Interim results for New Zealand retailers covering the important Christmas period were announced this month and highlighted market conditions remain difficult.

The Warehouse Group, New Zealand’s largest retailer, announced a fairly weak result.  This was unsurprising as the company beds down recent acquisitions and moves from a pure bricks-and-mortar shop front to omni-channel retailing.  The aim of onmi-channel retailing is to provide a seamless approach to customers through all available shopping channels, i.e. bricks-and-mortar,  mobile internet devices, computers, television, radio, direct mail etc.  This change in strategy is yet to generate returns for shareholdings but is one to watch.

Pumpkin Patch delivered another poor result.  The new CEO is yet to prove her experience in generating sales growth and brand rejuvenation.  In addition, the results highlighted a number of issues including high debt levels, stock supply problems and declining sales.

Kathmandu’s result was positive despite being impacted by the high value of the $NZ.  The outdoor sector is proving resilient and Kathmandu is building traction in overseas markets with underlying sales and earnings growth remaining strong.

Expectations were low for Hallenstein Glasson as it had twice downgraded its earnings citing a tough Australian market.  However many investors were pleased with the dividend announcement as it highlights the company’s strong cash balance and indicates management is confident that  retail conditions will improve..

The two best performers this reporting season, Kathmandu and Briscoe Group, have a focus on quality product and have shown that a strong management team can consistently deliver earnings growth, even in a tough retail environment.

Sales and earnings growth for the six months ending January 2014 for NZ Retailers


Sales growth yoy

NPAT growth yoy




Briscoe   Group**



The   Warehouse



Michael   Hill*



Pumpkin   Patch



Hallenstein   Glasson



*reports in AUD

**for the 12 months ending January 2014

Victoria Harris


Disclaimer:  Milford holds Kathmandu, Briscoe Group, The Warehouse and Michael Hill shares on behalf of clients.