WHS - Warehouse Group

[Hectorplains]

Downgrade

NZ Herald  "Forsyth Barr has cut the retailer from outperform to neutral, and slashed its 12-month target price from $3.65 to $2.90. Shares closed yesterday at $2.66. The stock is down 25 per cent over the past year. "

They note specifically the threat from Costco but also point to weakening consumer demand, margin pressure and continued higher costs.

[winner (n)]

Oh we set up a test on the 5th...

online purchase T7... 3 sets of Sunglasses , blue on white rims.. Tifosi Vero, skycloud....

see what turns up amd when....

What's turned up waltz?

[Waltzing]

waiting.... waiting on YA... T7....

https://www.youtube.com/watch?v=otvaa4pm26A

https://www.youtube.com/watch?v=rd_gmXHZy3E

[Basil]

They said The Warehouse Group is now trading at a 12x one-year forward price/earnings multiple against their revised forecast "and we believe the risk-reward is balanced".

The Warehouse Group is trading in line with its immediate peers. Briscoe Group is trading at an 11.5x multiple.

Cutting earnings to $70.5m, oh my goodness that's only 20.3 cps and implies with a payout ratio @ 70%, only 14 cps in dividends.
Andy Bowley has asked some good questions in call's I've tuned into so I am pretty disappointed he cannot see that WHS is not a growth company and if we apply the time-tested Ben Graham no growth PE of 8.5 to current year earnings, you're going to struggle to see any value above $2, even assuming this is trough year earnings.  8.5 x 20.3 = $1.72.  Obviously, the market does see FY23 as recession year earnings otherwise the shares wouldn't still be where they are.  Time will tell how well, if at all, this recovers in FY24 and beyond. 

As for comparing WHS with other listed retailers...they're all very different kettles of fish, some with excellent Australian / International growth opportunities and others, none.   I am looking forward to the day HLG is trading at a PE of 12 on FY23 earnings.  It'll happen sooner or later, and you can afford to be very patient when getting a gross yield of ~ 10%.

[Hectorplains]

As for comparing WHS with other listed retailers...they're all very different kettles of fish, some with excellent Australian / International growth opportunities and others, none.  I am looking forward to the day HLG is trading at a PE of 12 on FY23 earnings.  It'll happen sooner or later, and you can afford to be very patient when getting a gross yield of ~ 10%.

Yup, agreed.  That was a lazy piece of 'analysis.'  Certainly The Warehouse's previous adventures in the home of the budgie smuggler were anything but 'excellent,' a different kettle of feesh indeed.

[Waltzing]

Be interesting to compare the performance when it comes ...

"Briscoe Group is trading at an 11.5x multiple."

[Basil]

Ouch that budgie smuggler hurt my eyeballs something terrible lol. 

Agree Waltz - I'd back Rod's abilities over Nick's in a heartbeat.  That said, neither has international expansion opportunities and interestingly both in a steep downturn from a TA point of view.

[Waltzing]

Yes but long term BRISC doesnt have all these troubles and probably better back office...

probably simpler company to run..

WHS just looks like to many moving bits...

SImple is good sometimes ...

Brisc might be a top up later in the year ...

[Hectorplains]

Yeah in a two horse race your money has to be on Rod everytime, after all his Dad was an Adelaide bookie. However, at the moment neither Briscoes, and esp not Whs strike me as compelling investment cases.  Plenty of time to consider retail stocks when the economic metrics are more positive.

[Waltzing]

Brisc might not get to much more compelling if inflation doesnt keep going up....

US 10yr is only now 3.5

forget the local one it doesnt count. Sure Brisc might get to 4 later in the year but what if they dont cut the DIV....

if they dont cut the DIV and Brisc gets to 4 well.... all bets are off or rather

take the bet .... i think ROD'S FATHER WOULD...

[winner (n)]

Brutal ....Jarden says UNDERWEIGHT and target of 2.45

From BusinessDesk

Investment advisory firm Jarden has downgraded its rating for The Warehouse Group from neutral to underweight following a Christmas slump.

In an update published on Monday, analyst Guy Hooper said sales momentum slowed over the holiday period, with group sales falling 5.5% compared to the eight weeks to December the previous year.

With rising cost pressures and dampened consumer confidence, Jarden was forecasting a 4.4% decline in year-on-year sales over the remainder of the 2023 financial year.

Shares in the group dropped 7% on Dec 30 after it disclosed its quarter two results, ranging from a 1.3% drop in sales for The Warehouse to 11.8% for Noel Leeming.

The Warehouse Group shares were trading at $2.63 on Monday morning.

Taking into account factors like earnings guidance and consumer confidence, Hooper revised down the 12-month target price for the shares from $3.15 to $2.45.

"In our view, [The Warehouse Group] is most exposed in the sector to a broader slowdown given the degree of operating leverage in the business and its net debt balance."

[Basil]

Not really brutal.  Wake me up when we're under $2 again.

[winner (n)]

Jeez. ...... hope Nick getting really worried

They said a few weeks ago Noel Leeming sales were DOWN 11.8% compared to the same period last year — basically Nov/Dec period

JB HiFi have just reported their Q2 NZ were UP 9.8% on pcp. (That's Oct/Dec period)

Seems JB HiFi taking Noel Leemings to the cleaners.....gaining big chunks of market share

Should Nick be worried?

Didn't a Noel Leemings man go and join JB HiFi —— hmmmm

[Waltzing]

Well WINNER the T7 order finally arrive today...

Ordered on the 5th...arrive central WAIKATO NZ post mail center on the 11 Th....

Took from the 12th to the 21st for NZ post to get the Parcel here... 25 KM distance.

Glasses...

Customer support was second to none ... great team at T7...

Hopeless team at NZ POST....

Privatise it ...hopeless...

[Clearasmud]

That's a joke.