WHS - Warehouse Group

[Beagle]

I get it, the end of the world is nigh, according to you. I see it differently and even if they make only $90m after tax this year that's a PE of 12.5 times earnings that have been dramatically affected by lockdowns, many millions of extra Covid costs, supply chain and massive logistical and freight cost challenges.

I think if achieved, that would be a really resilient performance in extraordinary challenging times.

[Waltzing]

wasnt a big enough sell off ....

need another 1000 point down day ... 2 more at least...

trouble is it will likely now be cuts by a thousand knives and you wont know where the bottom is ..

big sell offs are the best ...

[Snow Leopard]

....even if they make only $90m after tax this year that's a PE of 12.5 times earnings.... ...in extraordinary challenging times.

PE max of 9 in these interesting times.
But best add a discount to that.

[Beagle]

PE max of 9 in these interesting times.
But best add a discount to that.

WHS do not deliver into your private universe so your opinion doesn't count :p

[percy]

WHS do not deliver into your private universe so your opinion doesn't count :p

Wrong.
As he is most probably ST's most respected poster it counts the most,since 2004..

[Beagle]

Wrong.
As he is most probably ST's most respected poster it counts the most,since 2004.. "in your opinion"

Got 6 cans of baked beans for $6, Huge 900 gram tin of Milo for $11.99 and a pair of nice Karki shorts for $15 yesterday from my local WHS store. Was pretty busy for a Wednesday afternoon. Incredible value for everyday Kiwi's !

WHS are strong ethical company supporting the lives of everyday Kiwi's with affordable consumer staples. If I bought those items from other stores it would have cost a lot more than $32.99 !

[winner69]

Budget - The Government reckons about 2.1 million New Zealanders will qualify for $350 over next three months

That's $735 million --- and WHS stores will get a chunk of it ..... that'll help them make the $100m profit this yearA


And cheap petrol and half priced public transport extended will help as well

At least $35m to WHS top line I reckon

[winner69]

Bugger - the $350 for 2.100,000 kiwis doesn't start until August

Too late to help WHS this financial year but a flying start to FY23

[Beagle]

Bugger - the $350 for 2.100,000 kiwis doesn't start until August

Too late to help WHS this financial year but a flying start to FY23

People will put extra winter spending on their credit cards and use the Govt support to help pay it off.
Keeping the reduced fuel excise levy going for a few more months will help as well.

[percy]

[QUOTE=Beagle;958053]

Got 6 cans of baked beans for $6,

Poor Mrs,Beagle.
Guess she will have to stay upwind.................lol.

[Beagle]

Poor Mrs,Beagle.
Guess she will have to stay upwind.................lol.

:lol: Just as well they were Oak brand but I'm not certain it makes much difference LOL https://www.youtube.com/watch?v=eZgD89VYkVc

[bull....]

[QUOTE=Beagle;958053]

Got 6 cans of baked beans for $6,

Poor Mrs,Beagle.
Guess she will have to stay upwind.................lol.

lol ...................

[Sideshow Bob]

[QUOTE=Beagle;958053]

Got 6 cans of baked beans for $6,

Poor Mrs,Beagle.
Guess she will have to stay upwind.................lol.

Good to see not lost your sense of humour Percy!

[Sideshow Bob]

Look what can happen to the price of branded butter when the supermarket duopoly is challenged - NZ Herald (https://www.nzherald.co.nz/business/look-what-can-happen-to-the-price-of-branded-butter-when-the-supermarket-duopoly-is-challenged/6TPZJNPAMYCKPIFRBVRFYDTSKU/) (Paywalled)

First sign of a few shots starting to be fired...??

WHS selling Tararua Butter at $4/pack whereas retails about $8.30/pack elsewhere.

[stoploss]

Look what can happen to the price of branded butter when the supermarket duopoly is challenged - NZ Herald (https://www.nzherald.co.nz/business/look-what-can-happen-to-the-price-of-branded-butter-when-the-supermarket-duopoly-is-challenged/6TPZJNPAMYCKPIFRBVRFYDTSKU/) (Paywalled)

First sign of a few shots starting to be fired...??

WHS selling Tararua Butter at $4/pack whereas retails about $8.30/pack elsewhere.
Nationally New World under their price rollback are now selling butter $ 5.50 for the same thing .
It looks like the petrol station you always goto matching the price of the new competitor across the road . Best support WHS so they can roll out more products .

[Habits]

Effective free marketing by using the media to promote your specials :t_up:

[winner69]

In news overnight on Wall St Dollar General and Dollar Tree put in huge performances - big increase in sales and profits as consumers move down market

Warehouse in good space at the moment

[Beagle]

In news overnight on Wall St Dollar General and Dollar Tree put in huge performances - big increase in sales and profits as consumers move down market

Warehouse in good space at the moment

Yeah I saw that mate, stunning performances. Value is the new cool.

[winner69]

Yeah I saw that mate, stunning performances. Value is the new cool.


Yep, WHS should do well as consumers with lower purchasing power tend to shift their purchases to the low-cost segment.

[LaserEyeKiwi]

Yep, WHS should do well as consumers with lower purchasing power tend to shift their purchases to the low-cost segment.

Big question is what this means for Noel Leeming, which doesn’t sell everyday consumables/durables - so its a question whether Noel Leeming sales are lost to the red sheds as people go for the cheaper electronics/appliance options, or are those sales just lost as people decide they can get another year out of their TV/phone/whitewear etc.

In saying that, Noel Leeming not quite as important for gross profits as one would think, given it actually has significantly lower gross margin (~22%) vs the other three brand segments (~40%)

[Habits]

Yep, WHS should do well as consumers with lower purchasing power tend to shift their purchases to the low-cost segment.
Retailers like whs should have advance figures of this shift if they have their finger on pulse such as customer counts. Is counting foot traffic still a thing that retailers do

[winner69]

Nick been quiet on Zoom Health .... wonder how much they've leveraged whatever since giving them some new cash

Nick said Zoom was part of his plans in building a customer ecosystem that leverages its brand strength, store network and customer base and “.... believe that the investment in this promising digital health company will complement our existing offer and our expertise in online retail and distribution"

Grencross mentioning PillDrop reminded me of WHS and Zoom

[winner69]

Had to queue to use self check out at Warehouse Lyall Bay today

Never had to do that before

And not everybody was buying the cheap butter

[kiwico]

And not everybody was buying the cheap butter

Did they actually have the cheap butter? I sometimes had a look after shopping at PNS Porirua but I've only found the cheap butter once and never seen Weetbix there. Other grocery stuff I might have bought appears to be the same price as PNS. It hasn't tempted me to have a look at any thing else - it's a quick dash to where the butter should be and then a look around as to where the Weetbix might be. I've now given up looking.

[Snoopy]

Did they actually have the cheap butter? I sometimes had a look after shopping at PNS Porirua but I've only found the cheap butter once and never seen Weetbix there. Other grocery stuff I might have bought appears to be the same price as PNS. It hasn't tempted me to have a look at any thing else - it's a quick dash to where the butter should be and then a look around as to where the Weetbix might be. I've now given up looking.


I had exactly the same experience in Christchurch. A sign saying butter was in short supply due to high demand. The little fridge unit was pretty small (in supermarket terms) and there was no butter in there. Just some processed Chesdale cheese slices.

I did get some copying done at the Warehouse Stationery 'Store within a store' though, even if there was quite a long wait to top up my copying card.

SNOOPY

[winner69]

Clark says we sort the buggers out …even if we have to unlock the store doors

And he’s got that Consumers Institute outfit and the media on his side pumping out all sorts of bad stuff about foodstuffs and countdown …they really are evil

Urgent warfare ..we can’t wait three years

Nick you are needed ….give Clark another ring …..you can help out

https://www.stuff.co.nz/business/300601335/supermarket-sector-in-for-major-shakeup-at-pace-with-government-introducing-new-regulations

[Beagle]

Good stuff. Great that the Government are determined to help stop Kiwi consumers being plundered by the incumbent highway robbers.

[Bobdn]

Ideally we'll get a chain of Government owned and run Department stores out of this. That will put the wind up the private sector.

[winner69]

The ‘Excessive profits of $1m a day” narrative sure has legs now fuelled by the media and other parties

However that claim based on flawed logic but heck it makes a good story …politically

Never mind if grocery bill cheaper than I’m all for it …but I reckon at the end of the day consumers will be the loser.

Next step might be government saying Warehouse and Briscoes make excessive profits ….isn’t there return on capital more than 5%

[850man]

Ideally we'll get a chain of Government owned and run Department stores out of this.

Final transition to communism completed

[Waltzing]

"Warehouse and Briscoes make excessive profits "

windfall profits tax .....

[winner69]

Bring back the Maximum Retail Price regime we once had

That’ll sort the crooks out

[Antipodean]

Funny how there never seems to be an issue for windfall government tax take.

[Hoop]

The reason for high margins (overpricing) is the purchasing population is willing to accept it....NZers (which I'm one) grizzle and groan but then go down to the expensive stores and buys the stuff anyway. Then they expect the Government to be their Nanny and "knee jerk" to help us purchase more at a cheaper price. NZers expectation of a group of 120 people (Parliament) to help the team of 5 million fuel their consumer addiction at a cheaper price during the fading stages of an economic boom is bizzarre when the answer is hidden in plain site..

Mind you, slowing down Consumerism is not good for the likes of the Warehouse shares.. eh. .Of note, the NZRB is currently attempting this in an round about way.

The chart below shows WHS price at an important technical conjuncture

13861

[Snow Leopard]

I like your blue dotted hindsight line :mellow:


...The chart below shows WHS price at an important technical conjuncture

13861

[Onemootpoint]

According to the article Minister Robertson indicated Aldi as a potential player in the supermarket space.

https://www.stuff.co.nz/business/300602164/aldi-one-of-the-players-considering-setting-up-in-nz-robertson-says#comments

[bull....]

The reason for high margins (overpricing) is the purchasing population is willing to accept it....NZers (which I'm one) grizzle and groan but then go down to the expensive stores and buys the stuff anyway. Then they expect the Government to be their Nanny and "knee jerk" to help us purchase more at a cheaper price. NZers expectation of a group of 120 people (Parliament) to help the team of 5 million fuel their consumer addiction at a cheaper price during the fading stages of an economic boom is bizzarre when the answer is hidden in plain site..

Mind you, slowing down Consumerism is not good for the likes of the Warehouse shares.. eh. .Of note, the NZRB is currently attempting this in an round about way.

The chart below shows WHS price at an important technical conjuncture

13861

what i posted a while too , just a bearish pattern playing out.
to days announcement by the govt wont help whs as it looks just like more pr rubbish hoping the supermarket people will get in line. nothing concrete just we will be watching lol

[850man]

According to the article Minister Robertson indicated Aldi as a potential player in the supermarket space.

https://www.stuff.co.nz/business/300602164/aldi-one-of-the-players-considering-setting-up-in-nz-robertson-says#comments

Well if a government minister is saying that it must be true. It's not like they have ever lied to us in the past, or maybe Robertson was just "being too specific" again

[winner69]

Well if a government minister is saying that it must be true. It's not like they have ever lied to us in the past, or maybe Robertson was just "being too specific" again

If Aldi or others are interested they should be asking Robertson for some hand outs / concessions

If one doesn't ask one doesn't get and government seems pretty generous with its corporate welfare

[BlackPeter]

If Aldi or others are interested they should be asking Robertson for some hand outs / concessions

If one doesn't ask one doesn't get and government seems pretty generous with its corporate welfare

That's the way they operate. Found a number of articles (though just in German) linking them to public subsidies. I am sure they will take the koha, if the overall package looks interesting enough for them :)

[Hoop]

I like your blue dotted hindsight line :mellow:
Me too...I would have liked it even more if I had acted on it with a short term trade (bear market strategy) Sadly I did not :(...Finding it hard these days to compete against the trading programs which instantly buy when the technical buy signals trigger off. by the time I discover it it is often too late.

[Waltzing]

just broke through 3.40.

nice support

[winner69]

It’s all go …govt keen

Costco going to christchurch I hear …and WHS still dead keen.

From Newsroom



► The Warehouse Group has been trialling bigger food sections in flagship stores at Albany and Ormiston, and has a future food strategy based on a lower price point for household staples. It dipped its toe in the water this year by advertising blocks of Tararua butter for $4.

The listed company is cautious about what it's saying publicly, after the two supermarket chains shut down its previous attempt to enter the grocery market.

Chief executive Nick Grayston welcomes the Government's intervention in the grocery market, saying New Zealanders "deserve better value than they’re currently receiving".

"We’re encouraged by the direction the Government is taking as wholesale access to supply at fair commercial terms is key to a more competitive grocery industry and ultimately lowering prices," he says.

"While little changes in the short term for other players like us to enter the grocery market in a bigger way, we are very focused on supporting Kiwi families and remain committed to offering New Zealanders greater value on grocery and pantry items."


https://www.newsroom.co.nz/govt-to-crack-down-on-supermarket-breaches-with-big-financial-penalties?utm_source=Friends+of+the+Newsroom&utm_campaign=9d0435fa9a-Daily_Briefing+01.06.2022&utm_medium=email&utm_term=0_71de5c4b35-9d0435fa9a-97970805

[Waltzing]

Will we see WHS move from the little Town Sheds to bigger store formats.

There is an empty Bunny(Bunnings) warehouse store in cambridge that needs filling. An exploding WakaToo Town with new retirement villages under construction and new mini suburbs .

