investor Percy. I stick to what I know works for the Beagle fund. I reiterate the forward yield is 10.8% and the average broker price target is $3.70 which on a dividend adjusted buy price of $3.14 gives a ~ 18 % upside on top of that outstanding yield.

Briscoes has been around for donkey's years so any comment they will affect WHS is baseless. If anything, people will be trading down in brands in the current environment. Costco, 1 store, wow, I am trembling in fear lol
Everyone was telling me HLG were done for back in 2016 with Zara and I forget all the other clothing retailers that were supposed to smash them into oblivion. Believe me, I've heard it all before many, many times.

Mr B, you've charmed me sir. Added more today.

[Beagle]

Welcome on board mate. Next dividend payment date is 26 April just in time for us to do some shopping for winter essentials. :)

[Joshuatree]

Mr B, you've charmed me sir. Added more today.

Ok who on here we selling today ehhhhhh?

[Habits]

Mr B, you've charmed me sir. Added more today.

The charming Mr B is like a magnet. He sees through the negatives, spots the positives and makes WHS very 'attractive'.... Mr B says Whs is a 'steel'

[Beagle]

13659
Working through WHS attractive fundamentals - The numbers definitely add up :t_up:

[winner69]

The Warehouse’s grocery expansion likely ‘more creep than big bang’ says analysts

Headline in NBR

What’s the guts …thanks

[JohnnyTheHorse]

The Warehouse’s grocery expansion likely ‘more creep than big bang’ says analysts

Headline in NBR

What’s the guts …thanks

Might be able to pick up a sub with your increase in super? ;)

[Waltzing]

Not much action on this SP... market very cautious on retail. Market might want to see progress before it takes more of a position.

[winner69]

Lots of dog talk on retail thread so pallets of dog food at the Red Sheds is relevant

Tux Original Meat biscuits at $45 for 20kgs seems a great deal.

Should sell even more now households have to trade down to cheaper cuts …..pets not excluded

Speedy Az doesn’t have Tux …even though a retired professional sporting great he still gets the real stuff like Coprice Working Dog - $65 for 20kg any delivered from local Seed and Food Barn

But Warehouse should do well with their dog tucker ……good range of other pet stuff as well at good prices

[Waltzing]

WHS might actually be a bit of a trading stock from here on in rather than HOLD for DIV as its up side is limited.

Not as if W(^n) it going to double in value any time soon.

[Beagle]

WHS might actually be a bit of a trading stock from here on in rather than HOLD for DIV as its up side is limited.

Not as if W(^n) it going to double in value any time soon.

I disagree and can see them doing $140-150m per annum once Covid is in the rear view mirror which could see dividends of 30 cps fully imputed a possible forward gross yield of 13% ! in 3-4 years time. I think the consumer is still in good shape with much reduced credit card balances after spending so much time confined last year and unable to travel. This is very much a counter cyclical buy for me. All people can see at this point is the consumer is under pressure. I foresee it differently.

On CNBC this morning they are saying 30-40% of consumers will be trading down in brands from name brand clothing and stuff to generic brand stuff like WHS sells. Companies like WHS selling consumer staples will prove to be very resilient. I see Walmart and Dollar General are doing well in the US market so consumer staples are a good place to invest in these uncertain times...and then there's the yield projected for FY23 of 10.9% !

[bull....]

looking for a new corner desk , warehouse stationary has half the range out of stock ..... wonder how well there sales are going with such out of stocks

[Beagle]

Product substitution has been going on for a long time now. You buy whatever product does the job best you can get your hands on. Freight rates are coming down. WHS for example paid 111% more in shipping charges in the last half than in the previous corresponding period, which itself was at elevated level's. Yes the current supply chain is a problem and NO it won't always been this way.

Try buying a new EV and see what the stocks are like lol

[winner69]

…

All people can see at this point is the consumer is under pressure. …….

!

Spot on …..punters / commentators / economists sucked into thinking there’s a crisis ….and it makes for good media. Love how we see consumers being interviewed on the TV news saying it’s a crisis blah blah blah …..they never interview people who would say yep prices going up but they always do and we’ll manage.

There’s always been a number of consumers ‘under pressure’ so what’s new these days …talk of ‘crisis’ just noise…….. but it sounds good.

NZ retail will be OK ….esp WHS stores whose sales in F22 will still be over $3.4 billion

[winner69]

From CNBC (naughty reading such a site) but if NZ consumers think same way as US ones Warehouse will do OK (and Turners will like it that delaying purchase of car is a “last resort” measure to get by.)

If nothing else interesting

[Beagle]

Thanks Winner, excellent post. A lot of people don't understand what consumer staples are. Many think its just food and beverages but the term also covers household goods, see Investopedia https://www.investopedia.com/terms/c/consumerstaples.asp#:~:text=The%20term%20consumer% 20staples%20refers%20to%20a%20set,of%20their%20bud gets%20regardless%20of%20their%20financial%20situa tion.

Staples include household goods like a new washing machine or fridge from Noel Leeming because your old one just died, a new cellphone for your teenager because she just lost her's, again, some new generic brand winter clothing from WHS for your kids to keep them warm in winter, some cheap Easter eggs so you can have some happy times with an Easter egg hunt at Easter time and so on.

WHS, Noel Leeming generally sell consumer staples, things you buy regardless of where we are at in the economic cycle.

Excerpts "More importantly, the consumer staples sector has outperformed the S&P 500 during the last three recessionary periods—or periods of negative growth in the gross domestic product (GDP). Due to their low volatility, consumer staples stocks are considered to play a key role in defensive strategies".

KEY TAKEAWAYS


Consumer staple stocks represent companies that are noncyclical because they produce or sell goods or services that are always in demand.
Characterized by steady if unspectacular growth, the consumer staple sector is a haven in for investors in recessionary times.
Consumer staples stocks can be a good option for investors seeking consistent growth, solid dividends, and low volatility.

Gee that honey on special this week is really, really cheap, almost a luxury item these days for some families but definitely a consumer staple at that price ! https://www.thewarehouse.co.nz/c/food-pets-household/food-drink?dclid=CKiphPXNgPcCFVSErAIdNn0Nkw

[dameofdiv]

Product substitution has been going on for a long time now. You buy whatever product does the job best you can get your hands on. Freight rates are coming down. WHS for example paid 111% more in shipping charges in the last half than in the previous corresponding period, which itself was at elevated level's. Yes the current supply chain is a problem and NO it won't always been this way.

