The Warehouse Group (WHS) H2 2025 earnings summary

Executive summary

• Group sales increased 1.6% to $3.1 billion, but like-for-like sales were flat amid challenging economic conditions and heightened retail competition.

• Operating profit was $1.3 million, with a net loss of $2.8 million, an improvement from a $54.2 million loss in FY24; no dividend was declared for FY25.

• Leadership changes included Mark Stirton as CEO and a refreshed executive team, with a brand-led strategy showing early traction.

• Focus remains on cost control, margin improvement, and turnaround initiatives.

Financial highlights

• Gross profit margin declined by 140 basis points to 32.2%, mainly due to a highly promotional environment and category mix shifts.

• Cost of doing business decreased 40 basis points to 32.2% of sales, with head office costs down 7.8% and depreciation down 7.4%.

• Free cash flow was negative $45.2 million, impacted by 53rd week timing and year-end payments.

• Net debt increased to $96.1 million, mainly due to timing of supplier payments and higher goods in transit.

• Capital expenditure reduced to $12.4 million from $39 million in FY24.

Outlook and guidance

• Retail environment expected to remain challenging through 2025, with low consumer confidence and cost-of-living pressures.

• FY26 focus is on margin recovery, cost reduction, and working capital unlocks, especially in higher margin categories.

• Overhead management and selective capital investment are key priorities; management targets cost of doing business below 31% of sales in the medium term.