Those NZ training centres arnt going anywhere as Auckland becomes a place athletes just want to get away from..

To dangerous for them to training in on roads and waterways..

[Waltzing]

Where is the barking chair leader here....

[winner69]

Minister Clark dead keen on forcing heaps of Countdown and Foodstuffs stores to sell up (pity the owner operators)

Clark could 'arrange' for TWG to buy them ..... but I reckon some Maori group would have the inside running.

Whatever happens .... we'll all end up paying more for groceries .... and even the Red Sheds will be able to increase margins on butter

https://www.stuff.co.nz/business/128891877/public-could-get-say-on-breakup-of-countdown-and-foodstuffs-early-next-year

[DazRaz]

Forced sale of privately owned assets. We should all be worried if they do that.

[850man]

Forced sale of privately owned assets. We should all be worried if they do that.
Similar to 3 Waters, yep we should be worried.

[Old mate]

So that's the same David Clark who got the sack for mountain biking during a lockdown when the minister of health? Now he's running this show. Gee the ole pollies have a good life:t_up:

[stoploss]

So that's the same David Clark who got the sack for mountain biking during a lockdown when the minister of health? Now he's running this show. Gee the ole pollies have a good life:t_up:
Jacinda didn't have the guts to sack him .......
He should have been in the beehive 24/7 , facing our biggest health crisis in a generation.
Left it all up to Ashley then stabbed him in the back at the first opportunity.
“Under normal conditions, I would sack the minister of health. What he did was wrong, and there are no excuses,” Ardern said in a statement.
“But right now, my priority is our collective fight against Covid-19. We cannot afford massive disruption in the health sector or to our response. For that reason, and that reason alone, Dr Clark will maintain his role.”

[Waltzing]

Forced sale of private assets, sure to lose them the next election.

Bring back the Reds Cossacks adverts from national...

https://nzhistory.govt.nz/media/video/dancing-cossacks

God bless Rob... dont you just miss him..

[Old mate]

Thanks stoploss didn't know he was still in cabinet, on a salary of $296,007:scared:

[Waltzing]

what happened to the barking chair leader of this stock?

[SCOTTY]

Thanks stoploss didn't know he was still in cabinet, on a salary of $296,007:scared:

As a Presbyterian Minister with degrees in Theology and philosophy it is hard to believe that he is qualified to be in charge of restructuring any sort of business especially the huge and complex NZ retail grocery. Time to be off on his bike I think :(

[Waltzing]

"As a Presbyterian Minister with degrees in Theology and philosophy "

from an Atlee point of view hes perfect!!!

Think Salvation Army and soup kitchens and you can see where the policy is heading...

With global stagflation on the way and a deep recession coming is a perfect storm to nationalise the food chain.

[stoploss]

As a Presbyterian Minister with degrees in Theology and philosophy it is hard to believe that he is qualified to be in charge of restructuring any sort of business especially the huge and complex NZ retail grocery. Time to be off on his bike I think :(
Think he has too much on his plate ,….. a lot of decisions to be made around the CCCFA …..

[winner69]

what happened to the barking chair leader of this stock?

Waltz, I think he’s gone on holiday ….though weather pretty ****ty eh

[winner69]

A few reports out on how retail sales went in May. Except for fuel and travel a lot of negative numbers v May last year

WHS had a shocking half year with sales down $78m on pcp and Q3 (Feb/April) they were down another $20m v pcp

Not a good start to Q4 by looks of retail numbers. Retailwatch has Department Stores down 7%

So hard to see WHS growing sales in Q4 v pcp which means full years sales could be down well over $100m on last.

Full year profit - suppose it all depends on what happens to margins and expenses

My guess full year profit $80m /$85m

Whatever market seems pretty relaxed .... share price holding up

[LaserEyeKiwi]

A few reports out on how retail sales went in May. Except for fuel and travel a lot of negative numbers v May last year

WHS had a shocking half year with sales down $78m on pcp and Q3 (Feb/April) they were down another $20m v pcp

Not a good start to Q4 by looks of retail numbers. Retailwatch has Department Stores down 7%

So hard to see WHS growing sales in Q4 v pcp which means full years sales could be down well over $100m on last.

Full year profit - suppose it all depends on what happens to margins and expenses

My guess full year profit $80m /$85m

Whatever market seems pretty relaxed .... share price holding up

Are Warehouse red sheds & Kmart stores included in the “Department Stores” category? (Makes sense if so)

[Habits]

Waltz, I think he’s gone on holiday ….though weather pretty ****ty eh

I thought he might have his tail up and flat out on annual accounts. An accountant's busy period

Also i cannot say I have heard of Q3 Feb/Apr... is that unique for some of our listed retailers

[Beagle]

I thought he might have his tail up and flat out on annual accounts. An accountant's busy period

Also i cannot say I have heard of Q3 Feb/Apr... is that unique for some of our listed retailers

Holiday from social media and forum's can be a very good thing and you're right, I thought I might do some real work for a change before my old abacus locks up with rust LOL. Not worried about WHS and noted that Walmart (PE 26) was one of the only stocks on the Dow to go up on Friday. Consumer staples coming back into vogue ?

[percy]

[QUOTE=Beagle;961633]Holiday from social media and forum's can be a very good thing .



I enjoyed your break..............lol.

[Beagle]

Best song I watched on holiday...haters gunna hate, shake it off... https://www.youtube.com/watch?v=nfWlot6h_JM

[Habits]

Not worried about WHS and noted that Walmart (PE 26) was one of the only stocks on the Dow to go up on Friday. Consumer staples coming back into vogue ?

Noted with (hi) interest

[Waltzing]

".though weather pretty ****ty eh"

gosh Winner your not wrong about the weather, gum boots will be flying off the shelves.

Who does the best GB's and is SKL the best stock in a storm?

[winner69]

Take your LPG heater into a Warehouse and swap it for a healthy electric heater .... free

Well done Warehouse

[bull....]

looks like whs is getting ready to break down soon from that bearish flag pattern

[Beagle]

Take your LPG heater into a Warehouse and swap it for a healthy electric heater .... free

Well done Warehouse

Got a link ?

[Baa_Baa]

Got a link ? It's on the front page of WHS website

[Beagle]

https://www.thewarehousegroup.co.nz/news-updates/warehouse-introduces-free-heater-swap-supporting-kiwis-live-warmer-and-healthier-homes-winter

Thanks, good on them.

[Joshuatree]

https://www.thewarehousegroup.co.nz/news-updates/warehouse-introduces-free-heater-swap-supporting-kiwis-live-warmer-and-healthier-homes-winter

Thanks, good on them.

Very cool. I take alot of stuff to St Vincent d paul. They welcomed some oil column heaters.They extract the oil and recycle the oil, and the empty heaters for scrap steel and raise funds for great community outreach causes.

[winner69]

JB HiFi NZ sales in March quarter up 4.8% on last year

Means Noel Leeming sales were up more than 5% in same period ....maybe even 8%/10%

That bodes well for WHS ---- jewel in the crown performing well

JB HiFi sales up 4.8% v pcp in March quarter boded well for Noel Leeming Sales for Q3 (Feb/Apr)

But Noel Leeming sales were DOWN 2.5% v pcp in that quarter (Jeez I was excited when I said maybe +8%/10% eh)

Did a bit of digging and if the Electrical and Electronic Goods Retail Sales ex Stats NZ is a proxy for the market Noel Leeming are participating in then it's not looking that good for Noel Leeming - by my reckoning they have steadily lost market share over the last 4 quarters (from April 2021) - market share fallen from being consistently about 25% over the last few years to currently being just over 21%. That's a big drop in share over a short time.


More of a concern is that a few retail commentators are saying that demand for electronics / appliances over the next year will soften and could be down as much as 5% to 10%

Soft market and declining share not a good place to be in for Noel Leeming, especially when they have basically been the key groth engine for the group

Wonder if Nick monitors such trends ..... possibly not as he has got lost in the metaverse looking for $4 butter

[Rawz]

But isnt it a case of making more by selling less for NL?

Similar to MHJ. Profits all that matter

[winner69]

But isnt it a case of making more by selling less for NL?

Similar to MHJ. Profits all that matter


in H1 NL sold less and made less money than pcp

Margins down and CODB up = profits

Margins going to decline further i reckon - watch this space

[Beagle]

JB HiFi sales up 4.8% v pcp in March quarter boded well for Noel Leeming Sales for Q3 (Feb/Apr)

But Noel Leeming sales were DOWN 2.5% v pcp in that quarter (Jeez I was excited when I said maybe +8%/10% eh)

Did a bit of digging and if the Electrical and Electronic Goods Retail Sales ex Stats NZ is a proxy for the market Noel Leeming are participating in then it's not looking that good for Noel Leeming - by my reckoning they have steadily lost market share over the last 4 quarters (from April 2021) - market share fallen from being consistently about 25% over the last few years to currently being just over 21%. That's a big drop in share over a short time.


More of a concern is that a few retail commentators are saying that demand for electronics / appliances over the next year will soften and could be down as much as 5% to 10%

Soft market and declining share not a good place to be in for Noel Leeming, especially when they have basically been the key groth engine for the group

Wonder if Nick monitors such trends ..... possibly not as he has got lost in the metaverse looking for $4 butter

Gosh, I haven't checked your figures but that does sound quite concerning. As you say, Noel Leeming has been the jewel in the crown for this group for many years now. In addition, I guess the much lower $Kiwi is also a factor here that could hurt margins going forward.
Almost every other weekend I see front cover page advertisements in the Herald by Harvey Norman offering several years (sometimes five years) storewide, interest free. Maybe that's how the Aussies are stealing market share ?

[BlackPeter]

...

Almost every other weekend I see front cover page advertisements in the Herald by Harvey Norman offering several years (sometimes five years) storewide, interest free. Maybe that's how the Aussies are stealing market share ?

I don't read the printed version of the Herald - saves me paying for all these adds. However - 5 years interest free, this is in a high inflation environment a lot of money they have to add to their prices.

Maybe customers are better off to pay $1000 now to the Warehouse instead of $2000 over 5 years to the rabbit?

Surely - they must charge really healthy margins to survive this interest free offer ... or otherwise the Warehouse just needs to wait for them to return their market share back to them on a silver plate :) ;

Seriously - who would buy at Harvey Norman anyway? Never found there anything of interest ...

[percy]

I don't read the printed version of the Herald - saves me paying for all these adds. However - 5 years interest free, this is in a high inflation environment a lot of money they have to add to their prices.

Maybe customers are better off to pay $1000 now to the Warehouse instead of $2000 over 5 years to the rabbit?

Surely - they must charge really healthy margins to survive this interest free offer ... or otherwise the Warehouse just needs to wait for them to return their market share back to them on a silver plate :) ;

Seriously - who would buy at Harvey Norman anyway? Never found there anything of interest ...

Well with au $4,296 mil of sales a lot of people have.
They have been doing up to 5 years interest free for 20 years or more.
With their stores being franchised,there are a large number of owner operators, who have "the owner's eye".

[Beagle]

A quick check of their websites this evening, didn't bother with price comparisons, leave that to others, shows Noel Leeming doing 30 months interest free and Harvey Norman celebrating 25 years in New Zealand doing 60 months interest free plus the instant gratification of a gift card to the value of 10% of your purchase. https://www.harveynorman.co.nz/
I think in tougher times like we're in now that sort of promotion they're running is probably very appealing to consumers in terms of "instant gratification" so its probably no surprise that they are taking / "buying" market share. Probably just as well its only Noel Leeming affected a little bit by this as Warehouse stuff is so cheap its ridiculous !

[DarkHorse]

I imagine both are gaining share from PB Tech - which used to offer great prices with decent service, but nowadays the service is appalling.

[percy]

I imagine both are gaining share from PB Tech - which used to offer great prices with decent service, but nowadays the service is appalling.

Tough sector:
PB Tech,
Harvey Norman
JB Hi Fi.
Noel Leeming.
The Warehouse.
Interesting enough No2 daughter found Smiths City's deal on an Acer computer was the best,

[Muse]

Tough sector:
PB Tech,
Harvey Norman
JB Hi Fi.
Noel Leeming.
The Warehouse.
Interesting enough No2 daughter found Smiths City's deal on an Acer computer was the best,

aye, but interesting enough, PB Tech is (or at least was) phenomenally profitable. something about how they imported their stock and the C grade el cheapo retail outlets they had, together with an early and strong ecommerce offering. understand it has been shopped around several times over many years but no one ever bought it, guess no one could get their head around it.

electrical goods and electronic sales a funny business - on average has relentless deflation (PCs, laptops, gadgets, TVs, all tend to get cheaper over time. exception is iphones which get more pricey) but works on increasing volumes year on year on the back of cheaper products (you can check out volumes, delfators and prices for this category on stats nz if you dont believe me, seems hard to fathom). rebates are key.

redsheds not just cheap clothing and dry good foods, but it hosts a reasonable sized electronics and appliance category of its own, plus sporting, homewares & furniture, etc. as far as I'm aware warehouse group has never in recent times provided any granularity into the category makeup of redshed sales. largest category by floorspace clothes, but hard to know at the $ or contribution level.