Try buying a new EV and see what the stocks are like lol

It's one year wait from Tesla...that I know...

[bull....]

with china locking down shanghai and what about a bigger outbreak means freight will take longer and those out of stocks i was mentioning will get bigger as china manufacturing machines grinds to a halt
:scared: the shelves be empty have to fill them up with kiwi made lol
thats right we dont make anything here anymore

[Waltzing]

might be some bargain here soon, already down to 3.07...

now hopefully MR B has the percentage he requires ...

[winner69]

Westpac survey on this so-called ‘cost of living crisis’

….44 percent were shopping at cheaper stores

https://www.rnz.co.nz/news/national/464863/consumers-spending-less-on-fuel-groceries-and-takeaways-as-prices-rise

[Waltzing]

3 SP looking good but wont stay there for long already some waiting on that handle.

come one winner(n) get over to RAKON and check out the P&L.

[Habits]

I note that the mighty Mr Beagle is now Mr Banned.... woof into thin air (paw joke sorry)

[blackie]

I note that the mighty Mr Beagle is now Mr Banned.... woof into thin air (paw joke sorry)

BOOO! beagle banning baadd.
boring blighters!

[Old mate]

What for this time?

[Grimy]

What for this time?

Check the FPH thread.
Never mind-it's gone.....

[RupertBear]

What for this time?

Same as last time, personal attacks on Couta. He cant seem to help himself :(

[850man]

Same as last time, personal attacks on Couta. He cant seem to help himself :(

I'm pleased to see Couta back after an absence, he's got a lot to offer to this forum as has Beagle. Shame we cannot stick to business, no need to make it personal. People will not always agree, that's fine. Differing opinions are great, we need to hear all perspectives.

[LaserEyeKiwi]

https://i.stuff.co.nz/business/128327606/the-warehouse-seriously-considering-move-into-grocery-sector-with-low-priced-items

[Baa_Baa]

I'm pleased to see Couta back after an absence, he's got a lot to offer to this forum as has Beagle. Shame we cannot stick to business, no need to make it personal. People will not always agree, that's fine. Differing opinions are great, we need to hear all perspectives.

Both Couta and Beagle have disappeared from the members list.

[Waltzing]

3.05 wonder if sub 3 is coming up...bouncing around a bit . HLG leaking down today.

BRISC appears to be the least volatile.

[Waltzing]

https://www.stuff.co.nz/business/128327606/the-warehouse-seriously-considering-move-into-grocery-sector-with-low-priced-items

MR B maybe proved right again...

[Habits]

https://www.stuff.co.nz/business/128327606/the-warehouse-seriously-considering-move-into-grocery-sector-with-low-priced-items

MR B maybe proved right again...

Even if grocery margins are tight with little extra profit, it should still bring more customers into store. Which is a very good thing.

[Habits]

3.05 wonder if sub 3 is coming up...bouncing around a bit . HLG leaking down today.

BRISC appears to be the least volatile.

Are you sure about BRG, maybe down 20 percent from peak.

[Waltzing]

Yes BRISC took a big hit earlier but hopefully is forming a new base here?

WHS got a little advert support on METSERVICE....

first time seen an Advert from them on the MTS weather site.

MetService - Te Ratonga Tirorangi (https://www.metservice.com/national)

[Davexl]

Nice to see WHS bucking the market trend, just might well continue over time - up 2.6%, update now 3.6%, update now 4.3%...
All aboard while you can!
Also rising interest rates will provide a tailwind, with a higher dollar.

[winner69]

WHS driving more customers into stores

Only the start ….momentum building

Retail relief: The major NZ store slashing the price of groceries as cost of living skyrockets

https://www.newshub.co.nz/home/money/2022/04/the-warehouse-drops-price-of-basic-groceries-as-cost-of-living-skyrockets.html

[Waltzing]

Maybe force the big G stores to cut a little?

[winner69]

Market loving all this talk of selling groceries to help ordinary Kiwis through this cost of living crisis

But it will be enduring ...... and getting bigger and bigger over time

Share price up 6% today....to 322

Better in get in quick as might be 350 by end of week .....FOMO ---action needed now

wouldn't be surprised to see Nick on the TV news tonight

[Waltzing]

Winner() all the action is over on AIR.

back to 3.16 ...

bit of a day trade

3.12 ...

does not appear to have hit the after burners W(n) ...

[winner69]

Initial stages of telling consumers they have consumer staples ….and cheap consumer staples at that

Milk a consumer staple …….and 3 bucks sounds very cheap (mind you I don’t much grocery shopping these days)

[850man]

There is a lot of negativity towards the supermarket duopoly and rightly so when things like milk and butter are twice what they are in say the UK. Good on WHS for taking advantage of that situation. Draw people in for grocery staples, what else will they buy as well :t_up:

[Waltzing]

3.06 , sub 3? looking like a Bargain if the Div keeps up.

[Davexl]

More good news for Warehouse customers & shareholders

https://www.newshub.co.nz/home/money/2022/04/the-warehouse-drops-price-of-basic-groceries-as-cost-of-living-skyrockets.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+1 3+April+2022

[Waltzing]

Without MR B these forums are almost dead today.

WHS was one of his big new positions and the stock price has stalled..

They are going to need some bigger sheds and much bigger car parks.

[Rawz]

Without MR B these forums are almost dead today.

WHS was one of his big new positions and the stock price has stalled..

They are going to need some bigger sheds and much bigger car parks.

Share trader goes quiet when the markets drift lower

[Waltzing]

"markets drift lower"

great time to top up on those share that your light on?

[Habits]

Bigger sheds and carparks eh

Can go multi storey but I think that is not popular. Could be a changing trend

[Waltzing]

some red / pink shed's have very small car parks and are not in locations that allow for increased traffic.

super markets in central wakatoo have large car parks.

Amazon just added an inflation surcharge.

https://www.cnbc.com/2022/04/13/amazon-slaps-us-sellers-with-5percent-fuel-and-inflation-surcharge.html

wonder if click and collect will face similar increases but fuel prices are coming off highs.

WHS shaping up to be competitive with this DIV if they can control costs.

Its going to be a tight next 12 months for retail stocks.

[couta1]

Same as last time, personal attacks on Couta. He cant seem to help himself :( A public thankyou to yourself/Percy/Fiordland Moose and Justakiwi, you guys(and gals) rock with integrity.

