New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

Warehouse Group Limited / Equity Bottom-Up

<ul><li>The Warehouse Group’s 1Q26 update continued the challenging trading conditions NZ retailers have faced over the past 12–24 months.</li><li>WHS has sharply refocused on its cost base, targeting a more sustainable 31% of sales for its cost of doing business (CODB) through both: (1) head office cost reduction; and (2) top-line growth.</li><li>Meanwhile, near-term earnings risk remains negatively skewed: (1) promotional intensity is rising for Black Friday and Christmas; (2) IKEA opens in December; and (3) competitors continue to gain share.</li></ul>

The Warehouse Group’s 1Q26 update continued the challenging trading conditions NZ retailers have faced over the past 12–24 months.WHS has sharply refocused on its cost base, targeting a more sustainable 31% of sales for its cost of doing business (CODB) through both: (1) head office cost reduction; and (2) top-line growth.Meanwhile, near-term earnings risk remains negatively skewed: (1) promotional intensity is rising for Black Friday and Christmas; (2) IKEA opens in December; and (3) competitors continue to gain share.

The Warehouse Group 1Q26 Trading Update—No New Stock

<ul><li>The Warehouse Group (WHS)'s broadly breakeven FY25 result was largely as expected but is still disappointing in light of its NZ$3.1bn of sales and almost NZ$1bn of gross profit.</li><li>In the meantime, we think FY26 will be another challenging year: while domestic consumer spending is showing signs of stabilisation, gross margins remain under pressure, and competitive tensions will rise with the arrival of IKEA in December 2025.</li><li>We recognise that the leverage in this business is significant, but continue to view the near-term risk-reward as skewed to the downside.</li></ul>

The Warehouse Group (WHS)'s broadly breakeven FY25 result was largely as expected but is still disappointing in light of its NZ$3.1bn of sales and almost NZ$1bn of gross profit.In the meantime, we think FY26 will be another challenging year: while domestic consumer spending is showing signs of stabilisation, gross margins remain under pressure, and competitive tensions will rise with the arrival of IKEA in December 2025.We recognise that the leverage in this business is significant, but continue to view the near-term risk-reward as skewed to the downside.

The Warehouse Group FY25 Result—Big Box, Small Profit

<ul><li>The Warehouse Group (WHS) has issued another downgrade to its FY25 EBIT guidance, expecting to be EBIT breakeven at the mid-point of its revised range, implying a significant loss in 2H25.</li><li>The consumer environment remains challenging with elevated promotional activity, and IKEA's entry will coincide with the key Christmas trading period, presenting challenges for WHS.</li><li>Despite expected EBIT losses, WHS is unlikely to breach its debt covenants and is expected to maintain a positive free cash flow in FY25.</li></ul>

The Warehouse Group (WHS) has issued another downgrade to its FY25 EBIT guidance, expecting to be EBIT breakeven at the mid-point of its revised range, implying a significant loss in 2H25.The consumer environment remains challenging with elevated promotional activity, and IKEA's entry will coincide with the key Christmas trading period, presenting challenges for WHS.Despite expected EBIT losses, WHS is unlikely to breach its debt covenants and is expected to maintain a positive free cash flow in FY25.

<ul><li>The Warehouse Group's 3Q25 trading update was slightly better than expected, with stronger sales but ongoing gross margin pressure due to elevated promotional activity and selling through old stock.</li><li>WHS maintained its 2H25 underlying EBIT guidance for a -NZ$14m loss, with potential downside risk due to warmer-than-normal temperatures impacting winter sales in 4Q.</li><li>The company reported a +2% increase in group sales to NZ$711m, with a shift towards lower average sales prices but increased sales volumes and foot traffic conversion.</li></ul>

The Warehouse Group's 3Q25 trading update was slightly better than expected, with stronger sales but ongoing gross margin pressure due to elevated promotional activity and selling through old stock.WHS maintained its 2H25 underlying EBIT guidance for a -NZ$14m loss, with potential downside risk due to warmer-than-normal temperatures impacting winter sales in 4Q.The company reported a +2% increase in group sales to NZ$711m, with a shift towards lower average sales prices but increased sales volumes and foot traffic conversion.

The Warehouse Group - 3Q25 Trading Update—Rebuilding

<ul><li>WHS reported a less worse 1H25 result than expected, with operating profit at the upper end of its guidance range, and ahead of expectations.</li><li>Gross margin fell across the group, with Red and Blue Sheds experiencing significant declines, while Noel Leeming's gross margin declines were less severe.</li><li>Expectations for 2H25 EBIT are in line with a previous loss, with potential downside risks due to weak gross margin run rates and subdued consumer activity.</li></ul>

WHS reported a less worse 1H25 result than expected, with operating profit at the upper end of its guidance range, and ahead of expectations.Gross margin fell across the group, with Red and Blue Sheds experiencing significant declines, while Noel Leeming's gross margin declines were less severe.Expectations for 2H25 EBIT are in line with a previous loss, with potential downside risks due to weak gross margin run rates and subdued consumer activity.

The Warehouse Group (WHS) - 1H25 Result Initial Impressions

New Zealand

The Warehouse Group Limited operates general merchandise and stationery supply retail stores throughout New Zealand.

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Warehouse Group Limited (WHS NZ)

The Warehouse Group 1Q26 Trading Update—No New Stock

The Warehouse Group’s 1Q26 update continued the challenging trading conditions NZ retailers have faced over the past 12–24 months. WHS has sharply...

Forsyth Barr

The Warehouse Group FY25 Result—Big Box, Small Profit

The Warehouse Group (WHS)'s broadly breakeven FY25 result was largely as expected but is still disappointing in light of its NZ$3.1bn of sales and...

Forsyth Barr

The Warehouse Group A Year in the Red

The Warehouse Group (WHS) has issued another downgrade to its FY25 EBIT guidance, expecting to be EBIT breakeven at the mid-point of its revised...

Forsyth Barr

The Warehouse Group - 3Q25 Trading Update—Rebuilding

The Warehouse Group's 3Q25 trading update was slightly better than expected, with stronger sales but ongoing gross margin pressure due to elevated...

Forsyth Barr

The Warehouse Group (WHS) - 1H25 Result Initial Impressions

WHS reported a less worse 1H25 result than expected, with operating profit at the upper end of its guidance range, and ahead of...

Forsyth Barr

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