"We have reduced our forecast by $3 million to $93.5 million."
Mr Young was commenting on the March quarter results from The Warehouse Group, which fell 4.3% to $394.6 million when compared to the previous corresponding period (pcp).
Group sales for the financial year to date were $1.34 billion, down 1.4% on the same period last year.
The Red Sheds reported third quarter sales of $337.6 million, down 3.5% on the comparable period, and year-to-date sales of $1.19 billion, down 0.8% from last year.
Same store sales for the quarter were down 3.5%, but cycled against a very strong third quarter last year.
"Consumer demand has softened since the end of January with a marked slow down in demand for high ticket items, and a slow start to the autumn/winter season with mild weather experienced across the country".
"We remain confident however that we have a strong seasonal offer in apparel and winter home products for when the weather cools," managing director Ian Morrice said in a statement to the New Zealand Stock Exchange.
Warehouse Stationery had third quarter sales of $57 million, down 8.5% on the comparable period, and year to date sales of $153.7 million, down 6.1% on last year.
Same store sales for the quarter were down 7.4%.
Mr Morrice said the third quarter for the stationery division was compared against a very buoyant quarter last year.
Product availability was improving, but had continued to affect overall sales performance.
The full-year result for the financial year ending July 27, 2008 would be released on September 12, 2008.
Mr Young said the group had seen a marked slow down in the sales of big ticket items such as appliances, televisions and furniture.
Home improvement sales had also been slower.
Apparel sales in the third quarter would have been affected by the warm autumn.
But in the last two weeks, management said winter season sales had started encouragingly.
The group remained optimistic on the fourth quarter performance of apparel and seasonal lines, Mr Young said"Management commented on increased discounting in the market, but we believe gross margins are probably only slightly down on pcp."
Stationery sales were disappointing, Mr Young said.
The Warehouse is considered a takeover target by both Foodstuffs New Zealand and Australian supermarket group Woolworths.
Mr Young said there was a 50% to 60% probability of the Commerce Commission appeal being rejected and a subsequent offer being made.
Any offer was likely to below earlier expectations.
The Commerce Commission is legally challenging Foodstuffs New Zealand's and Woolworth's right to make takeover bids.
The Warehouse Group has 85 Warehouse NZ stores and 43 Warehouse Stationery stores. The group directly employs more than 8000 people in New Zealand.
- Mr Young's disclosure statement is available on request from Forsyth Barr.