[Habits]

Hillcrest in Ham-milktown has a giant carpark but other warehouses not so much. Make a start expanding hillcrest warehouse, lots of nearby construction that has and is happening on that side. They would need 200 carparks min as well as bicycle for all the enviro conscious

[Beagle]

Mrs B bought some 400 thread count pure cotton queen size sheet sets from WHS yesterday, where I suggested she go, for just $55 each.
Flannelette 100% cotton sheet sets were just $29 each.

Important to understand which companies are "consumer staples" and which companies aren't. (Michael Hill asnd Kathmandu are good examples of "consumer discretionary" stocks).

Briscoes have 400 thread count Queen sized sheet sets on super special this Easter weekend for $129, more than double WHS regular price. Hmmm...
I have seen countless examples of Briscoes goods on so called special selling for more than double what you can get them for at WHS but good on Rod Duke, he's make a king sized fortune selling things on so called sale and making people believe in sales where they think they've bought well.
Is Briscoes also a consumer staple company ? I would argue they are because they sell basic household goods that people need, albeit at very creative prices.

[Greekwatchdog]

WHS don't sell quality brands so go for Brand vs Brand Beagle to understand a real price comparison. Your looking at a straight Apple vs Orange comparison. So an accountant thats all you look at, price before quality. Go look at Electricals as another example.

Whilst I hate BGR they are a marketers dream.

[Habits]

Welcome back Beagle... hitting the ground running.

[Beagle]

Agree I am not a connoisseur of what makes the best sheets but 400 thread count pure cotton sheets compared to 400 thread count pure cotton sheets is a pretty close comparison.
The Briscoes sheets do however have a nice contrasting blue thread on one edge so you do get a little bit of embellishment by paying more than double the price and they do look a bit nicer https://www.briscoes.co.nz/product/1095009/hotel-and-home-400tc-marrow-stitch-sheet-set/ but who looks at the sheets while in bed lol
https://www.thewarehouse.co.nz/p/living-co-sheet-set-cotton-400-thread-count/RM110151071-3M.html
Anyway...I have to try hard to spend the 5 figure dividend I have coming on 26 April so I suggested to Mrs B she get a jump start this Easter. Suggesting to her to "have a bit of retail therapy" with the credit card this Easter at the WHS might not have been such a good idea in hindsight...I wonder how many chocolate Easter bunnies she will bring back tomorrow...that could be dangerous :eek2:

[Greekwatchdog]

Depends what your doing in bed I guess. If your desperate to spend it tell her to book a holiday somewhere warm. WHS don't sell those thankfully..

[Beagle]

Depends what your doing in bed I guess. If your desperate to spend it tell her to book a holiday somewhere warm. WHS don't sell those thankfully..

Usually watching telly or sleeping at our age lol. We're not getting on an aircraft and breathing in all that "lovely" recirculated expelled air anytime soon...

[Greekwatchdog]

Usually watching telly or sleeping at our age lol. We're not getting on an aircraft and breathing in all that "lovely" recirculated expelled air anytime soon...

Its here forever can't hide from it....Hey heres a thought is the WHS selling any of these rich Russian Oligarch's super yachts cheap? Must be a lot going round. New market for them..Holiday sorted.

[Habits]

Why doesnt the warehouse give their stores a small amount of pizzazz or designer feel. Nothing grand but something subtle. Even around the entrance or checkouts or the clothing area. Just a few niceties for some feel good shopping instead of what they have always done cheap cheap, bulk and airy barn style. I'll admit I am not a retail maestro, (am very good at what I do in other industries), but most shoppers like more than a discount shopping experience and a bit embarrassing to mention where they shop. It's even better when getting a genuine saving as well a pleasing shop. If cheap feel was the right one then the mall's would try that. They get literally millions of customers per year

[Beagle]

I hear what you're saying but the cost would be astronomical. HLG, for example have done a great job making their stores very stylish but wooden floors and stylish displays are not cheap and that's for a very small retail footprint. Noel Leeming stores are already very nice.
I'm confident in the current environment there will be a lot of brand substitution the likes of which I've talked about this morning whereby consumers will want affordable goods as compared to some brand where they pay more then twice the price for essentially the same thing. e.g. Would you rather be a Mercedes-Benz dealer in the current economic environment or own a Turners car yard ?

[Beagle]

Welcome back Beagle... hitting the ground running.

With all 4 paws ;) Thanks mate.

[Habits]

It's possible it would not take much. A semi-retired colour consultant used to help us enormously, she was cost conscious and also charged little, happy to give expertise. Similar with a garden designer we consulted, he would draw the plans and we would implement. These two people added huge value, as it is about perception and feel.
The WH store I go to often, has appliances on special and end of summer stuff on special in the foyer. They are always looking random and placed haphazard, and with printed price signs falling off and curling. The look makes you wonder about the quality. I dont know if the price is even that amazing.

[Baa_Baa]

With all 4 paws ;) Thanks mate.

Your Inbox is full, not receiving PM's.

[nztx]

It's possible it would not take much. A semi-retired colour consultant used to help us enormously, she was cost conscious and also charged little, happy to give expertise. Similar with a garden designer we consulted, he would draw the plans and we would implement. These two people added huge value, as it is about perception and feel.
The WH store I go to often, has appliances on special and end of summer stuff on special in the foyer. They are always looking random and placed haphazard, and with printed price signs falling off and curling. The look makes you wonder about the quality. I dont know if the price is even that amazing.

As an obviously hardened WHS customer you're not supposed to be able to make it past those offers
just inside the door of Older, end of line & we must quit this before it walks out by itself offers - before
progressing onto their newer Specials :)

[nztx]

With all 4 paws ;) Thanks mate.


Welcome back Mr Beagle - missed your postings here :)

[Beagle]

Welcome back Mr Beagle - missed your postings here :)

Thanks mate :)

I've created some space in my inbox Baa Baa

Habits, I agree with you, a bit more colour and maybe some nice plants around the entrance way wouldn't go amiss but at the end of the day its always going to feel like a warehouse. Doesn't put me off, I like cheap and cheerful at Warehouse or Noel Leeming.