Q3 sales per average store for noel leeming were the most elevated relative to pre covid Q3 of all the brands.
* RED: $4.49m per average quarterly store vs Q3 FY19 of 4.15m. 2.6% CAGR
* Blue: 0.96m per ave store vs Q3 FY19 of $1.02m (-2% CAGR(
* NL: $3.66m per store vs Q3 FY19 of 2.82m, 9% CAGR. Starting to slow, it fell to 1% sales per ave store from Q3 FY21 (although total sales fell 2.5% on the pcp with a few store closures)
* T7: $1.62m vs $1.51m. 2.4% CAGR. Sales per average fell 6.1% from Q3 last year. So total sales for this division increased during the quarter as there are new stores, but average store revenue is falling sharply. A bit of a worry as these are new stores with long fixed tenures, and quite expensive (second most expensive store to operate of the 4 brands on a CODB per average store basis). A good winter snow could help with ski sales, but this business unit lost quite a bit of money for a long time and wasn't particularly profitable even when home fitness was going through the roof, so plausible could sink back into a loss making position with all these new expensive stores.


winner69, Q3 noel leeming sales fell yes, but they also shut a few stores over the period. Q3 FY21 they had average quarterly stores of 72.5, this year 70. I dunno the JBHIFI store numbers. I guess NL dont think the covid stay at home electronics sales boom is going to last forever.

[CD_CHCH]

Recent shopping experience earlier this month - we were looking for a coffee machine. Went to multiple stores to look at various options, brands, best price, etc but most of all to get advice. Visited 4 Noel Leeming stores in Christchurch including their flagship store in Moorhouse Ave where the salesperson just ignored us as we spent 10 -15 minutes looking at the coffee machines. The salesperson was pretty much standing within 2 metres of us but never even acknowledged we were there. Same experience in the Riccarton and Hornby stores, we did managed to get served in the Northwood store but the 2 salespeople who approached us both admitted they knew nothing at all about the product.

JB Hi-Fi Riccarton and Smiths City Colombo St - again no service. Salesperson at Northwood Harvey Norman was friendly and served us but was making it up as he went along, including telling us facts we knew were incorrect.

Best service in town when looking at coffee machines was Harvey Norman in Hornby and Moorhouse Ave - great service at both places and the staff knew their product and took their time to explain things in detail. End result we purchased a coffee machine from Harvey Norman Moorhouse. Harveys also had the best price in town by $50.

As WHS shareholders would have preferred to support our NZ business but it's a 2 way street - if you aren't going to provide great customer service we're simply not going to shop with you. Have brought the lack of service to Noel Leeming attention before but their reply was a standard copy and paste "we will talk to the store so that doesn't happen again"....based on our experience it's an ongoing issue.

[BlackPeter]

Well with au $4,296 mil of sales a lot of people have.
They have been doing up to 5 years interest free for 20 years or more.
With their stores being franchised,there are a large number of owner operators, who have "the owner's eye".

I guess 5 years interest free with an average of 2% inflation is one thing, but 5 years interest free with 8% inflation is a different game.

Times change ...

[percy]

I guess 5 years interest free with an average of 2% inflation is one thing, but 5 years interest free with 8% inflation is a different game.

Times change ...

As per all HVN promotions it will be well thought out,and as per usual should achieve their objectives ,what ever they are.
Keep in mind HVN's market cap is 4.5 times WHS's.
Gerry Harvey retains "the owner's eye".

[ratkin]

Recent shopping experience earlier this month - we were looking for a coffee machine. Went to multiple stores to look at various options, brands, best price, etc but most of all to get advice. Visited 4 Noel Leeming stores in Christchurch including their flagship store in Moorhouse Ave where the salesperson just ignored us as we spent 10 -15 minutes looking at the coffee machines. The salesperson was pretty much standing within 2 metres of us but never even acknowledged we were there. Same experience in the Riccarton and Hornby stores, we did managed to get served in the Northwood store but the 2 salespeople who approached us both admitted they knew nothing at all about the product.

JB Hi-Fi Riccarton and Smiths City Colombo St - again no service. Salesperson at Northwood Harvey Norman was friendly and served us but was making it up as he went along, including telling us facts we knew were incorrect.

Best service in town when looking at coffee machines was Harvey Norman in Hornby and Moorhouse Ave - great service at both places and the staff knew their product and took their time to explain things in detail. End result we purchased a coffee machine from Harvey Norman Moorhouse. Harveys also had the best price in town by $50.

As WHS shareholders would have preferred to support our NZ business but it's a 2 way street - if you aren't going to provide great customer service we're simply not going to shop with you. Have brought the lack of service to Noel Leeming attention before but their reply was a standard copy and paste "we will talk to the store so that doesn't happen again"....based on our experience it's an ongoing issue.

I am the opposite, hate being pestered instore by sales people, just like being left to browse. If I was thinking of buying a coffee machine, I would look online see who is selling what then look at reviews, narrow it down, then look at a you tube video on the product, by which stage I would know more than any of the sales assistants anyway. Then I would go and buy it at cheapest price I could find

[samjaynz]

I imagine both are gaining share from PB Tech - which used to offer great prices with decent service, but nowadays the service is appalling.

I hate shopping at PB Tech, but grit my teeth and bear it as they do have a better range of specialist equipment and computer gear than Noel Leeming, Harvey Norman etc. Service there is so bad and rude, and they are terrible to deal with for warranty claims of any description. They also seem to sail very close to the wind in terms of fair trading policies re: pricing (e.g. goods go up in price before a sale to be discounted back down). I also don't like that they charge a credit card surcharge.

Got excellent service in Noel Leeming not too long ago when buying a washing machine - the salesman couldn't have been more helpful or knowledgeable and also gave us a discount on top of the clearance price, and wasn't at all pushy when we asked him for a bit of time to look at it ourselves. However, the after sales delivery/install service was poor (cancelled on us twice, and then showed up hours late on the third try)

That being said, service in Noel Leeming seems to depend massively on what you look at, and can sometimes be overly pushy. I looked at a new Mac laptop recently (not much point TBH as there is no stock for ages) and the salesman was in my face within 10 seconds of me opening the laptop lid, basically screeching at me to buy now and what could he do to get me to buy today - which seemed odd as there was a) no stock and b) no way he could actually discount. Was unpleasant and considering that Apple products are the same price everywhere, I'd rather just buy from the Apple online store.

Other times, I've not been able to get any service whatsoever - although service standards in general seem to be declining.

[Snow Leopard]

I am the opposite, hate being pestered instore by sales people, just like being left to browse. If I was thinking of buying a coffee machine, I would look online see who is selling what then look at reviews, narrow it down, then look at a you tube video on the product, by which stage I would know more than any of the sales assistants anyway. Then I would go and buy it at cheapest price I could find

As I sit outside at one of the many local cafes, sipping my Latte, I wonder why anybody would buy a coffee machine for home.

But if you must, buy a good one from the Warehouse empire please.

13914

[samjaynz]

As I sit outside at one of the many local cafes, sipping my Latte, I wonder why anybody would buy a coffee machine for home.

But if you must, buy a good one from the Warehouse empire please.

13914

I've got a coffee machine at home (an emergency Airpoints Store spendup prior to the first lockdown, in fear of them deciding to wipe my balance and then inevitably declare doing so a triumph of customer service)

Now I've learned how to use it properly, I can honestly say the coffee I make is at least as good - if not better - than many cafes I would frequent; and that is before factoring in the price difference. There are some cafes I go to where I don't think all the time and equipment in the world would allow me to surpass ... but there are lots of "average" coffees being served, and more and more I find myself just making something at home and putting in a keep cup.

I'd average 2-3 coffees per day, and have been doing so since March 2020 and the machine hasn't skipped a beat yet.

Picking good beans and grinding them fresh makes all the difference.

[winner69]

All this chatter about service in Noel Leemings suggests it is not that good

Suppose whenever Nick says things like Our People - Across our stores, distribution centres and support centres, our team members have gone above and beyond to ensure we meet our customers’ needs and wants. we have to take it with a grain of salt - ie not really true (in H1 presentation)

[LaserEyeKiwi]

Here’s a so good its bad service story about Noel leeming.

I have a pair of wireless headphones that have detachable tips (so you can fit a size of your choosing). I didn’t buy these headphones from Noel leeming, but thought i would head in to see if they sold replacement tips as I had lost one. Noel Leeming don’t sell replacement tips, but one of the staff went into the back room and got me a set and insisted there was no charge for them. I was bit dumbfounded at this level of generosity and left the store happy despite not spending a penny.

Now this experience leaves me with a very positive attitude about Noel Leeming and makes me more likely to shop there in future, but I’m guessing giving away inventory for free isn’t great for margins in the short term.

[winner69]

Here’s a so good its bad service story about Noel leeming.

I have a pair of wireless headphones that have detachable tips (so you can fit a size of your choosing). I didn’t buy these headphones from Noel leeming, but thought i would head in to see if they sold replacement tips as I had lost one. Noel Leeming don’t sell replacement tips, but one of the staff went into the back room and got me a set and insisted there was no charge for them. I was bit dumbfounded at this level of generosity and left the store happy despite not spending a penny.

Now this experience leaves me with a very positive attitude about Noel Leeming and makes me more likely to shop there in future, but I’m guessing giving away inventory for free isn’t great for margins in the short term.

Good one LEK

I still wonder whether they ever found the TV the system they had in stock but couldn't be found when I was willing to buy it .....missing inventory isn't great for margins.

[winner69]

All sorts of stuff on the web if you look

SHAREHOLDERS SHOULD BE SHOCKED

https://nz.trustpilot.com/review/www.noelleeming.co.nz

[Beagle]

Ouch that is shocking. I must admit I have never seen reviews so consistently bad.

[Waltzing]

well should see a BIG loss for them in the departments profit and loss ... going back to when? 2019.....

who said to buy WHS? wait i see the NL has made profit in the Annual reports....its ok then... FAKE customers!!!

[BlackPeter]

Ouch that is shocking. I must admit I have never seen reviews so consistently bad.

To be honest - these reviews look so bad that they are not credible. It is not difficult to create fake reviews. Maybe one disgruntled customer or they didn't pay the Bitcoin ransom somebody asked them to pay ???

Not a big fan of Noel Leeming, but pages after pages of one star reviews are ridiculous and absolutely unbelievable. I had to deal in the past with really shocking companies (some borderline criminal), and their online reviews are typically patchy, but nothing like that.

[Goose]

Ouch that is shocking. I must admit I have never seen reviews so consistently bad.

On this same site the much loved Glassons gets a review score of 'Poor', 2.2 out of 5 - tells you all you need to know really.

[winner69]

To be honest - these reviews look so bad that they are not credible. It is not difficult to create fake reviews. Maybe one disgruntled customer or they didn't pay the Bitcoin ransom somebody asked them to pay ???

Not a big fan of Noel Leeming, but pages after pages of one star reviews are ridiculous and absolutely unbelievable. I had to deal in the past with really shocking companies (some borderline criminal), and their online reviews are typically patchy, but nothing like that.

Using OCA thread as a guide even the STer’s ‘reviews’ of OCA are more balanced …..like either 8 stars (out of 5) or O or maybe 1 star

Is that ‘credible’

[Muse]

Using OCA thread as a guide even the STer’s ‘reviews’ of OCA are more balanced …..like either 8 stars (out of 5) or O or maybe 1 star

Is that ‘credible’

No one bothers to do an online review saying “thanks, your service was satisfactory today”

Mainly just the bad stuff

[Jay]

That is True FM. most people only complain when something has gone bad. Not when they do what they are suppose to do
And in any event how may actual numbers of bad reviews to how many customers in a week??

[percy]

I often wonder how many positive reviews are written by staff members.?

[Dumbarton]

To be honest - these reviews look so bad that they are not credible. It is not difficult to create fake reviews. Maybe one disgruntled customer or they didn't pay the Bitcoin ransom somebody asked them to pay ???

Not a big fan of Noel Leeming, but pages after pages of one star reviews are ridiculous and absolutely unbelievable. I had to deal in the past with really shocking companies (some borderline criminal), and their online reviews are typically patchy, but nothing like that.

Sorry but i do not agree that these stories are not credible. I can relate to almost all of them.
I am a retired senior and a shareholder in WHS. It is not in my interests to contradict you but i have had similar multiple experiences over recent years and i do not deal with Noel Leeming if i can help it.
It is one of the remaining blots on WHS that this EXTREME poor customer service and attitude still persists in an otherwise seemingly revitalised WHS group

[airedale]

I bought a few things from Noel Leeming over the years,mostly in Christchurch and the service was fine, well informed staff and a competitive price.That is all I have to say.

[Jay]

Same here airedale.

Had to return an item due to it breaking down, replaced with no issues.
The majority of times I've been in, I know what I want so just go and get it and pay for it- no dramas etc, but at the same time don't write a review saying all good

[winner69]

Our Nick and Don Braid (Mainfreight fame) were the special people at an INFINZ do the other night about Building Resilience in Supply Chains and in Markets.

They at one time were discussing what the future of low-emitting freight transport would look like. Nick, always the dreamer, brought up the idea of drones and robotic delivery and mentioned that Walmart are looking at it and it's already at scale in China with deliveries up to 320 kilometres – they could replace diesel trucks and the audience laughed

With Nick you never know what direction he might take WHS

[Snow Leopard]

Important question: Did the Don laugh?

[winner69]

Important question: Did the Don laugh?


