New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

Warehouse Group Limited / Equity Bottom-Up

<ul><li>The Warehouse Group's (WHS) 1Q24 trading update highlighted revenue declines across all group brands, with Torpedo7 the worst performer. </li><li>Management's outlook comments highlighted uncertainty leading into the important second quarter trading period, given higher interest rates and cost of living pressures remain significant. </li><li>We downgrade our rating for The Warehouse Group (WHS) from NEUTRAL to UNDERPERFORM due to: (1) a challenging consumer demand environment which shows few signs of turning around in the near term and limited options for revenue growth; (2) continued cost pressures and difficulty controlling costs in the short run driving operating deleverage, with substantial digital project programs underway; and (3) downside risk from continued Torpedo7 losses and additional costs in an exit scenario.</li></ul>

The Warehouse Group's (WHS) 1Q24 trading update highlighted revenue declines across all group brands, with Torpedo7 the worst performer. Management's outlook comments highlighted uncertainty leading into the important second quarter trading period, given higher interest rates and cost of living pressures remain significant. We downgrade our rating for The Warehouse Group (WHS) from NEUTRAL to UNDERPERFORM due to: (1) a challenging consumer demand environment which shows few signs of turning around in the near term and limited options for revenue growth; (2) continued cost pressures and difficulty controlling costs in the short run driving operating deleverage, with substantial digital project programs underway; and (3) downside risk from continued Torpedo7 losses and additional costs in an exit scenario.

The Warehouse Group - 1Q24 Sales Checkout—UNDERPERFORM