[Beagle]

Its here forever can't hide from it....Hey heres a thought is the WHS selling any of these rich Russian Oligarch's super yachts cheap? Must be a lot going round. New market for them..Holiday sorted.
Not Warehouse selling or Russian Oligarch's either but this might be me. Not sure if the model description or name is what's described but in the add's narrative its described as "Stray Mutt" so is probably the right boat for me lol https://www.trademe.co.nz/a/motors/boats-marine/motorboats/listing/3481870763?bof=ZBNvFBaS

[Greekwatchdog]

Not Warehouse selling or Russian Oligarch's either but this might be me. Not sure if the model description or name is what's described but in the add's narrative its described as "Stray Mutt" so is probably the right boat for me lol https://www.trademe.co.nz/a/motors/boats-marine/motorboats/listing/3481870763?bof=ZBNvFBaS

That might not make it in the WHS parking lot...

[Beagle]

That might not make it in the WHS parking lot...

LOL...might have to "slum it" down at Westhaven marina instead. Have to confess I'm a bit confused by the add...described as Stray Mutt but then the narrative goes on to talk about the boats pedigree. I wish they'd make up their minds one way or the other lol

[Greekwatchdog]

LOL...might have to "slum it" down at Westhaven marina instead. Have to confess I'm a bit confused by the add...described as Stray Mutt but then the narrative goes on to talk about the boats pedigree. I wish they'd make up their minds one way or the other lol

LOL Just maybe its destined for the BGR yard. You never buy better. 50 to 70% off!!!

[winner69]

BusinessDesk has a great article about WHS ....maybe paywalled

https://businessdesk.co.nz/article/on-the-money/on-the-money-eroad-the-warehouse-chris-castle-and-more

Mums are raving about the cheap butter .....thousands of comments on a Facebook page

[Beagle]

657 Pet products, WOW...hang on a minute isn't pet care a real growth area !
Your Speedy Az would look dashingly handsome in one of those tartan coats this winter mate. https://www.thewarehouse.co.nz/c/food-pets-household

[Beagle]

Consumer staples and financials have done well on the US market year to date. For example check out the chart on Dollar Tree https://www.marketscreener.com/quote/stock/DOLLAR-TREE-INC-4868/ on a current year PE of 22. (No dividends at all, what the heck ?)

Good we have a consumer staples company we can invest in here on a really compelling PE of about half that and average 10.8% gross yield in FY23 and FY24. We should be so lucky to have such opportunities and count our blessings every time a huge fully imputed dividend comes in...roll on 26 April :t_up:

[Waltzing]

Missed MR B chair leading the retail sector on the NZX.

Prices holding up well and WHS certainly staying in a very attractive range.

[Waltzing]

"consumer discretionary spending retrenchment has only just started and has a LONG way to go"

Mr B has stated possible recession ? or govt spending keeps going ?

impact on NZ retail sector?

[Beagle]

Consumer staples, WHS will outperform and Briscoes should do okay. Consumer discretionary will be hit pretty hard I reckon. Kathmandu and Michael Hill look vulnerable to me. HLG somewhere in the middle, some effect, hard to predict how much.
My 2 cents.

[Waltzing]

Worth more then 2 cents for sure.

looks very accurate assessment. MHJ may continue its miracle perhaps. Defying logic but with WHS under cutting supermarkets its looking more and more like a winner().

[pierre]

Robertson definitely will be chucking around some more of the borrowed money in his May budget to "offset the cost of living crisis".However, while will have his eye on next year's election, he will mainly keep his powder dry for the 2023 lolly scramble. Both events will be good for WHS, BGP and probably HLG.

[Habits]

"count our blessings every time a huge fully imputed dividend comes in...roll on 26 April "

34,684,312.00 Total dividend to be paid.

Will you and Mrs B get a big helping of dividend Beagle.

[Beagle]

"count our blessings every time a huge fully imputed dividend comes in...roll on 26 April "

34,684,312.00 Total dividend to be paid.

Will you and Mrs B get a big helping of dividend Beagle.

5 figures mate. Not sure I can spend all that at WHS / Noel Leeming even with Mrs B's help. Might have to run my own dividend reinvestment plan as well and buy some more :)

[Muse]

5 figures mate. Not sure I can spend all that at WHS / Noel Leeming even with Mrs B's help. Might have to run my own dividend reinvestment plan as well and buy some more :)

I don't think it is convention to include the two digits after the decimal point?

[Waltzing]

Pressure on incomes from interest rates rises. Record levels of unemployment mitigating the canary..

https://www.stuff.co.nz/business/128396590/world-watching-nz-housing-market-as-auckland-labelled-canary-in-coal-mine

[Beagle]

Brokers remain really bullish with an average price target of $3.70 and a BUY rating.
Forecasting 20 cps fully imputed dividends this year rising to 24 cents in FY23 and 25 in FY24.
FY23 PE only 10.3 and FY24 only 9.6 and eps rising nicely from 29 cps this year to 31 cps and 33 cps in FY24.
https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/
I remain of the view the consumer staples are the best area of retail in the prevailing environment.
I think WHS advertising "Hey small spender" and then promoting a range of discounted grocery staples hits the nail on the head perfectly for the times we live in and is a very good plan to get more people into their stores.

[Waltzing]

WHS a buy then in spite of head winds and some messy software to sort out...

Thank you MR B.

[Beagle]

WHS a buy then in spite of head winds and some messy software to sort out...

Thank you MR B.

You're most welcome mate. Yes, plenty of room for improvement in their systems which will be earnings accretive going forward.

[couta1]

I don't think it is convention to include the two digits after the decimal point? Creative accounting. Lol

[Beagle]

Silly questions / comments don't get answered. Its not about me, its about this companies ability through selling consumer staples to be a superb income generator for all shareholders.

[Habits]

"eps rising nicely from 29 cps this year to 31 cps and 33 cps in FY24."

Seems slow growth, maintaining inflation rate. Does this forecast allow expansion into grocery retailing etc

[Beagle]

"eps rising nicely from 29 cps this year to 31 cps and 33 cps in FY24."

Seems slow growth, maintaining inflation rate. Does this forecast allow expansion into grocery retailing etc

Consumer staples companies tend to be modest growth. This is an income stock first and foremost with 10.8% gross average forecast yield for FY23 and FY24. I think the rate at which they expand their grocery retailing is a matter that's currently a work in progress. Lets see what the company has to say about their future plans in their full year report in due course.

[winner69]

Consumer staples companies tend to be modest growth. This is an income stock first and foremost with 10.8% gross average forecast yield for FY23 and FY24. I think the rate at which they expand their grocery retailing is a matter that's currently a work in progress. Lets see what the company has to say about their future plans in their full year report in due course.

