The Warehouse has reported an expected boost to Christmas sales did not materialise but instead delivered "flat" sales growth, with expectations its half-year after tax result to the end of January will mirror last year's $56.8 million.
Following the announcement, The Warehouse's share price was down 3.3% at $4.07, but on low volumes.
Warehouse group chief executive Ian Morrice said that for the nine weeks to January 3 total sales were flat, like the same period last year, and same-store sales were also flat, year on year.
"We had anticipated continued steady sales growth over Christmas but this didn't materialise. We believe that our sales are indicative of the broader non-food retail market overall," Mr Morrice said in a statement yesterday.
Craigs Investment partners broker Peter McIntyre said while Mr Morrice had indicated last November the unpredictability of retailing, positive economic data toward the end of the year had likely raised all retailers' Christmas expectations.
"Shoppers have still been cautious on their spending over Christmas," Mr McIntyre said.
However, because of increasing competition in retailing he expected "heavy discounting," and the subsequent fall in profit margins was also a factor.
The Warehouse's trading was considered a barometer for the retail sector, and Mr McIntyre forecast other listed retailers would similarly report low or flat sales in forthcoming updates and half-year reports.
Mr Morrice said adjusted group after-tax profit for the first half of the financial year ending January 31 was expected to be similar to last year's adjusted after-tax profit of $56.8 million.
The half-year results are scheduled to be reported on March 12.
