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.

Thematic (Sector/Industry)

<ul><li>Christmas is a significant trading period for retailers. While 2024 has been a challenging year for the sector, recent listed trading updates and Stats NZ data suggest that sales declines are slowing.</li><li>We expect gross margins will remain under pressure as competition is elevated across the industry.</li><li>Despite this, the sector is optimistic for the year ahead, with our recent Pulse of NZ Business survey showing that retailers have seen demand increase over the last three months. </li></ul>

Christmas is a significant trading period for retailers. While 2024 has been a challenging year for the sector, recent listed trading updates and Stats NZ data suggest that sales declines are slowing.We expect gross margins will remain under pressure as competition is elevated across the industry.Despite this, the sector is optimistic for the year ahead, with our recent Pulse of NZ Business survey showing that retailers have seen demand increase over the last three months. 

Retail Sector - What's in Stock for Christmas & The Year Ahead

<ul><li>Much of the action for the upcoming retail reporting season came to light during confession season in February.</li><li>KMD Brands (KMD) reported disappointing half year sales with declines across all brands; Hallenstein Glassons' (HLG) sales were flat, supported by a strong Christmas trading season and trading down trends; and the Warehouse Group (WHS) announced the sale of its under performing Torpedo 7 business for NZ$1. </li><li>The consumer backdrop has been challenging and we can't see any signs of that changing in the near-term. </li></ul>

Much of the action for the upcoming retail reporting season came to light during confession season in February.KMD Brands (KMD) reported disappointing half year sales with declines across all brands; Hallenstein Glassons' (HLG) sales were flat, supported by a strong Christmas trading season and trading down trends; and the Warehouse Group (WHS) announced the sale of its under performing Torpedo 7 business for NZ$1. The consumer backdrop has been challenging and we can't see any signs of that changing in the near-term. 

Retail Sector - Checking Out Reporting Season

<ul><li>Retailers are facing a challenging outlook</li><li>We expect to see signs of consumers cutting back on non-essential spend by mid-2023</li><li>In this Santa's Stocking report, we include a budget-friendly gift guide for the whole family which works for both last-minute Christmas presents, or gift ideas for the coming year.</li></ul>

Retailers are facing a challenging outlookWe expect to see signs of consumers cutting back on non-essential spend by mid-2023In this Santa's Stocking report, we include a budget-friendly gift guide for the whole family which works for both last-minute Christmas presents, or gift ideas for the coming year.

Retail Sector: Santa's Stocking: What's in Store for Christmas?

Equity Bottom-Up

Warehouse Group Limited / Equity Bottom-Up

<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.

New Zealand

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

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Warehouse Group Limited (WHS NZ)

Retail Sector - What's in Stock for Christmas & The Year Ahead

Christmas is a significant trading period for retailers. While 2024 has been a challenging year for the sector, recent listed trading updates and...

Forsyth Barr

Retail Sector - Checking Out Reporting Season

Much of the action for the upcoming retail reporting season came to light during confession season in February. KMD Brands (KMD) reported...

Forsyth Barr

Retail Sector: Santa's Stocking: What's in Store for Christmas?

Retailers are facing a challenging outlook - although consumer spending has been generally robust over the past 12 months, the double-edged sword...

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)