At today's price and multiples one could say you are getting free option on the future success of grocery sales in WHS

That's cool

[Sideshow Bob]

At today's price and multiples one could say you are getting free option on the future success of grocery sales in WHS

That's cool

I wouldn't say that option would be worth alot. Many wouldn't have coinfidence in the WHS to execute.....;)

[Beagle]

At today's price and multiples one could say you are getting free option on the future success of grocery sales in WHS

That's cool

I think that hits the nail directly on the head. There's no question in my mind that there's never been such a head of steam with consumer resentment towards the incumbent supermarket duopoly that are taking consumers to the cleaners every time they shop so the current environment certainly provides a very fertile ground for WHS expansion.

[winner69]

I think that hits the nail directly on the head. There's no question in my mind that there's never been such a head of steam with consumer resentment towards the incumbent supermarket duopoly that are taking consumers to the cleaners every time they shop so the current environment certainly provides a very fertile ground for WHS expansion.

You never know they might even be encouraged and supported by the government to make it happen ..... stranger things have happened

[Rawz]

These massive profit margins the super markets are marking... going to be easy for WHS to slip in and get a piece of the pie. Looking forward to reading about all the dollars they are making off groceries in the coming reports.

Mind you, might be a couple of periods of losses while they get their systems sorted. But much like the Market its a long term game

[bull....]

warehouse sales will fall next report my pick.
out of stocks is getting worse and with the lockdowns in china making port congestion worse and delays to deliveries this is not good for all retailers.

[Beagle]

Yes well that's a pretty safe bet because for most of this quarter Omricon has been rampant. Chinese are starting to try and open things up.
To be clear, investing now I am investing taking a "look through the immediate short term challenges" approach. I believe if you wait for spring time to invest for the November dividend, on the balance of probabilities the price then will be higher than it is now but I agree that we live in interesting times. This is a medium to long term investment for me. My plan is to simply replace income from work with income from WHS and "others" so I can get even more semi retired than I already am. "Others" are probably going to be lifting my stakes in HGH, TRA, ARG and GNE which are all strong income generators.

[Waltzing]

WHS unaudited to jan 2022 reported sales lower than last year and inventories up.

looks like they may have a small reserve in place and perhaps they like many other companies around the world will be looking to diversify the supply chain.

no one want to be stuck anymore with supply from country's that have high political risks.

[Rawz]

Waltz- the only retailer to increase sales is MHJ??

[Habits]

Zb afternoon host read out a text of how cheap the butter etc are at Whs. Wonder who sent it, smart move

[Waltzing]

"increase sales is MHJ"

snowed under with software this winter. Need another large curved screen up rotating dash board of info to remember.. Was just looking at MHJ result again!!!!

hard to believe!!!

and re checking WHS inventory and sales.

FY22Q3 (13 weeks)

-----------------------LYQ3-- YTDQ3 ----VAR
Total all stores AUD 118.5 131.6 11.1%

perhaps winner() can find something very wrong beneath the surface.

[Beagle]

Good positive indicator for retail generally over the last few months. Notably I see N.Z. sales were up 3% so some encouragement there on the domestic front with N.Z. retail spending.

[Waltzing]

"sales were up 3%"

SP's on the retail stocks seem a bit stuck and perhaps forming a base here. The market doesnt want to get to far ahead with inflation pushing down on them by the looks.

of course if they can maintain the DIV's it does provide an opportunity to ACCUMULATE.

BUY HOLD SELL ACCUM.

[nztx]

Waltz- the only retailer to increase sales is MHJ??


Those Canadians opening their wallets ? :)

Never mind .. WHS might have job suitably buttered up to make up in the next period ;)

[bull....]

of course if they can maintain the DIV's it does provide an opportunity to ACCUMULATE.

BUY HOLD SELL ACCUM.




whs has a very lumpy history of div payouts .

[Waltzing]

Publish the AVE DIV a while back after winner published the numbers since early last decade.

New management seems to want to hike the DIV and push the SP up perhaps because it build into performance incentives to come.

C suite salaries to increase along with performance share options parcels.

doesnt accept bitcoin yet but you never know..

[Muse]

whs has a very lumpy history of div payouts .

Even I wouldnt say that Bull

[Beagle]

"sales were up 3%"

SP's on the retail stocks seem a bit stuck and perhaps forming a base here. The market doesnt want to get to far ahead with inflation pushing down on them by the looks.

of course if they can maintain the DIV's it does provide an opportunity to ACCUMULATE.

BUY HOLD SELL ACCUM.




Yes I think accumulate on any untoward weakness is a good strategy and expansion of food is currently priced as a free option.
Government certainly making plenty of noise as are consumers. https://www.msn.com/en-nz/news/national/supermarket-duopoly-with-possibly-too-much-market-power-reason-growers-dumping-veges-parker/ar-AAWs4vw?ocid=msedgdhp&pc=U531&cvid=354e80702fd949e69e0dea76f7088ab6

I think Nick is copying Walmart, (up 11% YTD in the US) who are also making waves against the supermarket chains there. Walmart doing well in the US as consumers change their buying behavior for generic basic brands. Incidentally, Walmart is on ~ 29 times FY22 earnings, pays a 1.6% dividend yield and is the street rates it a BUY
https://www.marketscreener.com/quote/stock/WALMART-INC-4841/financials/
Plenty of love for Walmart by the experts on CNBC.

Bull - I posted the details of WHS superb track record of dividends a few pages back. Please go and have a look at that post before making nonsense claims about WHS dividend track record. The average dividend overt the last 20 years or so including during the GFC is about 23 cps which is about 32 cps gross. I posted average analyst dividend expectations going forward yesterday, 20 cps, rising to 24 cps in FY23 and 25 cps in FY24.

WHS also do really good work in the community, see 18 pages of it here https://www.thewarehousegroup.co.nz/our-brands/the-warehouse?ccm_paging_p=1 and paid back the wage subsidy, (about $60m from memory) so there are elements of feel good about investing in them too.

