A second-half trading boost for The Warehouse propelled its profit beyond forecast guidance, but it was down 6% on last year's profit of more than $60million.
Analysts' outlooks for The Warehouse (WHS) are for a similar profit in the year ahead, but with increasing concerns over headwinds as the New Zealand dollar weakens against its US counterpart.
Revenue for the year to August was up 4.7%, from $2.65billion to $2.77billion, earnings before interest and tax decreased 26.2%, from $118.6million to $87.4million, while adjusted net profit was down 5.9%, from $60.6million to $57.1million.
The adjusted $57.1million after tax profit was above the company's guidance range of $52million $56million.
Chief executive Mark Powell said the second half performance was particularly encouraging.
''After a period of significant catch up investment it was good to see strong profit leverage from continued sales growth,'' he said in a statement.
He also noted that with almost $150 million in annual online sales, WHS was well placed to take a lead in the industry wide digital revolution.
New Zealand online sales have grown, including through acquisition, from $18.8million in 2011 to $149.2million in 2015.
WHS delivered a final 5c dividend, bringing its full year to 16c, in line with earlier guidance.
Forsyth Barr broker Suzanne Kinnaird said the result was ahead of expectations, which was underpinned by strong second half trading by WHS' ''Red Sheds''.
''It was a story of two halves, with adjusted net profit after tax down 19% in the first half, but up 37% during its seasonally weaker second half period,'' she said.
The Red Sheds have reported 18 consecutive quarters of same store sales growth and second half operating profit up 56.6%, from $16.3million in 2014 to $25.5million in 2015.
Mrs Kinnaird said the commentary outlook indicated WHS expected adjusted after tax profit to be ''in line'' with the full year result of $57million, which was ''modestly below'' Forsyth Barr's expectations of $59million.
While WHS will face headwinds from the depreciating New Zealand dollar, hedging will assist in delaying the impact.
''Offsetting the impact will be a key strategic focus ... but we are not expecting WHS to be able to recoup the full impact through pricing,'' she said.
Craigs Investment partners broker Peter McIntyre said no full year 2016 guidance was given. The company commented earnings were significantly influenced by Christmas trading and it was too early to provide guidance.
''However, the key elements of the group's strategic plan are expected to ensure adjusted full year 2016 net profit after tax is in line with full year 2015,'' Mr McIntyre said.
He said headwinds included the decline in the New Zealand dollar, lower domestic inflation and domestic economic headwinds.
WHS chairman Ted van Arkel said full year 2016 earnings would be ''significantly influenced'' by Christmas trading performance, and the expected losses associated with the launch of the new financial services business.
At a glance
• Employs 12,000
• 92 Warehouse stores
• 73 Noel Leeming
• 5 Lifestyle Appliance
• 65 Warehouse Stationery
• Several online businesses
• Full year turnover $2.8 billion