Of course ...... adding such things likely to be a longer-term option which, like hydrogen use, was maybe 2040

[LaserEyeKiwi]

Investor presentation from today.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/394892/374150.pdf

I didn’t watch it, but nothing new in the slides - using data ending Jan 31st, so a bit stale.

[winner69]

Interesting from BusinessDesk

If you want to know how seriously the government takes the desire for a more competitive supermarket sector, look no further than this photo of Ardern at a high-powered investors’ lunch in Sydney. To her right in the picture (centre) is none other than Patrick Noone, the Australian managing director for multi-national big-box shopping giant Costco. There would have been about 40 around the table, although a few of those were New Zealanders, but the most prized spot is inevitably beside the prime minister.


Hope Nick is on good terms with Jacinda ….some corporate welfare of sorts might be coming their way

[Habits]

As we know, the PM is out to lunch. I dont see anything major coming of it. Think how the star power she holds produced nothing tangible in the EU trade deal

BTW I wonder if the Beagle will come back sometime. Couta has been permanently banned and griping about it.

[Waltzing]

Not sure how a professional accountant found time to participate as it was.

Most are snowed under as round after round of compliance just keeps piling up from the IRD.

Asking a lot.

[Jay]

The beagle I thought was semi-retired, so must had some free time Waltzing.

Anyway, still can't see how WHS can/will compete as a "supermarket"
Not the first place I'd think of to go to, however if I was in there anyway, I might pick up the odd thing that i may have forgotten - but that is rare.
I'm also not rushing over the nearest WHS just to buy cheap butter or whatever might be on special this week, passing about 3 supermarkets on the way.

Costco, to me on the face of it, will be a bit like someone I know who has 2 or 3 fuel cards to save 10 cents max but pays a fee on all cards - but doesn't use enough petrol to justify - 1 card maybe, bit not more.

DISC: previous holder sold soon after last dividend

[Waltzing]

well with this sell off in the market and his holding a load of cash rather than shares he might still be planning on working...:scared:

[Muse]

The beagle I thought was semi-retired, so must had some free time Waltzing.

Anyway, still can't see how WHS can/will compete as a "supermarket"
Not the first place I'd think of to go to, however if I was in there anyway, I might pick up the odd thing that i may have forgotten - but that is rare.
I'm also not rushing over the nearest WHS just to buy cheap butter or whatever might be on special this week, passing about 3 supermarkets on the way.

Costco, to me on the face of it, will be a bit like someone I know who has 2 or 3 fuel cards to save 10 cents max but pays a fee on all cards - but doesn't use enough petrol to justify - 1 card maybe, bit not more.

DISC: previous holder sold soon after last dividend

..............

[ithaka]

Bad press for Noel Leeming
https://www.stuff.co.nz/business/129230843/shekou-and-noel-leeming-worst-for-delivery-delays-and-failure-to-deliver

[Waltzing]

"Sort of like HLG when he was barking them up and selling them down"

NZX being a very small markets it probably best to sell and only comment after the event.

Wise move when the volumes are tiny.

[winner69]

Exciting times at Torpedo 7

[Waltzing]

wonder where they are making it with the supply chains all stuffed up.

last parts for a Trek needing a rear derailleur took 4 weeks from AUS..

that was in nov last year.

[winner69]

Ft.com interesting article on quantum computing




Two myths need to be laid to rest. First, it is true that quantum computers are in the early stages of development, but they are already creating value today. Already, quantum-inspired algorithms can be run on today’s classical computers to deliver significant improvements in business and financial processes. But those algorithms will be even more effective when run in combination with the quantum computers of the future.


Nick will be on the case …..and maybe he’ll have to hire waltz to guide him

[Waltzing]

QC right up there with time travel, well almost.

The big question is has WHS got there IT sorted in time for this massive world wide inflation wave that will surely devastate P&L results.

you wont be able to go and buy a QC chip set at NLeeming next year embedded in your Apple or Windows laptops or Phone.

Europe is where its at ...

https://blogs.nvidia.com/blog/2022/07/12/quantum-qoda-julich/

[CD_CHCH]

Early "quantum" computer wasn't quite a success Sinclair QL - Wikipedia (https://en.wikipedia.org/wiki/Sinclair_QL)

[Habits]

"But those algorithms will be even more effective when run in combination with the quantum computers of the future."

All this computing power and lots of data storage. The computers will know what we are about to do even before us

[Joshuatree]

"But those algorithms will be even more effective when run in combination with the quantum computers of the future."

All this computing power and lots of data storage. The computers will know what we are about to do even before us

Speaking of data I read somewhere that "90 % of the data that's ever existed has been created in the last two years"

[Hoop]

Speaking of data I read somewhere that "90 % of the data that's ever existed has been created in the last two years"
Yep.
and expect that to rise exponentially ..as computer power and data storage capacity rises (exponentially as well)..Soon they will have mass of data to set up a customer profile and email personalised flyers about products you are "interested" in. I've noticing that with Aliexpress.

Word of caution with this emerging "brave new world"... if curious think before you click..also I won't let Mrs Hoop buy women's personal things on my computer..:t_down:

[Waltzing]

you'll walk past a women clothing shop in centre place and it will flash an advert at you for the latest fashion with your dress size....:eek2:

[Wright]

you'll walk past a women clothing shop in centre place and it will flash an advert at you for the latest fashion with your dress size....:eek2:


Sounds like Minority Report.

[Waltzing]

Hoop is getting ready in advance with face recognition on his devices to bar all comers...:eek2:

[winner69]

JB Hi-Fi reported June quarter sales up 7.7% on same quarter last year. Full year sales up 0.3% on pcp

Should see Noel Leeming follow suit - if so Q4 sales might be $280m and make Full Year sales fractionally less than last year.

[bull....]

looks like whs is getting ready to break down soon from that bearish flag pattern

this might help the pattern

Walmart cuts profit guidance as inflation forces shoppers to spend more on necessities

https://www.cnbc.com/2022/07/25/walm...inflation.html (https://www.cnbc.com/2022/07/25/walmart-cuts-second-quarter-guidance-as-it-sees-slower-growth-due-to-inflation.html)

when one of the biggest retailers cuts guidance due to inflation you know its only a matter of time before every company does

[winner69]

WHS haven’t given any guidance só nothing to cut.

Unless things are a total disaster we won’t hear anything until late September

[Joshuatree]

this might help the pattern

Walmart cuts profit guidance as inflation forces shoppers to spend more on necessities

https://www.cnbc.com/2022/07/25/walm...inflation.html (https://www.cnbc.com/2022/07/25/walmart-cuts-second-quarter-guidance-as-it-sees-slower-growth-due-to-inflation.html)

when one of the biggest retailers cuts guidance due to inflation you know its only a matter of time before every company does

Good to have a contrarian view from you Bull ,as always. For my situ Im longer term investing in this sector,The Warehouse,so that's just noise to me.Im happy to ride this out and collect income on the way.But I have no or almost no other exposure in the retail side of things atpit.

[Waltzing]

late september?

winner(), will there be any inflation left?

oh only a few weeks away and europe economies will face a stark energy winter and china with no policy to speak of; could be next september before you see this cycle change mod.

[peat]

good support now at the $3.30's
ascending triangle breaking on the upside
I'm guessing 3.80 in no time.to fill the gap between 3.70 and 4

[winner69]

TWG sales should be going well. We’ll know next month how profit went.

But I hope next month Nick gives us an update on his ecosystems and how the metaverse is coming along.

Can’t afford to be a laggard on the metaverse if you still want to be in the game in 2030

https://www.bcg.com/publications/2022/impact-of-metaverse-on-business

[winner69]

Also hoping that Nick is getting his team involved in marketing to Generation Alpha

Lose them now and when the oldies start dying off he won’t have any customers

[BlackPeter]

Also hoping that Nick is getting his team involved in marketing to Generation Alpha

Lose them now and when the oldies start dying off he won’t have any customers

As a start he could charge an annual fee to customers for the privilege to shop at the Warehouse (like CostCo does). This will increase customer retention ...

Get a liquor licence, pump some cheap petrol at Warehouse parking lots and (obviously) keep (or even lower) the current pricing level for goods and everything will be honky-dory.

[Robomo]

Yeah, and fill up the stores with even more cheap American and Chinese sugary snacks in huge boxes.

[Perky]

Be interested to see how their foray into cheap groceries is working. I notice the loss leaders got dialled back pretty quickly.
No more $5 weetbix, the $1 coffee is now $1.90. You can still get cheap milk and butter and flour is cheap …A bakers delight …but hope they are making some dough for the shareholders. I’m not sure the supermarkets will be loosing too much sleep about warehouse trying to compete

[pierre]

Be interested to see how their foray into cheap groceries is working. I notice the loss leaders got dialled back pretty quickly.
No more $5 weetbix, the $1 coffee is now $1.90. You can still get cheap milk and butter and flour is cheap …A bakers delight …but hope they are making some dough for the shareholders. I’m not sure the supermarkets will be loosing too much sleep about warehouse trying to compete

Weetbix at the Warehouse:

1.2kg pack $6.00

Weetbix at New World:

1.2kg pack $7.89

750g pack $4.89 (big drop from the ~$7.00 price it used to be!)

[Perky]

Wasting your hard earned dollars Pierre.

Pak n save weetbix $5.99 1.2kg or $4.29 750gm
Pak n save special blend coffee $1.75

prices sourced grocer.co.nz today

While you there you can buy all the other things you need to run a house like booze, meat and cheese that the warehouse doesn’t offer. So if you only want milk, butter or flour …the warehouse has you covered but everything else pretty much cheaper elsewhere

I predict the warehouse cheap butter price will end within next couple of months.

[BlackPeter]

Wasting your hard earned dollars Pierre.

Pak n save weetbix $5.99 1.2kg or $4.29 750gm
Pak n save special blend coffee $1.75

prices sourced grocer.co.nz today

While you there you can buy all the other things you need to run a house like booze, meat and cheese that the warehouse doesn’t offer. So if you only want milk, butter or flour …the warehouse has you covered but everything else pretty much cheaper elsewhere

I predict the warehouse cheap butter price will end within next couple of months.

hmm .... you sound like a man with an agenda ...

[Perky]

No agenda BP. Just questioning what the Whs grocery strategy might be and where it’s going. Where I do my weekly supermarket shop is also a warehouse so I’ve been diverting a few of my hard earned dollars into their tills but I’ve noticed that outside their loss leader offers there really no competitive advantage I can see on most products. I’m probably their worst type of customer…I only buy their loss leaders and still get everything else from the supermarket.
the warehouse app says the butter offer ends 4 October…hence my prediction it will be ending…but I could be wrong.
Disc. been a shareholder a long time ago but not a believer anymore

[dreamcatcher]

Currently 1.2kg Weet-bix $4.49 at Pak'nSave and imo grocery offerings similar prices to Pak'nSave with limited stock items.
New World - Countdown perhaps nicer shelving but far more expensive so personally don't shop there.

[Perky]

Thats right. Stickman is on tv every week giving me reasons to visit. Been radio silence from Big Nick since he was in the media telling us all how he was committed to saving nz breakfast. So far he’s put the weetbix up 20% and the coffee 80%.
If I was a shareholder I’d want to know what we’re doing.

[Muse]

Thats right. Stickman is on tv every week giving me reasons to visit. Been radio silence from Big Nick since he was in the media telling us all how he was committed to saving nz breakfast. So far he’s put the weetbix up 20% and the coffee 80%.
If I was a shareholder I’d want to know what we’re doing.

Might have been a bit of an experiment to see how many incremental customers they could bring in to buy loss leading drygoods/butter/milk that would also buy a higher margin normal WHS product. IE, mgmt might guesstimate in their business case that the grocery initiatives might bring in an extra (say) 100 customers per store per day who spend (say) $20 on groceries at (nil/X% margin), but then (say) 10% of them go on to buy a normal WHS product for $x at x% margin, delivering the overall initiative greater GM dollars than without. All sounds good but you gotta test it, then play with the variables like pricing on groceries, to test the elasticities or bump them to earn the desired gross profit dollars. Food prices have risen anyway since they started the project (but not by the quantums you all are observing) so it could signal that the initiative wasn't delivering the expected incremental gross profit dollars. With hyper skinny EBIT margins and high overheads growing with inflation the WHS has bugger all room to accept margin erosion - operational leverage is great on the way up but is terrible on the way back down. If the project wasn't working, or was just increasing working capital and delivering de minimus increases in incremental gross profit, it would be a good thing for mgmt to increase margins on those grocery products even if it slows low/nil margin grocery sales.

Oddly enough, pairing back investment in "the market" likely to have a far greater impact on NBPT and ultimately dividends for FY22 and FY23, then tinkering with loss leading groceries in the hopes of driving incremental WHS sales. I reckon that could be done easily enough - a great but unknown portion of those massive markets losses are customer acquisition costs (ie google ads), which they could pull back on quickly, even if that means lower sales (but would translate into higher group profits). Depends on how gung ho the mgmt team is, how much they want to trumpet growing market sales, and how much slack they think they have with shareholders on losses. No spreadsheet or broker report is going to tell us the answer to that.