[bull....]

my comment was in relation to recent yrs , i do not consider prior to that as relevant anymore as the business environment was totally different

[Beagle]

1. How reliable have their dividends been ?
2. Have they proven they can pay good dividends right across the economic cycle ?
3. Is their dividend policy sustainable, i.e. are they paying out at a ratio that still enables the company to perform well ?
4. Are the dividends fully imputed ?
5. What is the gross yield ?
6. Is the gross yield sustainable going forward ?
7. Will dividends grow over time ?
WHS has the following dividend history, all fully imputed in calendar years
2021 35.5 cps
2020 10 cps (declared but subsequently withheld due to Covid concerns)
2019 17 cps
2018 16 cps
2017 16 cps
2016 16 cps
2015 16 cps
2014 19 cps
2013 21 cps
2012 20 cps
2011 22 cps
2010 30.5 cps
2009 31 cps
2008 21 cps
2007 52.5 cps includes 35 cps special
2006 16 cps
Total paid in 16 years $3.595 = 22.47 cps on average.

I could go back further if you like but I am sure you get the point that their dividends are reliable right across the business cycles even during the GFC. I think you can comfortably say WHS has an excellent track record as a high income stock. I also note their balance sheet is in excellent shape with $150m cash on hand and no debt so they are very well positioned going forward.

Average broker forecast for the next 3 years is
FY22 21 cps
FY23 23 cps
FY24 25 cps
Average over the next 3 years = 23 cps which is consistent with its 16 year average above noted at 22.47 cps.

Taking that average of 23 cps and accounting for imputation credits 23 / 0.72 = 31.94 cps which on a net investment of $3.20 ($3.30 less 10 cents back in a few weeks treated as part return of purchase price)
shows on average over the long run WHS is capable of paying you 31.94 / 320 = ~ 10% Gross Yield at a net $3.20 purchase price.

Dividend track record is above.

[bull....]

so if 22 full yr div is less then 35c then last few yrs are up down up down maybe a pattern or will it revert to long term decline like way back ( still to be decided ) lets see how costco go

[Beagle]

If its not for you that's fine bull. I'm really impressed with their dividend track record across a range of business cycles.
Of course things got lumpy during Covid, like they have for almost everyone else.
1 store of Costco that's running well behind schedule. I'm really scared lol

Can you name me a single other company on the NZX that's forecast to pay more than 10% gross average yield in FY23 and FY24 ?
Please, I am all ears if you can name any other company paying that !

[winner69]

Maybe Nick has to have a few chinwags with Greg Foran to get some Walmart ideas

[bull....]

If its not for you that's fine bull. I'm really impressed with their dividend track record across a range of business cycles.
Of course things got lumpy during Covid, like they have for almost everyone else.
1 store of Costco that's running well behind schedule. I'm really scared lol

Can you name me a single other company on the NZX that's forecast to pay more than 10% gross average yield in FY23 and FY24 ?
Please, I am all ears if you can name any other company paying that !

you could be proven right but they do have some headwinds and it is not a given 10% + will last

[Beagle]

you could be proven right but they do have some headwinds and it is not a given 10% + will last

Yes there are some headwinds and I've acknowledged that many times. Its a forecast, and no forecast is a certainty but again, I would refer you to their superb long term track record of strong dividend payments across many business cycles. The best and most reliable guide to the future is the past.

[Jay]

As I said before a high dividend yields usually do not last, so either the dividend is cut or the share price increases, I think the latter!

You don't get a bargain all the time at the sheds - a cereal we buy $7.50 at WHS and $5.99 at the supermarket

[Rawz]

Classic dividend trap?

WHS margins are going to be squeezed big time in the next couple of years

[BlackPeter]

Classic dividend trap?

WHS margins are going to be squeezed big time in the next couple of years

Why would you say that?

Transport costs already on the downtrend.

Fuel cost will go down as well (after the big reshuffle of the oil sources)

Rent and property prices will stagnate (or even drop a bit) - this started as well

Product cost will be the same (or less - big buyer) as what their competitors are paying

So - why do you think their margins will be squeezed?

[Rawz]

Why would you say that?

Transport costs already on the downtrend.

Fuel cost will go down as well (after the big reshuffle of the oil sources)

Rent and property prices will stagnate (or even drop a bit) - this started as well

Product cost will be the same (or less - big buyer) as what their competitors are paying

So - why do you think their margins will be squeezed?

WHS have some major labour costs to deal with over the next couple of years and moving into food with what i understand are poor DC systems is going to hurt even more i reckon

[Beagle]

Classic dividend trap?

WHS margins are going to be squeezed big time in the next couple of years

No problem if its not for you mate. Average analyst forecast is for steadily growing earnings and dividends and that's on a dirt cheap PE and the average analyst price target is $3.70. I guess people see what they want to see.
I see a long and highly credible history of excellent fully imputed dividends and forecasts suggesting that will continue.

[winner69]

In the erly 2000's I was part of a study that a few retailers were undertaking as to whether there was a trend from consumers 'trading up' to one of 'trading down'. Warehouse was one of the participants and we had the benefit of being assisted by a consultant with a lot of global knowledge of consumer trends. The timing coincided with the arrival of big box retailers like Bunnings into NZ and the likes of Warehouse were a bit concerned about what may happen.

The conclusion we came to was that if done well 'Cheap is Good'. But what I thought was fascinating was that the 'trading down' market was estimated to be about double the size of the 'trading up' market ...... and that when consumers became a 'trading down' one (usually when times became tough) that attitude stayed with them for some time.

Maybe these things came and go and we could be seeing a new wave of 'trading down' consumers .... and they will stay that way for some time.

Might try and find the report ….got it somewhere

[bull....]

Classic dividend trap?

WHS margins are going to be squeezed big time in the next couple of years

see what your saying. most retailers might have the same problem

[Beagle]

WHS - My rudimentary technical analysis thoughts. Someone else might like to post a chart over the last 6 months but to me this looks like its built a pretty good base in the low $3's since late January. TA experts will have their own theories but in my experience a base built over 3 months or more is usually a very good sign for the future. The fact its built this base while also going ex a 10 cent fully imputed dividend is something I find quite encouraging.

[850man]

encouraging to see the re emergence of grocery aisles in WHS these days and prices that are noticeably lower for staples than those of the duopoly

[see weed]

Nice block at 3.20. Someone holding sp there so they can accumulate more at lower price. Or is it my suspicious mind.

[winner69]

Nice block at 3.20. .

Jeez a block at $3.20 ..... the block I bought on Wednesday was $4.00

Keep reducing the price like this and the duopoly will be hurting

[Beagle]

I think he's talking about a block of shares mate. Not likely anyone could sell a decent block of cheese or butter for $3.20.

