The Warehouse Group (WHS) investor relations material

Strategy and operating profit target

• Target of $100m operating profit within three to five years; measure is EBIT pre-IFRS 16, excluding unusual items, and is a non-GAAP measure.

• Plan sequences a reset of retail fundamentals, conversion of stronger foundations into returns, then growth; reaching the target depends on consistent execution.

• Illustrative pathway assumes sales growth of ~2.0% CAGR, gross margin improvement of 150 bps on FY26 and costs growing slower than sales; the levers exceed the target, so not all must deliver in full.

• Initial priorities include a brand-led operating model, simpler systems and processes, faster supply chain, renewed store and brand investment, and stronger retail talent.

FY26 performance and financial priorities

• FY26 operating profit was $22.6m, with a 0.7% operating margin; gross margin was 32.6%, up 40 bps YoY, and cost of doing business was 31.8%, down 40 bps YoY.

• Free cash flow was $79.4m, a $124.6m improvement YoY; net debt fell $79.1m to $17.0m, while bank interest cost declined 60% to $2.7m.

• Gross margin target is 34.1% within three to five years, from 32.6% in FY26; improvement levers are mix (+70 bps), full-price sales (+40 bps) and buying (+40 bps).

• Cost of doing business target is below 31% of sales within three to five years, supported by store productivity, lower cost to serve and occupancy management.

• Annual capex of $40m-$60m is planned, prioritising stores and core infrastructure; growth investment is selective and subject to returns hurdles.

Stores, customers and digital

• The retail platform reaches 1.7m New Zealanders weekly, with 219 stores across three brands, two distribution centres and $3bn of FY26 sales.

• Store investment follows a grade, refresh and grow approach; ambition is 4-5 new stores per year over time, with concepts proven before scaling and capital allocated against hurdles.

• Digital supports store visits as well as online sales: 6 in 10 store sales from known customers start on the website, app or email; FY26 online sales for The Warehouse were $78.6m.

• One additional annual visit from both Life Jugglers and Next Gen NZers is estimated to contribute ~ $40m gross profit annually; the estimate is illustrative.