[Perky]

Good thoughts FM. The thing is everyone needs to eat something but not everyone needs to buy other widgets from Whs.
id happily spend some of my grocery dollars with Whs if they were something meaningful ie cheapest, multi buy discount but I’d struggle to find anything else in their stores that appealing.
Be interesting to see where it goes. We surely need more competition in groceries to keep everyone’s pricing sharp.
My observation of visiting stores since they starting selling groceries…is their loss leaders prices are too sharp and everything else is not

[Relaxed]

Good thoughts FM. The thing is everyone needs to eat something but not everyone needs to buy other widgets from Whs.
id happily spend some of my grocery dollars with Whs if they were something meaningful ie cheapest, multi buy discount but I’d struggle to find anything else in their stores that appealing.
Be interesting to see where it goes. We surely need more competition in groceries to keep everyone’s pricing sharp.
My observation of visiting stores since they starting selling groceries…is their loss leaders prices are too sharp and everything else is not

I was hoping that they could sell a lot of goods that don't need special storage for cheaper, and still make a reasonable GP%.
Then I suggested to them that they make shipping free if you bought over $30 of grocery items.
The marketing would be "buy your dry goods from us and we'll ship to your door, then buy your regular items at your supermarket. you make no more trips and still save money...."

However, I suspect you are correct FM that they are actually hoping for extra spending once people get into the store.

[bull....]

obviously not many people here follow AUS company reporting but i see the past ceo of noel leeming ( they report he is credited for the surge in sales at noel leeming ) has joined jbhi fi as nz ceo. loss for warehouse ?

[winner69]

Warehouse guy who left last year now CEO JB HiFi NZ

Noel Leeming have lost market share since he left (using that sector of Stats NZ Retail sales as a market proxy) .... and JB last few quarters sales growth has been better than NL..... and new guy jsut started

Hmmmm

[BlackPeter]

Warehouse guy who left last year now CEO JB HiFi NZ

Noel Leeming have lost market share since he left (using that sector of Stats NZ Retail sales as a market proxy) .... and JB last few quarters sales growth has been better than NL..... and new guy jsut started

Hmmmm

Considering it takes normally around five years before the impact (good or bad) of a new CEO funnels through the organistation down to the bottom line ... I'd say that's just coincidental ...

Noel / Leeming / WHS probably gave him a top reference as well so that JB HiFi couldn't resist ...

[peat]

14078

I see these patterns as bullish. impulsive move, followed by retracement. It looks like it might be trying to break out of the retracement now.


discl. holding.

[percy]

I thought WHS were wasting their time with groceries.
This morning I went to WHS Barrington to buy two jars of coffee.
Three people in front of me at the check out only had groceries..?

[waikare]

I thought WHS were wasting their time with groceries.
This morning I went to WHS Barrington to buy two jars of coffee.
Three people in front of me at the check out only had groceries..?

I am trending to buy more groceries from the WHS now, before doing my main 2 weekly grocery shop, I get what I can from the WHS first.
They don't have a big range to select from, but I guess in time this will grow.

[winner69]

I have a feeling WHS Will come out next week to give an idea how the year that ended July 31 went

And probably won’t be that good

[850man]

I am trending to buy more groceries from the WHS now, before doing my main 2 weekly grocery shop, I get what I can from the WHS first.
They don't have a big range to select from, but I guess in time this will grow.
we do the same - milk, butter and a bunch of other grocery staples are way better priced at the warehouse than the supermarkets. yes it does help that we have a warehouse close to home.

[BlackPeter]

I have a feeling WHS Will come out next week to give an idea how the year that ended July 31 went

And probably won’t be that good

Why would you think that?

People still need basics.

If I look at our expenses, our family is spending these days more money with the warehouse group (red sheds, Torpedo 7, the market) than we used to. Wife is even going there to buy butter, flour and some other food essentials ...

Do you think people don't eat anymore? I didn't notice everybody getting slimmer (which probably would be good :) )- and so far I didn't see either people running naked through the streets ...

[winner69]

Hope Nick has got his digital / marketing people sussing out how to make the most of BeReal to widen engagement with consumers?

Good to see they made Caroline Rainsford from Google a real Director (instead of a Future Director) ….as our Joan says “Caroline has a very special mix of skills and experience and as a Board, we’ve found her passion for technology as well as her strategic insights highly valuable as The Warehouse Group continues its digital transformation at pace.”

[Rawz]

I have a feeling WHS Will come out next week to give an idea how the year that ended July 31 went

And probably won’t be that good


Why would you think that?

People still need basics.

If I look at our expenses, our family is spending these days more money with the warehouse group (red sheds, Torpedo 7, the market) than we used to. Wife is even going there to buy butter, flour and some other food essentials ...

Do you think people don't eat anymore? I didn't notice everybody getting slimmer (which probably would be good :) )- and so far I didn't see either people running naked through the streets ...

I reckon you are both right.

WHS going to report poor numbers.

Basic's selling well. But everything else not so much.

[Habits]

Deal site 1-day fined $840,000 for lying to consumers about product scarcity
https://www.nzherald.co.nz/nz/deal-site-1-day-fined-840000-for-lying-to-consumers-about-product-scarcity/GANWN6UGAE3AQEX7YX4HNBAGRU/

Whs group fined

Ooops

[Waltzing]

HNR

heads need to roll and fast ...

[Habits]

1 day is now shifted to the market.com

The first offer was for 18 bags of pascall milk bottles "made with real milk" that was BB 25 June 2020

Not too yum

[winner69]

Deal site 1-day fined $840,000 for lying to consumers about product scarcity
https://www.nzherald.co.nz/nz/deal-site-1-day-fined-840000-for-lying-to-consumers-about-product-scarcity/GANWN6UGAE3AQEX7YX4HNBAGRU/



Whs group fined

Ooops

The judge gave them a discount lol …….. they got a bargain

[Waltzing]

""made with real milk""

get away .... dont say ... real milk...

well after the NZ film commission wanted to shut down dairy farming and then stated they have not views on the matter only to later state in private that "those farmers are a problem " or words to that sort... who know how long wellington will let you drink from the cows .....

[LaserEyeKiwi]

Why would you think that?

People still need basics.

If I look at our expenses, our family is spending these days more money with the warehouse group (red sheds, Torpedo 7, the market) than we used to. Wife is even going there to buy butter, flour and some other food essentials ...

Do you think people don't eat anymore? I didn't notice everybody getting slimmer (which probably would be good :) )- and so far I didn't see either people running naked through the streets ...

I would think Noel Leeming will be the major drag on results - it is the high end big ticket discretionary retail spending that is hurting the most at present.

[Habits]

"who know how long wellington will let you drink from the cows ....."

Don't do it waltzing... even though the GDT went up 5 percent and you want to kiss those cows

[ratkin]

Deal site 1-day fined $840,000 for lying to consumers about product scarcity
https://www.nzherald.co.nz/nz/deal-site-1-day-fined-840000-for-lying-to-consumers-about-product-scarcity/GANWN6UGAE3AQEX7YX4HNBAGRU/

Whs group fined

Ooops

Same trick Hotel and airline booking sites use to make you rush a decision

[Waltzing]

Cow Jiving ....

https://www.youtube.com/watch?v=bCrz03-OJtY

Dancing with the Cows ....

come on swing with those udders ....

"Classic from Habits...."

[BlackPeter]

Deal site 1-day fined $840,000 for lying to consumers about product scarcity
https://www.nzherald.co.nz/nz/deal-site-1-day-fined-840000-for-lying-to-consumers-about-product-scarcity/GANWN6UGAE3AQEX7YX4HNBAGRU/

Whs group fined

Ooops

Ooops?



A statement from the Warehouse Group following the sentencing said the offending graphics were implemented before it took over ownership of 1-day.

"We take our obligations under the Fair Trading Act seriously and accept the charges relating to legacy features of the 1-day website," a statement said.


1-day didn't belong to the Warehouse group at the time of the offending.

Are you a speeder if the previous owner of your car used to drive too fast and one of his speed tickets still in the mail?

[Muse]

Ooops?



1-day didn't belong to the Warehouse group at the time of the offending.

Are you a speeder if the previous owner of your car used to drive too fast and one of his speed tickets still in the mail?

When you buy shares (or buy a company via share sale), you inherit the liabilities, both on balance sheet or off (unless at the time of acquisition you get specific warranties & indemnities)

[winner69]

Ooops?



1-day didn't belong to the Warehouse group at the time of the offending.

Are you a speeder if the previous owner of your car used to drive too fast and one of his speed tickets still in the mail?

WHG did own 1-day at the time of offending (apparently 2016 to 2020)…..they were using old graphics etc from previous owners

We’re part of Torpedo7 before WHG took them over

[winner69]

https://comcom.govt.nz/__data/assets/pdf_file/0027/292158/Commerce-Commission-v-The-Market.com-Limited-Judgment-7-September-2022.pdf

Full details in that document linked

[Habits]

Cow Jiving ....

https://www.youtube.com/watch?v=bCrz03-OJtY

Dancing with the Cows ....

come on swing with those udders ....

"Classic from Habits...."

Rattle those dags, Here's one for the boomers

https://youtu.be/N9lGMHCgiAM

[Waltzing]

Yes time for some old fashioned doco's on sheep shearing and other traditional arts and country skills...

the backbone of the country's exports including milking cows, fishing, forestry ect....

wellington doesnt even known what they are.. i can inform that CEO's of government commissions simply believe that farming is a big big problem...ive herd (heard) it first hand.

It will be truely interesting to see the detailed Financials and retail results from the WHS.

[bull....]

a PR disaster

[winner69]

Big fine by dodgy stuff with 1-day

Last year Noel Leeming got told off by CC for 'selling' Kindles they didn't have#


No doubt WHG stores as dodgy as all retailers .... so no worries ....until they get caught

[JSwan]

SP on a tear for no reason?

[peat]

SP on a tear for no reason?
yes relatively speaking this really stood out
and on higher than average volume too.

[LaserEyeKiwi]

Buoyed by the Briscoes results perhaps? If WHS is in the same ballpark in terms of year on year comparison (and dividend) - then the stock does look cheap. Everyone assuming profits will collapse, if they don’t….

[percy]

Buoyed by the Briscoes results perhaps? If WHS is in the same ballpark in terms of year on year comparison (and dividend) - then the stock does look cheap. Everyone assuming profits will collapse, if they don’t….

Will be interesting seeing what their online growth is.

[BlackPeter]

Yep, interesting whether this is a case of somebody in the know buying or just somebody buying the rumour ....

Anyway - September 28th is the day where it all will be revealed to all of us, and we will be wiser for it.

[Grimy]

K Mart announces 4 new stores to open this year (not sure if this calendar year-or in the next 12 months) and more to follow. Ashburton first to get one. Probably not good for WHS.

[BlackPeter]

K Mart announces 4 new stores to open this year (not sure if this calendar year-or in the next 12 months) and more to follow. Ashburton first to get one. Probably not good for WHS.

Might well be an indication that players expect the industry to boom, which would be good for WHS ;) ;

Actually - competition is good for business, as long as the playing field is level. Ever wondered, why competitors tend to clump together?

[Habits]

Might well be an indication that players expect the industry to boom, which would be good for WHS ;) ;

Actually - competition is good for business, as long as the playing field is level. Ever wondered, why competitors tend to clump together?

So long as whs keep raising the standard. But not if they're are considered less desirable option for consumers. As for me I continue to shop whs as it is the one that springs to my mind and is easier to access. A bit like Bunnings

[winner69]

Briscoes man Rod says in these tough times forvsome consumers his plan is of the plan to “try and eat someone else’s lunch”.

This meant if there were 10% fewer people willing to go and buy something it would mean taking customers from the our competitors.

Good old Rod ….he knows the reality of retail …it’s beating your competitors when you havevtoo …..something not in WHS culture

Hope Rod leaves some crumbs in the lunch box for Nick

[Habits]

Sp is up this morning 2c despite the dollar dropping. Warehouse where-else

[Sideshow Bob]

https://www.nzx.com/announcements/399491

Second highest Group sales ever of $3.3B as Kiwis seek out affordable products in another challenging year

Highlights include:

• Group sales of $3.3 billion, down 3.5% on prior year, up 3.8% on FY20
• FY22 gross profit margin decreased compared to FY21, but improved during the year with FY22 H2 gross profit margin of 36.1% up 140 basis points from FY22 H1 gross profit margin of 34.7%
• Reported Net Profit After Tax of $89.3 million – down 18.3% on prior year
• Adjusted Net Profit After Tax of $85.5 million – down 48.9% on prior year
• Both reported and adjusted NPAT reflect $11.4 million (after tax) reduction due to accounting treatment of cloud computing software arrangements
• Group online sales up 39.8% and making up 15.3% of total Group sales, and within this, click and collect up 54.9% and making up 49.0% of total Group online sales1
• Strong growth in MarketClub, our new Group membership programme, acquiring nearly 600,000 active members in first 10 months
• MarketMedia announced as new unified retail media platform, with retail media revenue growing +23% on prior year to $20.9M
• Final dividend of 10.0 cents per share declared, resulting in full year dividends of 20.0 cents per share.

[percy]

v• Group online sales up 39.8% and making up 15.3% of total Group sales.
Positive improvement.Still more growth to come from this channel.

[bull....]

reckon there just track back to yr 19/20 figures and div's as inflation bites. yr 21 an outlier

[jimdog31]

themarket.com i see is continuing to lose big $$ as i called some time ago. $24m loss.

There is no road to profitability here.

That is a whoping 20% hit to groups overall profit.

T7 back into losses. this will increase next year.

[alokdhir]

Yield appeal also fading with Westpac type Bonds yielding 6.2% with no equity risk ....Not much chance of growth here also ....so 20C dividend should not hold it over $ 3 for long !!!

[winner69]

Lower adjusted profit than I expected

H2 profit margin 2.4% of sales and likely indicator of future profitability (margins and costs under pressure).

Bit of a worry that after selling $3.3 billion of stuff they generated only $7m of cash - and then spent $107m on capex and paid $96m in dividends

The much touted cash mountain of $160m has turned into a pile of debt of $41m

Message to Nick - not a good year really and there's too many excuses and warm fuzzies in your presentation. Hope you realise F23 will be even more difficult and that instead of focusing on doing awesome things' for the world you just get on and concentrate on making a decent profit.

[RTM]

Yield appeal also fading with Westpac type Bonds yielding 6.2% with no equity risk ....Not much chance of growth here also ....so 20C dividend should not hold it over $ 3 for long !!!

When I got started Craigs gave me a model portfolio. Contained 20-30% bonds and they were recommending laddering them to even out yields / income over time.
Not sure what they recommend now. I did put some money into bonds, not well laddered, but got lucky with the timing...interest rates in general dropped and they were pretty attractive for years. In these times of increasing interest rates personally I would be pretty cautious about how much I put into bonds with supposedly attractive interest rates. Interest rates could well go higher yet. You are taxed on the interest received. And most worryingly, inflation is eating away at your $20 - 30K that you have parked in there for maybe 5 years.

I may well have this wrong...but I'm thinking I would rather take advantage of lower prices to buy stocks that will (hopefully) eventually do well, even if there is a year or two or three of pain. To me this seems a better strategy.

Now...finding the right stocks...that's another question altogether.

[alokdhir]

When I got started Craigs gave me a model portfolio. Contained 20-30% bonds and they were recommending laddering them to even out yields / income over time.
Not sure what they recommend now. I did put some money into bonds, not well laddered, but got lucky with the timing...interest rates in general dropped and they were pretty attractive for years. In these times of increasing interest rates personally I would be pretty cautious about how much I put into bonds with supposedly attractive interest rates. Interest rates could well go higher yet. You are taxed on the interest received. And most worryingly, inflation is eating away at your $20 - 30K that you have parked in there for maybe 5 years.

I may well have this wrong...but I'm thinking I would rather take advantage of lower prices to buy stocks that will (hopefully) eventually do well, even if there is a year or two or three of pain. To me this seems a better strategy.

Now...finding the right stocks...that's another question altogether.

Yesterday saw trading in IFT270 at 6.4% yield ...thats the new normal at the moment ....as this has some time to run ...so high yields of Bonds will seep in SP of stocks in next few weeks if not months ...Good bargains will be coming ...I agree buying stocks is better and smarter option then bonds but high yield of bonds help u get those bargains ...that was the main point I was trying to make

[BlackPeter]

OK - Its only the second best sales year in history, must be terrible, isn't it? Margins dropped as well.

Sill - when looking at some of the metrics, it doesn't look quite like the disaster some of the posters here seem to imply:

RoE - 21.2% - not bad. A lot of the high hyped stocks around this forum fare worse.

Debts have been traditionally high, but they managed to reduce them. Liabilities to assets dropped to 67.1% (down from nearly 80% 2 years ago). Sill not really conservative, but clear improvements.

Good to see the market growing ...

Dividend yield of 5.8% (that's without doing all this imputation acrobatics) does not cover inflation, but still - one of the better dividend payers around.

Outlook - sure, they are cautious in the current climate, but I notice analysts expect them to get back this FY to where they were the year before.

This would result in a forward PE of 11.4 and a forward earnings CAGR of 6.2.

Not a bright but quickly crashing shooting star ... but not too bad for a sustainable retailer I dare say.

And yes - I used the word sustainable tongue in cheek, but hey - they want to get there and lets face it - it will be easy for them to make big progress in this direction.

Discl: hold some and looking forward to this and the next fat dividend.

[BlackPeter]

Yesterday saw trading in IFT270 at 6.4% yield ...thats the new normal at the moment ....as this has some time to run ...so high yields of Bonds will seep in SP of stocks in next few weeks if not months ...Good bargains will be coming ...I agree buying stocks is better and smarter option then bonds but high yield of bonds help u get those bargains ...that was the main point I was trying to make

Don't forget though that you need to pay tax on the bond interest, while many of the dividends come with imputation credits (i.e. tax already full or partially paid). A 5% dividend with imputation credits will leave more money in your pocket than a 6% interest payment ...

Just make sure you don't compare apples and oranges!

[alokdhir]

Don't forget though that you need to pay tax on the bond interest, while many of the dividends come with imputation credits (i.e. tax already full or partially paid). A 5% dividend with imputation credits will leave more money in your pocket than a 6% interest payment ...

Just make sure you don't compare apples and oranges!

I give all readers here that much credit that they know Bond yields are Gross while dividends mostly are 28% imputed ...so didnt feel the need to highlight ....What was more important that Gross yields of Bonds is going up fast and its making yield stocks looking expensive if u factor in equity risk premium !!

[RTM]

Yesterday saw trading in IFT270 at 6.4% yield ...thats the new normal at the moment ....as this has some time to run ...so high yields of Bonds will seep in SP of stocks in next few weeks if not months ...Good bargains will be coming ...I agree buying stocks is better and smarter option then bonds but high yield of bonds help u get those bargains ...that was the main point I was trying to make

Yes...they will be attractive to some.
https://www.nzx.com/markets/NZDX
The Synlait one at 8% for a couple of years looks good. They will last that long...right ?
https://www.nzx.com/instruments/SML010

[RTM]

I give all readers here that much credit that they know Bond yields are Gross while dividends mostly are 28% imputed ...so didnt feel the need to highlight ....What was more important that Gross yields of Bonds is going up fast and its making yield stocks looking expensive if u factor in equity risk premium !!

Equity risk premium over what time period ?
1 month...6 Months ? 12, 36 60 , 120 ?

[jimdog31]

your not worried that a side business like the market is increasingly eating up earnings? the warehouse does all the hard yards in retail and then they topup themarket & T7? 20,21,22 were the best times retail has seen in years and these 2 businesses lost a combined $50m?

What will they lose in a downturn?

[BlackPeter]

I give all readers here that much credit that they know Bond yields are Gross while dividends mostly are 28% imputed ...so didnt feel the need to highlight ....What was more important that Gross yields of Bonds is going up fast and its making yield stocks looking expensive if u factor in equity risk premium !!

... which might be just a reflection on your personal view of a high equity risk and a low bond risk.

As well - bond rates hardly increased over the last three months - I got already in June IFT bonds paying around 6%. Will they go up in the coming months? Your guess might be as good or bad as anyone else's?

Fact is that there are not many countries around which would survive paying much higher rates to serve their debt load, unless we keep a crushing inflation, and if the latter is the case you will be - when it all is over and dusted - glad to own shares in a good company (which is a defined fraction of a company) instead of owning bonds in a currency which might have only fractions of its past value.

I recommend to study e.g. the aftermaths of WWI or WWII - it was not the bond holders who smiled after the event, but the owners (and shareholders) of good production facilities.

[BlackPeter]

your not worried that a side business like the market is increasingly eating up earnings? the warehouse does all the hard yards in retail and then they topup themarket & T7? 20,21,22 were the best times retail has seen in years and these 2 businesses lost a combined $50m?

What will they lose in a downturn?

Hard to say.

Obviously - if all the geniuses with correctly operating crystal balls sit and publish exclusively on this site, leaving for the company only idiots to hire, than yes, I am worried.

I trust however that the Gauss distribution of talent is evenly applicable for managers as well as for armchair warriors, and in this case I accept that maybe WHS management might have a plan for these two entities which in due course might add value to shareholders.

As well - I have not really a handle on measuring how much value the market adds to the other business units. I am sure it does add some, given that it sells stuff for them, i.e. some of the current losses well might be "wooden dollars" (as one of my previous CEO's used to call intercompany charges). Do you?

I can see how the Market as well as Torpedo 7 fit into the future strategic vision. Whether it will pay out or not, we shall see, but at least they build a vision without writing overall losses (as some of their competing retailers - e.g. Kogan - did).

I remember amazon writing losses for a long time, and it seems to have paid out for them. I remember Tesla writing losses for a long time (and they still do) and I am not so sure about them.

Obviously - the Warehouse group is neither, but I think the comparisons are still valid and relevant.

[winner69]

Hey BP - you're right in some / most aspects re your comments

Most of the stuff WHS do aren't done for growth, it's essentially done to stay in the game

They will continue to plod along and sell about $3 billion of stuff at 'thin margins' and make about $80m/$90m a year - no more or no less (with the odd bad year now and again)

And will do their best to pay that 20 cent dividend every year - Mr Tindall will see to that as his Foundation needs it to continue their good work

That is all one can really expect from WHS

[winner69]

I update this chart each year just to remind me that the Red Sheds are out there but their relevance in the retail world is rather muted .... measure by continuing to lose market share - even when they meant to do well during tough times

The chart is Red Shed sales as a % of Core Retail as per Stats NZ Retail Sales report. I use Core Retail as a market proxy as that's what the company uses at times

[BlackPeter]

I update this chart each year just to remind me that the Red Sheds are out there but their relevance in the retail world is rather muted .... measure by continuing to lose market share - even when they meant to do well during tough times

The chart is Red Shed sales as a % of Core Retail as per Stats NZ Retail Sales report. I use Core Retail as a market proxy as that's what the company uses at times

Just wondering, winner - is this just Red sheds, or is this the Warehouse group?"

If it is just Red sheds, than I am not surprised ... but what exactly does us this comparison give to assess the group?

[winner69]

Just wondering, winner - is this just Red sheds, or is this the Warehouse group?"

If it is just Red sheds, than I am not surprised ... but what exactly does us this comparison give to assess the group?

Just the Red Sheds (as per heading)

Red Sheds make up about 65% of Group Operating Profit so is relevant to a large degree

I'll do a Group chart for you soon

[LaserEyeKiwi]

your not worried that a side business like the market is increasingly eating up earnings? the warehouse does all the hard yards in retail and then they topup themarket & T7? 20,21,22 were the best times retail has seen in years and these 2 businesses lost a combined $50m?

What will they lose in a downturn?

I’m not holding WHS, but I doubt many New Zealand retailers would consider the last 12 months “the best times retail has seen in years” when Auckland stores were in various stages of lockdowns for over 3 months, international shipping rates spiked to ludicrous levels and staff sickness levels were absurdly high to the point that some retailers simply couldn’t open stores due to lack of staff.

[Muse]

The result was pretty much as I expected.

Intriguing thing are the sales per average store during the quarter:
* Redsheds: up 1.6% on Q4 last year
* Bluesheds: down 6.9% on Q4 last year
* Noel Leeming: down 1.2% on Q4 last year
* Torpedo 7: down 13% on Q4 last year

and how do this quarters average sales per store compare to Q4 Q4 FY19? In cumulative average growth rate terms:
* Redsheds: +4.8%
* Blue: -1.6%
* Noel Leeming: up 9.5%
* TP7: up 1%

Conscious of average inflation since then, that to me sorta implies redsheds has gone well, still above the inflation adjusted trend line and could see some declines in same store sales and slack comes out of demand. Bluesheds is being annhiliated, to me looks like a segment that has been in structural decline for some time. Noel Leeming has been a firecracker for the group and shareholders over the last few years and helped produce some of those nice divies. But it also signals to me it is at risk of quite a substantial fall in same store sales growth as the work from home nesting finishes up, all that excess discretionary income comes under pressure. Tp7 an interesting one to ponder...same store sales grew 26% in Q4 FY20 (even adjusting for the extra week that quarter), fell 6% in FY21, and another 13% this quarter. Hopefully this implies it is bottoming out. Average store count increased from 18 to 23.5, just under 2 new stores each year, and new stores are immature at the beginning.


Very poor cashflow but some of that coming from a normalisation of the unsustainable prior period working capital position.

More important to keep your eye on stockturn. Trending down across all the brands but still healthy, but I'd imagine that it continues to deteriorate particularly for noel leeming.

Prompted a question on a call this morning from Jarden, who questioned the appropriateness of the dividend paid, given it will effectively be funded by more debt.

Movement from net cash to net debt position, and still have to pay out the just declared dividend.

Another question on the market, on when mgmt thought it might produce a profit. The answer was mgmt hoped it might breakeven in ~5 years from launch (so I guess that implies mgmt hope it could break even in 4 years from today given about 1 year in. I doubt it.). If I had a dollar for everytime mgmt used terms like "flywheel, ecosystem, i'd have a lot of dollars.


I enjoyed in the investor presentation they had 3 different types of NPAT, and not one of them was the reported statutory NPAT of $87m.

Again apparent there are huge legacy infrastructure and system gaps steaming from years of underinvestment which is why capex has been and is expected to remain very high (well above depreciation & amortisation excluding IFRS16 lease depreciation)

Q1 FY23 will very likely be up on Q1 FY22 given Q1FY22 was coved effected (particularly august and september, though october was clean and monthly sales in line with the previous october). Expect a triumphant announcement from mgmt and hoorays from the market when it is announced, but that is the last of the covid effected quarters of FY22. Moreover, Q2 FY22 was the strongest quarter in WHS history and will be an exceptionally tough comparable to cycle, and the most important quarter of the financial year, and my guess is will be a very tough quarter, and downhill from there for the remainder of the year.