[Waltzing]

good things take time apparently....

https://www.youtube.com/watch?v=qcILD9OJ2wg

[peat]

WHS - My rudimentary technical analysis thoughts. Someone else might like to post a chart over the last 6 months but to me this looks like its built a pretty good base in the low $3's since late January. TA experts will have their own theories but in my experience a base built over 3 months or more is usually a very good sign for the future. The fact its built this base while also going ex a 10 cent fully imputed dividend is something I find quite encouraging.

I see impulsive moves yes and the wave pattern is very similar to HLG (see that thread) just started a bit later.
5 waves up and 3 waves down is how that theory works though I know no one here gives it much credence. Its already done the 62% retracement to 3.05 It will be a traders delight at 3.00 (strictly2.95 but the round figure could act as support) if it was to get there (78% retracement) with a stop at 2.85.

[Old mate]

https://www.stuff.co.nz/business/128363506/why-the-warehouse-failed-at-becoming-new-zealands-own-walmart-16-years-ago

Got to be a good time for the warehouse to be getting into groceries. $4 butter there the other day. Unreal.

[winner69]

https://www.stuff.co.nz/business/128363506/why-the-warehouse-failed-at-becoming-new-zealands-own-walmart-16-years-ago

Got to be a good time for the warehouse to be getting into groceries. $4 butter there the other day. Unreal.

Be good if Nick has some ‘friends’ in high places in government and the relevant government departments.

Needs that help to move things along


if it all works out no debate whether they are an essential service if we more lockdowns

[Greekwatchdog]

What a joke Grayson is, desperate fall. If WHS want to go into groceries go open your own supply chains and stop relying on Govt help. Did they need Govt help to open to supply chains out of China, Indonesia? No. Get off your arse Nick and get to work.

[nztx]

but the cheap Coffee & Buttering up on groceries is bound to get the boys & girls rocking in
and probably leaving more fully laden up ;)

The margins mightn't much in some of those grocery lines especially after cutting the 2 grocery competitor's
margins to shreds - but it gets the punters into store looking at other goodies :)

[peat]

that article sure talked about their failure to succeed last time they tried entering the grocery market.
<gulp>
they probably need to see it as a loss leader as someone suggested already. at least initially, because they will need to invest heavily to create that one shop experience. Without that, its dead in the water

[Beagle]

Its different this time. Consumers are livid with being fleeced by normal supermarkets. Walmart doing well using the same strategy at present.

[percy]

Percy's race through the supermarket check outs.
1st....Pak n Save.
2nd ..New World
3rd ..Countdown...slow.
4th.. Warehouse....Too few checkouts open so have to use self serve.,which I do not like doing.Not in the hunt,yet.

[moose]

Its different this time. Consumers are livid with being fleeced by normal supermarkets. Walmart doing well using the same strategy at present.

A very good point. Walmart has relatively few grocery lines concentrating on the everyday essentials, mostly non-perishable - usually a token gesture of fresh fruit and veg - with most food being packets/cans/frozen.

WHS would be wise to copy this model (and it looks so far like this is the plan)

[Greekwatchdog]

Its different this time. Consumers are livid with being fleeced by normal supermarkets. Walmart doing well using the same strategy at present.

Best they sort their supply chain and start chatting to green groceries and Meat Companies and all the multi nationals that sell to supermarket chains etc.. Then the huge cost to refit stores etc...Fridge/Freezes/Ovens etc are not cheap. I wonder if Grayson will go ask Jacinda for some money to do it.

Beagle are you prepared for the hard slog ahead as this is capital intensive and we all no how you hate seeing your dividends reduce.

[LaserEyeKiwi]

Agree that they look to be pursuing the Walmart setup to start with, which will mean just some basics in the “fresh” isle, with an easy supply chain setup for adding a frozen section (given the long shelf life of frozen goods).

I think they should get inventive and try to setup a joint supply chain with others. Eg they could partner with Moore Wilson’s in wellington/lower north island region (Moore Wilson’s have 3 wellington supermarkets & 1 in masterton). Try and find other similar operators in each region and roll up the efforts into a national supply chain.

[Beagle]

I think its going to be a gradual evolutionarily process dependent upon how much assistance they get to fight the current cartel.

[percy]

Agree that they look to be pursuing the Walmart setup to start with, which will mean just some basics in the “fresh” isle, with an easy supply chain setup for adding a frozen section (given the long shelf life of frozen goods).

I think they should get inventive and try to setup a joint supply chain with others. Eg they could partner with Moore Wilson’s in wellington/lower north island region (Moore Wilson’s have 3 wellington supermarkets & 1 in masterton). Try and find other similar operators in each region and roll up the efforts into a national supply chain.

That supply chain will never work.
ps.Fresh will kill them.

[Beagle]

LOL Kill is such an emotive word. WHS been around for 40 years.

[percy]

LOL Kill is such an emotive word. WHS been around for 40 years.

Zero years with fruit and vegetables.
Walk round the edges of any super market.That is where their profitable lines are.Fruit,veges,fresh fish/meat,bakery,
WHS will not manage any of them.

[Beagle]

Zero years with fruit and vegetables.

You're getting a long way ahead of yourself. They haven;t even said they're going into fresh produce.
I envisage an expansion of pantry goods and a new frozen goods section within existing floor space. If its done gradually and done right it will bring a lot more customers into their stores and be eps accretive. I don't think Nick wants to see his $4.10 shares he bought off me disappear down the gurgler do you...

[percy]

You're getting a long way ahead of yourself. They haven;t even said they're going into fresh produce.
I envisage an expansion of pantry goods and a new frozen goods section within existing floor space. If its done gradually and done right it will bring a lot more customers into their stores and be eps accretive.

Well every time I go to the supermarket I buy fruit,veges,etc.
I no longer go elsewhere for them.
Get everything ,one stop shopping.
I go to the supermarket once or twice a week, and visit the Warehouse about once every month or two,or three.
And that visit is usually for a specific item.

[Beagle]

A lot of people I know buy their fresh fruit and produce from their local fruit and vege store which are generally a lot cheaper than the supermarket cartel.

If WHS can expand their range of pantry and frozen goods significantly and their prices are at a material discount to the supermarkets then I think the WHS target demographic will be visiting their local WHS store more often. As their messaging clearly says these days,

The Warehouse, where everyone gets a bargain.

