The Warehouse Group (WHS) H2 2024 earnings summary

Executive summary

• FY 2024 was one of the most challenging years in company history, with significant macroeconomic headwinds and operational issues leading to the first-ever annual loss.

• Leadership changes included a new interim CEO and board member, and a strategic reset away from the group ecosystem model to focus on three core brands, emphasizing cost reduction and capital discipline.

• Divestment and closure of underperforming businesses, notably Torpedo7 and TheMarket.com, contributed to the annual loss.

• No final dividend declared; interim dividend of NZD 0.05 per share represented a 92% payout ratio on adjusted NPAT.

• Group sales declined 6.2% to NZD 3.04 billion; operating profit fell 65.3% to NZD 28.9 million.

Financial highlights

• Group sales: NZD 3.04 billion, down 6.2% year-over-year; gross profit: NZD 1.02 billion, down 6.2%; gross margin flat at 33.6%.

• Net loss after tax was NZD 54.2 million, compared to a net profit of NZD 29.8 million last year, driven by a NZD 60.5 million loss on Torpedo7 disposal and other one-off items.

• Adjusted net profit after tax (continuing operations) fell to NZD 18.9 million, down 67.1% year-over-year.

• Operating profit: NZD 28.9 million, down 65.3%; operating margin 1.0%.

• Reported EPS: (15.7)c; Adjusted EPS: 5.5c; dividend per share: 5.0c, down 37.5%.

Outlook and guidance

• Market conditions remain tough and unpredictable; early FY 2025 trading shows soft sales and gross margin pressure as winter stock is cleared.

• Focus is on regaining market share, especially in higher-margin categories, with new product ranges expected to improve performance over the year.

• No further guidance provided on H1 FY 2025 operating profit.

• Q1 FY 2025 trading update scheduled for November 8, 2024.