People forget how elevated consumer demand remains (even adjusted for inflation), and reserve banks rightly or wrongly are out to bring demand down. What's equally or even more important is what is happening to gross profit margins and cost of doing business as a % of sales, neither of those ones good.

I think its very possible that 20c dividend will come under pressure in the coming years. The brightspot is the company can if they want slowdown on trying to grow the market, as a relief valve to offset other headwinds, but that's a conscious choice required of the CEO and he seems really gung ho on it.

Company has hedged expected next 12 month USD requirements by69% or another way hedged for 8 months, and at decent rates of 67c (although that will be down on FY22 so represents a GM headwind). crucially this covers the critical Q2 quarter. The problem is those headwinds turn into a gale force headwind for COGS after 8 months, where they either try to pass it all on (stiffling demand) or absorb some (stiffling margins). No doubt it will be some combination of the both.

still the company's 2nd best result. question is...where to from here. Lots of headwinds this coming year and next.

[jimdog31]

I’m not holding WHS, but I doubt many New Zealand retailers would consider the last 12 months “the best times retail has seen in years” when Auckland stores were in various stages of lockdowns for over 3 months, international shipping rates spiked to ludicrous levels and staff sickness levels were absurdly high to the point that some retailers simply couldn’t open stores due to lack of staff.

Hey LEK what would I know? Only owned retail stores for 15 years :t_up: Briscoes, Michael Hill, WHS (last year) all had record years.

You are right though, the last 6 months have been less great, but the proceeding 24 months were like no other.

[winner69]

For you BP - Group sales growth v growth in Core Retail

Noel Leeming boosted things on acquisition but once that settled down the Group still struggle to keep up with overall retail demand - ie a lesser market presence

FYI Noel Leeming have since December 2020 lost a fair chunk of share of the Electrical and Electronic Sector that Stats NZ use

Never mind - as long as the Group still makes $80m/$90m every year

[jimdog31]

The result was pretty much as I expected.

Intriguing thing are the sales per average store during the quarter:
* Redsheds: up 1.6% on Q4 last year
* Bluesheds: down 6.9% on Q4 last year
* Noel Leeming: down 1.2% on Q4 last year
* Torpedo 7: down 13% on Q4 last year

and how do this quarters average sales per store compare to Q4 Q4 FY19? In cumulative average growth rate terms:
* Redsheds: +4.8%
* Blue: -1.6%
* Noel Leeming: up 9.5%
* TP7: up 1%

Conscious of average inflation since then, that to me sorta implies redsheds has gone well, still above the inflation adjusted trend line and could see some declines in same store sales and slack comes out of demand. Bluesheds is being annhiliated, to me looks like a segment that has been in structural decline for some time. Noel Leeming has been a firecracker for the group and shareholders over the last few years and helped produce some of those nice divies. But it also signals to me it is at risk of quite a substantial fall in same store sales growth as the work from home nesting finishes up, all that excess discretionary income comes under pressure. Tp7 an interesting one to ponder...same store sales grew 26% in Q4 FY20 (even adjusting for the extra week that quarter), fell 6% in FY21, and another 13% this quarter. Hopefully this implies it is bottoming out. Average store count increased from 18 to 23.5, just under 2 new stores each year, and new stores are immature at the beginning.


Very poor cashflow but some of that coming from a normalisation of the unsustainable prior period working capital position.

More important to keep your eye on stockturn. Trending down across all the brands but still healthy, but I'd imagine that it continues to deteriorate particularly for noel leeming.

Prompted a question on a call this morning from Jarden, who questioned the appropriateness of the dividend paid, given it will effectively be funded by more debt.

Movement from net cash to net debt position, and still have to pay out the just declared dividend.

Another question on the market, on when mgmt thought it might produce a profit. The answer was mgmt hoped it might breakeven in ~5 years from launch (so I guess that implies mgmt hope it could break even in 4 years from today given about 1 year in. I doubt it.). If I had a dollar for everytime mgmt used terms like "flywheel, ecosystem, i'd have a lot of dollars.


I enjoyed in the investor presentation they had 3 different types of NPAT, and not one of them was the reported statutory NPAT of $87m.

Again apparent there are huge legacy infrastructure and system gaps steaming from years of underinvestment which is why capex has been and is expected to remain very high (well above depreciation & amortisation excluding IFRS16 lease depreciation)

Q1 FY23 will very likely be up on Q1 FY22 given Q1FY22 was coved effected (particularly august and september, though october was clean and monthly sales in line with the previous october). Expect a triumphant announcement from mgmt and hoorays from the market when it is announced, but that is the last of the covid effected quarters of FY22. Moreover, Q2 FY22 was the strongest quarter in WHS history and will be an exceptionally tough comparable to cycle, and the most important quarter of the financial year, and my guess is will be a very tough quarter, and downhill from there for the remainder of the year.

People forget how elevated consumer demand remains (even adjusted for inflation), and reserve banks rightly or wrongly are out to bring demand down. What's equally or even more important is what is happening to gross profit margins and cost of doing business as a % of sales, neither of those ones good.

I think its very possible that 20c dividend will come under pressure in the coming years. The brightspot is the company can if they want slowdown on trying to grow the market, as a relief valve to offset other headwinds, but that's a conscious choice required of the CEO and he seems really gung ho on it.

Company has hedged expected next 12 month USD requirements by69% or another way hedged for 8 months, and at decent rates of 67c (although that will be down on FY22 so represents a GM headwind). crucially this covers the critical Q2 quarter. The problem is those headwinds turn into a gale force headwind for COGS after 8 months, where they either try to pass it all on (stiffling demand) or absorb some (stiffling margins). No doubt it will be some combination of the both.

still the company's 2nd best result. question is...where to from here. Lots of headwinds this coming year and next.

"The answer was mgmt hoped it might breakeven in ~5 years from launch."

Wow. For something that's losing 20% of overall group profit, you want to be less hopeful and more confident of a breakeven position in 5 years.

[Waltzing]

IT is a nightmare change environment. You need something at the core that is global in this day and age.

If its global you can sell it to the globe less rogue states...

AT least MHJ selling rocks in more than one markets.

You have to hope that the market can increase its market share as most platforms like this run at a loss for a while.

We got around this problem as luck stepped in and someone had a brain wave and a golden egg appeared (quote from Iron Man)....

[Muse]

"The answer was mgmt hoped it might breakeven in ~5 years from launch."

Wow. For something that's losing 20% of overall group profit, you want to be less hopeful and more confident of a breakeven position in 5 years.

Yeah I think I heard that right on the call (was listening in but busy doing other stuff), & totally agree.
Lets say they breakeven in 5 years from FY22 (-25m), and improve linearly to BE by FY27, you'd hope to see losses lessen $5m per annum.

Few other bits and bobs.
On overheads: group currently has a WALT of 4years. Defintely got the feeling to expect more store closures. Want to manage rental expense, but currently "in a difficult period"
On wages: question from an analyst: hope to keep wages growth just slightly less than CPI

and an interesting perspective on which brands they expect will encounter more headwinds in terms of gross profit %, but surprised me & want to double check something when i have more time.

[BlackPeter]

For you BP - Group sales growth v growth in Core Retail

Noel Leeming boosted things on acquisition but once that settled down the Group still struggle to keep up with overall retail demand - ie a lesser market presence

FYI Noel Leeming have since December 2020 lost a fair chunk of share of the Electrical and Electronic Sector that Stats NZ use

Never mind - as long as the Group still makes $80m/$90m every year

Cheers - useful ... and looks less frightening then the Red shed comparison :) ;

Of course, you are right - this does not look like a growth company ... but hey, as long as they don't shrink and keep producing these dividends ... I am happy to keep them in the portfolio.

[BlackPeter]

"The answer was mgmt hoped it might breakeven in ~5 years from launch."

Wow. For something that's losing 20% of overall group profit, you want to be less hopeful and more confident of a breakeven position in 5 years.

Would you prefer management lying at shareholders at plain sight? Lets face it - nobody can forecast business conditions 4 years ahead ...

[jimdog31]

Would you prefer management lying at shareholders at plain sight? Lets face it - nobody can forecast business conditions 4 years ahead ...

Confidence is executing a plan, Hope is a wish.

"We Plan to get the business profitable by 2027, that will depend on certain macro economic factors, but we are confident in our plan"

But hey, if you take confidence from mgmt being hopeful all power to you BP.

[LaserEyeKiwi]

The result was pretty much as I expected.

Intriguing thing are the sales per average store during the quarter:
* Redsheds: up 1.6% on Q4 last year
* Bluesheds: down 6.9% on Q4 last year
* Noel Leeming: down 1.2% on Q4 last year
* Torpedo 7: down 13% on Q4 last year

and how do this quarters average sales per store compare to Q4 Q4 FY19? In cumulative average growth rate terms:
* Redsheds: +4.8%
* Blue: -1.6%
* Noel Leeming: up 9.5%
* TP7: up 1%

…



One other thing to consider on the compares is the Red Shed / Blue Shed integrations. WHS “same store” footprint has gotten progressively smaller as integrated stores effectively carve off ~25% of the footprint to blue sheds.

[LaserEyeKiwi]

Hey LEK what would I know? Only owned retail stores for 15 years :t_up: Briscoes, Michael Hill, WHS (last year) all had record years.

You are right though, the last 6 months have been less great, but the proceeding 24 months were like no other.

Can definitely agree with your last line - everything was almost golden for retail (except Auckland had delta lockdowns a year ago) until Omicron arrived and then the **** hit the fan, quickly followed by re-introduction of overseas travel for kiwis to divert discretionary income towards and OCR ratcheting up the demand killer hammer.

[winner69]

Always pays to keep track of the cash

Here's WHS Free Cash Flow over the years

Don't know what went on buy the last six months (H222) Operating Cash Flow (inc rents) was a $106m OUTFLOW and there was also $51m of capex spend -- cash burn of $161m in 6 months ....things seem out of control

[alokdhir]

Always pays to keep track of the cash

Here's WHS Free Cash Flow over the years

Don't know what went on buy the last six months (H222) Operating Cash Flow (inc rents) was a $106m OUTFLOW and there was also $51m of capex spend -- cash burn of $161m in 6 months ....things seem out of control

Mr B out at first sight of results mean situation dire ...look for sub $ 3 near term !!

Actually best exit timing was Index Rebalancing induced high of $ 3.75 ...imho

[Entrep]

Massively red in a sea of green today

[Habits]

Now we know why the instos were not solidly bidding the price higher in 2021 when the yield was so great, and foodstuffs (or was it woolies) sold out their cornerstone. Altho foodst might push back that the comcom/govt inquiry forced them.

[winner69]

They say you either grow into the future or you’re shrinking into the past.

I get the feeling that WHS are into shrinking into the past even though they've spent the best of $75m in a great restructuring over the last 5 years

F22 profits were about the same as 10 years ago ....hmmmm

[Grimy]

I don't think I can remember a time when they aren't/weren't restructuring.

[BlackPeter]

They say you either grow into the future or you’re shrinking into the past.

I get the feeling that WHS are into shrinking into the past even though they've spent the best of $75m in a great restructuring over the last 5 years

F22 profits were about the same as 10 years ago ....hmmmm

I don't think that a lot of people who would consider the Warehouse a growth stock. They are a cyclical with a reasonable reliable dividends and currently a dividend yield of 6.9% and mainly tax free for anybody able to use NZ imputation credits.

Some investors might consider these attributes attractive.

[Muse]

I don't think I can remember a time when they aren't/weren't restructuring.

My little spreadsheet cuts off at FY17 but since then they have spent $96.8 million in restructuring. FY22 was the first year in 5 years they didn't book any but I got the vibe it might start up again soon.

On top of the restructuring expenses they have lost $45 million on "the markets" the last two financial years.

It reminds me of this very excellent presentation by Aswath Damodaran - NYU godfather of corporate finance - if you go to exactly 16 minutes in he is describing the warehouse perfectly - sums up how I think about their "the markets" venture https://www.youtube.com/watch?v=c20_S-QgvsA

As an aside - I see that Craigs have revised their spot price valuation of the WHS to 2.54 a share with a 12 month target price of 2.70. Their FY23 DPS is 16.5

I guess broker downgrade cycles do happen

[Rawz]

Did a bit of family shopping on Sunday.... went to WHS then Kmart.. (this post is some good ole ST anecdotal evidence so feel free to ignore)..

As a father of a young family that will be spending tens of thousands of $$$ over the next decade on total junk... i think K-Mart is going to dominate the Warehouse. It has some amazingly priced junk and its store is really well layed out. It has a brighter nicer feel about it. I think i am late in discovering K-mart but wow i was impressed. And it was super busy compared to the WHS over the road.

I am yet to go to Costco because its on the other side of Auckland but i feel this will kill WHS dreams of being a big box food retailer.

WHS has gone nowhere in 10 years and probably the same to apply in the next 10 years.

[winner69]

Did a bit of family shopping on Sunday.... went to WHS then Kmart.. (this post is some good ole ST anecdotal evidence so feel free to ignore)..

As a father of a young family that will be spending tens of thousands of $$$ over the next decade on total junk... i think K-Mart is going to dominate the Warehouse. It has some amazingly priced junk and its store is really well layed out. It has a brighter nicer feel about it. I think i am late in discovering K-mart but wow i was impressed. And it was super busy compared to the WHS over the road.

I am yet to go to Costco because its on the other side of Auckland but i feel this will kill WHS dreams of being a big box food retailer.