[LaserEyeKiwi]

That supply chain will never work.
ps.Fresh will kill them.

Joint ownership of a 3PL by downstream customers is indeed something that can work. One could argue that is exactly what the foodstuffs co-op is.

[LaserEyeKiwi]

A lot of people I know buy their fresh fruit and produce from their local fruit and vege store which are generally a lot cheaper than the supermarket cartel.

If WHS can expand their range of pantry and frozen goods significantly and their prices are at a material discount to the supermarkets then I think the WHS target demographic will be visiting their local WHS store more often. As their messaging clearly says these days,

The Warehouse, where everyone gets a bargain.

I think for the “well off” - just buying everything from the supermarket without even looking at the price on the receipt is normal behavior. I think that description probably applies to many people on this forum who would be considered “well off”. However for those not “well off”, which covers a large amount of the middle class, shopping around at different places for things is fairly common to maximize their limited budget. This is why places like the mad butcher and the local fruit & veg shop exist.

[percy]

A lot of people I know buy their fresh fruit and produce from their local fruit and vege store which are generally a lot cheaper than the supermarket cartel.

If WHS can expand their range of pantry and frozen goods significantly and their prices are at a material discount to the supermarkets then I think the WHS target demographic will be visiting their local WHS store more often. As their messaging clearly says these days,

The Warehouse, where everyone gets a bargain.

No longer any local fruit and vege shops in our area.
Closest is a Sunday Farmers Market, which seems to do well selling mainly organic produce.
However their sales would be a drop in the ocean compared to our local supermarkets'.
Pantry produce is not high margin,needs huge volume to be profitable.

[LaserEyeKiwi]

No longer any local fruit and vege shops in our area.
Closest is a Sunday Farmers Market, which seems to do well selling mainly organic produce.
However their sales would be a drop in the ocean compared to our local supermarkets'.
Pantry produce is not high margin,needs huge volume to be profitable.

I don’t doubt that. The situation changes dramatically from suburb to suburb depending on the socio-economic level. Go to the poorer suburbs in NZ cities and see 3-5 fruit & veg / butcher / discount food shops in the same retail area.

[Beagle]

No longer any local fruit and vege shops in our area.
Closest is a Sunday Farmers Market, which seems to do well selling mainly organic produce.
However their sales would be a drop in the ocean compared to our local supermarkets'.
Pantry produce is not high margin,needs huge volume to be profitable.

Good fruit and vege shop on the way to the supermarket so no driving deviation is needed for us !
Like I said earlier, I think WHS will take an "evolutionary" approach to its expansion in this area as opposed to a revolutionary one.
I feel content that the huge dividends, (next one will hit my account this afternoon, you beauty !!) are safe.
Can you name me a single other stock listed on the NZX where I can get a reliable and consistent 10.8% gross forecast yield ?

[percy]

Plenty of fruit and vege shops around here and they're on the way to the supermarket so no driving deviation is needed !
Like I said earlier, I think WHS will take an "evolutionary" approach to its expansion in this area as opposed to a revolutionary one.
I feel content that my huge dividends, (next one will hit my account this afternoon) are safe. Where else do you get 10.8% gross forecast yield ?

Look no further than Silver Fern Farms CoOp on Unlisted.

https://usx.co.nz/uploads/paperclip/documents/2497/original/Corporate_Actions_Sheet_-_Silver_Fern_Farms.pdf?1648677883

.NB.SFF are a huge part of NZ export group,earning valuable overseas funds to be used by large importers such as WHS.
ps.As you would expect I back earners rather than spenders..lol.

[Beagle]

Look no further than Silver Fern Farms CoOp on Unlisted.

https://usx.co.nz/uploads/paperclip/documents/2497/original/Corporate_Actions_Sheet_-_Silver_Fern_Farms.pdf?1648677883

.
I edited that post to where else on the NZX do you get a return like that ?
Its on the "Wild West" unlisted market and doesn't have a stellar track record of consistent dividends.
As the old saying goes, One Swallow does not a summer make.

Its a bit like saying STU might have a superior dividend yield. It might in a peak cyclical period but when you look at the track record over the last 5-10 years it doesn't have the reliability to count as a reliable high yield retirement income stock.

[percy]

I edited that post to where else on the NZX do you get a return like that.
Its on the "Wild West" unlisted market and doesn't have a stellar track record of consistent dividends.
As the old saying goes, One Swallow does not a summer make.

Three summers so far and next summer looks to be in the bag.
Even better yield, when my average cost price is about a third of the current share price.
Proves Unlisted ignored is profit missed.
ps.My two largest shareholdings are on Unlisted.

[Beagle]

As stated previously, when assessing the virtues of a yield investment I look at the long term track record going back at least a decade to see if its sustainable going forward and likely to be highly reliable right across various business cycles.

WHS has a fabulous long term track record going back more than 20 years. HGH also has a fabulous long term track record and their dividends consistently grow. These are two fine examples of high yield stocks that people can depend upon for strong retirement income. HLG another fine example albeit now with lack of imputation credits taking the gloss off it.

Meat companies have been cyclical since Adam was a boy. All good in good times but...

Each to their own way of doing things.

[winner69]

Percy - I heard you were the 'modest' one on this forum lol

[percy]

What's your yield on your PAZ shares.

As stated previously, when assessing the virtues of a yield investment I look at the long term track record going back at least a decade to see if its sustainable going forward and likely to be highly reliable right across various business cycles.

WHS has a fabulous long term track record going back more than 20 years. HGH also has a fabulous long term track record and their dividends consistently grow. These are two fine examples of high yield stocks that people can depend upon for strong retirement income.

Meat companies have been pure cyclical plays since Adam was a boy.

Each to their own way of doing things.

PAZ have incredible products which being mostly exported add to NZ's overseas earnings.
Demand has out stripped their production capabilities.
To meet demand for existing and new products ,two new state of the art factories are being built.
This will see PAZ being one of the most exciting listed companies in NZ.
AS people throug out the world grow more concerned with where,and how products are produced, PAZ are well placed in this huge growth sector.
ps.You are not keeping up with NZ meat companies.You could start by reading SFF annual report.
https://usx.co.nz/uploads/paperclip/documents/2518/original/SFF_2021_Annual_Report.pdf?1650403414

[Beagle]

Percy - I heard you were the 'modest' one on this forum lol

Probably best I don't comment on that :lol: