The Warehouse Group (WHS) H1 2026 earnings summary

Executive summary

• Sales reached NZD 1.6 billion for H1 FY 2026, up 0.3% year-over-year, with like-for-like same store sales up 0.5% and improved profitability despite a challenging retail environment.

• Operating profit rose 37.7% to NZD 26.9 million, reflecting disciplined cost control, a leaner operating model, and new management focus.

• Net profit attributable to shareholders was NZD 15.7 million, up from NZD 11.8 million year-over-year; adjusted net profit was NZD 17.9 million, up from NZD 10.7 million.

• No interim dividend declared due to ongoing economic uncertainty and a focus on rebuilding shareholder value.

• A cost reset and restructuring program was initiated in November 2025 to improve profitability, including a partnership with Tata Consulting Services.

Financial highlights

• Gross profit was NZD 520.5 million, with a gross margin of 32.3%, slightly down from the prior period due to clearance activity.

• Group operating profit increased 38% to NZD 27 million, driven by cost savings and lower depreciation.

• Adjusted NPAT increased 67.1% to NZD 17.9 million; reported NPAT up 33.6% to NZD 15.7 million year-over-year.

• Free cash flow was NZD 3.1 million, a significant improvement from negative NZD 45.2 million in the prior year.

• Net debt improved to NZD 93 million, with average daily bank borrowings down NZD 52 million year-over-year.

Outlook and guidance

• Sales in the first six weeks of H2 FY 2026 were down 0.2% year-over-year, with a flat trend continuing.

• Focus remains on margin recovery, further cost reductions, tighter inventory management, and disciplined capital expenditure.

• Cautious outlook for H2 due to geopolitical risks, rising freight costs, and economic uncertainty, with management monitoring global events.

• The financial impact of these events cannot be reliably estimated at this time.