WHS has gone nowhere in 10 years and probably the same to apply in the next 10 years.

Good feedback rawz

Even if anecdotal it pays to remember this bit of advice - 'when the anecdotes and the data disagree, the anecdotes are usually right'

[winner69]

Hope Noel Leeming doing better than what JB HiFi are doing

JB HiFi Total sales growth for JB HI-FI New Zealand was 27.7% in Q1 (July/ Aug /Sept)

[see weed]

Did a bit of family shopping on Sunday.... went to WHS then Kmart.. (this post is some good ole ST anecdotal evidence so feel free to ignore)..

As a father of a young family that will be spending tens of thousands of $$$ over the next decade on total junk... i think K-Mart is going to dominate the Warehouse. It has some amazingly priced junk and its store is really well layed out. It has a brighter nicer feel about it. I think i am late in discovering K-mart but wow i was impressed. And it was super busy compared to the WHS over the road.

I am yet to go to Costco because its on the other side of Auckland but i feel this will kill WHS dreams of being a big box food retailer.

WHS has gone nowhere in 10 years and probably the same to apply in the next 10 years.
Good points made here. WHS has plenty competition in Auckland. What I would like to know is, how many WHS stores are there around NZ and does K-Mart have a store next to every WHS store in NZ. If K-Mart doesn't have a store next to every WHS, then shoppers will go to WHS to shop with not much choice. Just a thought. Another thing I would like to know, what is the ticker cod for K-Mart on the NZX, in case I want to buy into this NZ company. I like to support NZ companies. I do know WHS is paying me a 10c div next week and sp will prob fall a bit after that. It is about 6.5% yld which is still better than the interest I get in the bank for now. The busy season is starting, might help things along.

[Doug]

[QUOTE=see weed;981849 Another thing I would like to know, what is the ticker cod for K-Mart on the NZX, in case I want to buy into this NZ company. I like to support NZ companies. I do know WHS is paying me a 10c div next week and sp will prob fall a bit after that. It is about 6.5% yld which is still better than the interest I get in the bank for now. The busy season is starting, might help things along.[/QUOTE]
K-Mart is owned by WesFarmers - Aussi company, AFAIK not listed on NZX except via Smartshares. The WHS div yield this year is better than 6.5% - Maybe you forgot the imp credit?

[see weed]

K-Mart is owned by WesFarmers - Aussi company, AFAIK not listed on NZX except via Smartshares. The WHS div yield this year is better than 6.5% - Maybe you forgot the imp credit?
Thank you.

[winner69]

You'd think that with WHS sales being up more than 25% in Q! they be rushing out the announcement

Needs some good news

[Sideshow Bob]

https://www.nzx.com/announcements/402187

Record first quarter sales at The Warehouse as New Zealanders seek value

FY23 First Quarter Highlights:
• Group sales for the 13 weeks to 30 October 2022 (“FY23 Q1”) were $764.7 million, up 21.2% compared to FY22 Q1 and up 12.3% compared to FY20 Q1 (being the last pre-COVID comparative period).
• Record first quarter sales at The Warehouse of $414.6 million, up 39.0% on FY22 Q1, as customers shopped for value with grocery sales up 76.2% and homeware sales up 32.2%.
• Foot traffic increased 61.4% across all brands in FY23 Q1 compared to FY22 Q1 as customers returned to store.
• Group gross profit margin was 32.3% in FY23 Q1, reduced from 32.9% gross profit margin in FY22 Q1.
• MarketClub membership reaches 800,000 members, delivering value to New Zealanders every day.

The Warehouse Group Limited (“the Group”) today reported strong total Group sales of $764.7 million for the FY23 first quarter ending 30 October 2022, up 21.2% on the same quarter in FY22, and up 12.3% on the same quarter in FY20 (being 13 weeks to 27 October 2019 and the last pre-COVID comparative period). FY22 Q1 was heavily impacted by COVID-19 lockdowns from 18 August 2021, including Level 4 for two weeks New Zealand-wide and five weeks in Auckland, with Auckland remaining in Level 3 for the remainder of the quarter.

[winner69]

You'd think that with WHS sales being up more than 25% in Q! they be rushing out the announcement

Needs some good news

Only up 21% on pcp

Just as well for the Red Sheds and to a certain extent Warehouse Stationary - Noel Leeming and Torpedo7 must be a bit of a worry.

On their own measures they have lost market share .... overall retail sales in NZ did better than this

Never mind grocery sales up 76% (wonder what $ base was

Market will like the big numbers ....and on an up day

[winner69]

Gross Margin down 0.6% points

If that carries through for the full year bottom line impact of $20m .... hope they fix that pretty soon

[Muse]

Gross Margin down 0.6% points

If that carries through for the full year bottom line impact of $200m .... hope they fix that pretty soon

Last years Q1 gross profit margin of 32.9% was the worst quarterly gross margin performance they had in some time (Q1 FY21 GP% was 34.9% by way of reference) so a 0.6% YoY drop on already a bad comparable not great.

[winner69]

Last years Q1 gross profit margin of 32.9% was the worst quarterly gross margin performance they had in some time (Q1 FY21 GP% was 34.9% by way of reference) so a 0.6% YoY drop on already a bad comparable not great.

Yep, everybody was excited when retailers (and others) margins sky rocketed through early stages of covid and said the high margins were sustainable

Of course they weren't ....and many are seeing margins drift slowly back (revert) to historical levels

Even the smart ones will see this but they will at least end up slightly higher than where they were a few years ago

[percy]

"customers shopped for value with grocery sales up 76.2%"

Low margin sales increasing will lower overall margin.
No surprises here.
Also remember increasing shelf space for low margin products reduces space for higher margin products.
I found low margin products took more work/time/staff than high margin products.
I always remember a coffee bar next to me that was more like a dairy chips,fags everything.Taken over by a baker who got rid of the lot, and only sold what he produced.Customer count dropped for a short time,then took off.He made a lot of money where the previous owner did not.

[jimdog31]

Yep, everybody was excited when retailers (and others) margins sky rocketed through early stages of covid and said the high margins were sustainable

Of course they weren't ....and many are seeing margins drift slowly back (revert) to historical levels

Even the smart ones will see this but they will at least end up slightly higher than where they were a few years ago

They have cherry picked some highlights here.

"Torpedo7 recorded sales of $37.4 million. This represented growth of 9.4%
compared to FY22 Q1 and sales growth of 57.1% compared to FY20 Q1
(pre-COVID), with three new stores opening in the last 12 months in Petone,
Invercargill and Whangarei taking total stores to 24"

The fy20 q1 figures didn't have several stores Napier, Tauranga, Westfield, Northlink, Rotorua in them , so comparing 24 stores turnover to the base of 16 you would expect it to be higher, but how it reads makes it seem amazing.

TheMarket.com continues to grow with 47 million online sessions in the last
12 months - up 8% from the preceding 12 months. TheMarket.com range has
continued to expand with 5 million active products and over 6,700 brands on
offer from over 1,100 merchants. The launch of Marketplace onto
www.thewarehouse.co.nz (http://www.thewarehouse.co.nz/) is an exciting new channel for TheMarket.com that
will drive ongoing Gross Merchandise Value growth this year.

Are they still measuring the Market on visits & products? Surely they need to start advising $$, Margin & Bottom line. 8% growth in the last 12 months when the underlying loss is massive is only going to mean an even bigger hit to bottom line this coming year.

[BlackPeter]

Only up 21% on pcp

Just as well for the Red Sheds and to a certain extent Warehouse Stationary - Noel Leeming and Torpedo7 must be a bit of a worry.

On their own measures they have lost market share .... overall retail sales in NZ did better than this

Never mind grocery sales up 76% (wonder what $ base was

Market will like the big numbers ....and on an up day

You are a tough man to please ...

But anyway - good to see that the Red sheds and Torpedo 7 are the growth leaders. (nearly) double digit growth even when compared to Pre-Covid times.

14301

Not sure why they still bother with the Blue sheds (or blue isles these days) - office stuff is boring.

Noel Leeming - probably worthwhile to drop as well and integrate into the red sheds ...

[winner69]

Hope Noel Leeming doing better than what JB HiFi are doing

JB HiFi Total sales growth for JB HI-FI New Zealand was 27.7% in Q1 (July/ Aug /Sept)

Noel Leeming sales up 3.3% in Q1

Aug/Sep/Oct period (NL) slightly different from Jul/Aug/Sep period but +27% v 3.3% is a HUGE.difference. Retail data would suggest that 3months to Oct saw higher growth than 3 months to Sept.

Something not working for Noel Leeming?

[Muse]

You are a tough man to please ...

But anyway - good to see that the Red sheds and Torpedo 7 are the growth leaders. (nearly) double digit growth even when compared to Pre-Covid times.

14301

Not sure why they still bother with the Blue sheds (or blue isles these days) - office stuff is boring.

Noel Leeming - probably worthwhile to drop as well and integrate into the red sheds ...

The FY21 comparison is interesting indeed BP particularly when you consider gross profit dollars earnt during the quarter




Q1
Q3



FY21
FY23


Revenue
738.5
764.7


GP %
34.9%
32.3%


GP $
257.7
247.0



$10 million less in margin earnt relative to FY21. Plus with overheads running hot hot hot that compounds the decline in EBIT.

Optically TP7 growing topline (that much not in dispute) but that's only due to an aggressive store opening programme. Average revenue per store continues to fall: $1.69m in Q1FY21, to $1.63 in Q1 FY22, to $1.56m in FY23 - and that includes inflation. TP7 stores carry the second highest overheads per store in the WHS portfolio, so its not a surprise after TP7 scrapped through to a small profit in FY21 it sunk back down into a loss making position in FY22 and with the decline in revenue per store that could well accelerate.

[jimdog31]

The FY21 comparison is interesting indeed BP particularly when you consider gross profit dollars earnt during the quarter




Q1
Q3



FY21
FY23


Revenue
738.5
764.7


GP %
34.9%
32.3%


GP $
257.7
247.0



$10 million less in margin earnt relative to FY21. Plus with overheads running hot hot hot that compounds the decline in EBIT.

Optically TP7 growing topline (that much not in dispute) but that's only due to an aggressive store opening programme. Average revenue per store continues to fall: $1.69m in Q1FY21, to $1.63 in Q1 FY22, to $1.56m in FY23 - and that includes inflation. TP7 stores carry the second highest overheads per store in the WHS portfolio, so its not a surprise after TP7 scrapped through to a small profit in FY21 it sunk back down into a loss making position in FY22 and with the decline in revenue per store that could well accelerate.

100% it will. People costs in retail are going through the roof, and most retail rents have some CPI component to them.

The size of the T7s they open doesn't seem to correspond to the locale (typically taking Warehouse stationary leases on)

Margin will also get hammered further as alot of buying is being done in a lower USD range (across all brands i might add)

[winner69]

Noel Leeming sales growth over the years quite interesting

Lockdowns good for them --- maybe when all the computer gear and TVs bought during lockdown will need to be replaced soon to give sales another boost. That be good for them

On the other hand might just revert to lowish growth as seen pre-covid.

But it seems JB HiFi doing better at the moment

[winner69]

Big day on NZX but WHS hardly moved after a sales update

Suppose one could assume market not that impressed with update.

[850man]

Big day on NZX but WHS hardly moved after a sales update

Suppose one could assume market not that impressed with update.

Started out with a high and a roar with a 5% jump in SP but fizzled out to nothing by end of day

[Sideshow Bob]

Started out with a high and a roar with a 5% jump in SP but fizzled out to nothing by end of day

Also goes ex-dividend next Wednesday 16/11

[winner69]

K Mart sales down 1.1% in year to June. Red Sheds sales down 4.3% in year to July

K Mart sales $713m v Red Sheds $1.727

K Mart NPBT $68m v Red Sheds $75m ,,,,,,, less than half the sales of Red Sheds but sort of same profitability

K Mart Gross Margin 40% of sales about the same as Red Sheds

So its all about efficiencies and productivity with K Mart CODB a lot better than Red Sheds

[BlackPeter]

K Mart sales down 1.1% in year to June. Red Sheds sales down 4.3%

K Mart sales $713m v Red Sheds $1.727

K Mart NPBT $68m v Red Sheds $75m ,,,,,,, less than half the sales of Red Sheds but sort of same profitability

K Mart Gross Margin 40% of sales about the same as Red Sheds

So its all about efficiencies and productivity with K Mart CODB a lot better than Red Sheds

Interesting story, but slightly confused where you've got your numbers from.

This is what the Warehouse reported at HY (but I think that's to July, isn't it?):

14335

Good to see that Torpedo 7 saved the day : ) ;

[winner69]

I'm so sorry for confusing you Black Peter

My bad --- I should added 'year to July' after Red Shed sales down 4.3%

Different periods but near enough the same to make a comparison

Numbers here in FY result preso
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/399491/379868.pdf

On a more serious note are you OK at the moment ... you seem to be saying you are confused quite often these days.

[BlackPeter]

I'm so sorry for confusing you Black Peter

My bad --- I should added 'year to July' after Red Shed sales down 4.3%

Different periods but near enough the same to make a comparison

Numbers here in FY result preso
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/399491/379868.pdf

On a more serious note are you OK at the moment ... you seem to be saying you are confused quite often these days.

Just trying to be polite :p ; Sounds so much better than saying your statement is wrong, doesn't it :) ;

Remember - ... always learning ....