WHS - Warehouse Group

[Minimoke]

"The Group said retail trading across New Zealand continued to be challenging with increasingly subdued consumer demand further compounded by mild winter weather, resulting in lower than anticipated fourth quarter sales."

I drove past one of our new shopping precincts yesterday - Northlink. Its got a Discount Chemist, Rebel Sport, Briscoes, K mart and the like. Its not a covered mall. The car park was full and there appeared to be loads of people out and about. Despite the rain

[Crackity]

Best thing that could happen here would be if Aldi or Lidl bought out the Tindall 48% and they used this to launch a third big supermarket player

I'd be in like a shot as a shareholder

[Basil]

So ~$25m EBIT for full year ....not much NPAT after that no matter what 'adjustments' they come upmwith

Half year EBIT was $44m so second half a LOSS and a pretty big one at that

Getting booted out of the NZX50 looks increasingly likely too at either the Sept or December rebalance.

[BlackPeter]

Surprise, surprise...... a downgrade.

https://www.nzx.com/announcements/433265

GLH.

Sounds like an upgrade compared to analyst expectations to me.

Analyst consensus for FY24 revenue was $3051m (acc. to marketscreener), while their announcement would end up with annual revenue of $3180m (using the mid point of their announcement).

Obviously earnings are anybody's best guess (given all the nasty one-offs), but market screener expected here as well a small loss (vs. WHS reduced profit).

Time to buy when analysts are pessimistic?

[Basil]

https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/finances/
Analysts were expecting $74.56m EBIT for FY24 so the ~$25m number will lead to very serious downgrades in FY24 and subsequent years.
In FY25 and FY26 they were expecting EBIT of $107.7m and $134.5m.  Given they are clearly running at an EBIT loss in 2H FY24, future earnings expectations are going to face some huge adjustments.

I'm with Balance and others that this is completely uninvestable now and in a state of slow and systemic decline.  I'm pretty sure management will make the changes necessary for them to limp along for many more years and provide employment for 10,000+ employees and keep selling milk and other basic necessities to families at what amounts to basically, cost price.  Those seem to be the main shareholders key goals now. I note at $75m EBIT analysts were expecting them to operate at a margin of 2.44%.  Clearly at $25m EBIT they're running at an operating margin of less than 1% and that's before interest costs!  As customers we should support the WHS because in effect, it's become a quasi-Salvation Army store operating as a quasi charity.  By shopping there you are supporting the employment of more than 10,000 employees so you can feel really good about buying basic commodities there at cost price as you are doing good by supporting the retail workers.

[LoungeLizard]

Well, there it is...97c 

Shareholders can relax though because:

"We are exercising tighter cost control and we have a laser focus on trading our
core brands, The Warehouse, Warehouse Stationery and Noel Leeming."

Quite staggering that WHS has been allowed to crash before they even thought about controlling costs and focusing on core business. Shareholders had a right to expect that this would be done as a matter of course. Nick may be gone but there is zero acknowledgment coming from the Board as to just how badly they have let down shareholders and also, by jeopardising the business itself, their staff.

[Left Field]

Time to buy when analysts are pessimistic?

No thanks.

[Red Baron]

No thanks.

But but but Zir Ztephen.....Zuch a nice man, a likeable man....

RB

[BlackPeter]

https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/finances/
Analysts were expecting $74.56m EBIT for FY24 so the ~$25m number will lead to very serious downgrades in FY24 and subsequent years.
In FY25 and FY26 they were expecting EBIT of $107.7m and $134.5m.  Given they are clearly running at an EBIT loss in 2H FY24, future earnings expectations are going to face some huge adjustments.

I'm with Balance and others that this is completely uninvestable now and in a state of slow and systemic decline.  I'm pretty sure management will make the changes necessary for them to limp along for many more years and provide employment for 10,000+ employees and keep selling milk and other basic necessities to families at what amounts to basically, cost price.  Those seem to be the main shareholders key goals now. I note at $75m EBIT analysts were expecting them to operate at a margin of 2.44%.  Clearly at $25m EBIT they're running at an operating margin of less than 1% and that's before interest costs!  As customers we should support the WHS because in effect, it's become a quasi-Salvation Army store operating as a quasi charity.  By shopping there you are supporting the employment of more than 10,000 employees so you can feel really good about buying basic commodities there at cost price as you are doing good by supporting the retail workers.

Well, yes - but ...

The EBIT number in market screener do not compare well compared with the numbers The Warehouse announced. Have a look at the 2023 EBIT. Market screener says 102m, while Warehouse says 83.4m.

Difference can't be the sell of Torpedo 7, can it? Or did they really sell 18.6 m EBIT for $1?

Anyway - my post referred to the Topline, not to some CFO defined EBIT, so it does not really matter.

... and yes, my question whether its now a BUY was a light hearted question ... but I realise that WHS might have run out of the light hearted stuff. Lets hope it is just the WHS thread ... sometimes it feels these forums are getting less and less fun.

[winner (n)]

The main thing you can take from the announcement is that in the second half of financial continuing operations are running at a loss .......and it's hard to see much improvement in H125

[Basil]

The main thing you can take from the announcement is that in the second half of financial continuing operations are running at a loss .......and it's hard to see much improvement in the foreseeable future

Fixed that for you. 

[winner (n)]

They finally found the Organisation Chart Nick was using

Doubt whether Journee can really change it ...he seems to be into buzz words

Think other companies use this as well?

Sorry ...can't show you as site only allows small file size and the image is a bit too big ...might figure out how to shrink file size later. ....


...posted in other place

[Basil]

WHS trying to get its, in my opinion, "heavily bloated", head office staff level down to size.
https://www.1news.co.nz/2024/07/11/head-office-job-cuts-coming-at-the-warehouse-group/

[BlackPeter]

WHS trying to get its, in my opinion, "heavily bloated", head office staff level down to size.
https://www.1news.co.nz/2024/07/11/head-office-job-cuts-coming-at-the-warehouse-group/

"Over 1000 people work in the head office."

Jeez, that a lot, even considering that they had at last FY a total head count of 11000.

One bean counter for 10 sales people? Must be very high performing sales people or the bean counters have little to count ;

Well, I think we know the answer to that.

[Greekwatchdog]

"Over 1000 people work in the head office."

Jeez, that a lot, even considering that they had at last FY a total head count of 11000.

One bean counter for 10 sales people? Must be very high performing sales people or the bean counters have little to count ;

Well, I think we know the answer to that.

Sounds like they were run by a bunch of the last governments best friends. Maybe Nick took inspiration from Jacinda.