Canterbury quake helps Warehouse

Restocking of damaged Christchurch houses and businesses helped The Warehouse report improved sales for the three months ended May 1.

The result was significant for the Red Sheds, which broke five consecutive quarters of falling sales to report revenue of $327 million, up 1% compared with the previous corresponding period (pcp).

Year-to-date sales for the Red Sheds were $1.13 billion, down 0.9%. Same-store sales for the quarter were up 2.2%.

Warehouse Stationery had third-quarter sales of $54.5 million, up 4.3% on the pcp and the seventh consecutive quarter of growth. Third-quarter same-store sales were up 4.9%.

Total group reported sales for the quarter were $381.5 million, up 1.4%.

Craigs Investment Partners broker Chris Timms said the Easter trading period and the restocking of houses and businesses had turned out to be positive for the group.

"This is probably a bit of an anomaly as it has broken a trend for the Red Sheds which have had flat sales. The lift could be short term," he said.

The Warehouse group chief executive Ian Morrice said the result was positive, but the market remained challenging in every respect.

As expected, CDs and DVDs continued to experience double-digit sales falls in the Red Sheds but Easter trading was up on last year.

Following the February earthquake, two Red Shed stores remained closed in Christchurch.

"The priority for our stores in the area is to ensure the needs of the Christchurch community are met. Increased demand for household consumables, home appliances, housewares, bedding, storage and other essentials was very evident during the quarter," he said.

One Warehouse Stationery store remained closed in Christchurch.

Chairman Graham Evans said Mark Powell had assumed full operational responsibility for the group and Mr Morrice remained with the business in a consulting and project capacity.

The directors confirmed their earnings forecasts of a reported profit between $76 million and $80 million for the full year.