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The Warehouse Group has downgraded its earnings forecast amid an uncertain economic recovery and slow winter sales. 

But its interim chief executive John Journee is still confident its turnaround plan is making progress. 

The Warehouse Group is now expecting its 2025 full-year earnings before interest and tax for the 53 weeks to August 3, 2025, to be in the range of a $5 million loss and a $5m profit. 

In the business’ 2024 full-year results, it reported ebit of $28.9m, at the higher end of its predicted forecast. 

The Warehouse said it had seen sales growth of 2.2% in the third quarter compared to the same period last year but replicating that in the fourth quarter had been challenging. 

Of particular concern was the performance of its winter products across all categories, including blankets, heaters and apparel. 

The warmer start to this year’s winter season has meant the sales performance in those categories has been underwhelming, forcing The Warehouse Group to lower its margins in order to compete in a highly promotional environment. 

Warehouse Group interim chief executive John Journee still remains confident that the business' turnaround plan is on track. Photo / Supplied 

Journee said sales had finally strengthened when colder weather arrived in June. 

“Now that the cold has set in, our sales momentum has returned, with Q4 to-date sales ahead of the same period last year. While this is encouraging, the current market conditions are impacting margins,” Journee said. 

“We are therefore updating our full-year ebit guidance to reflect these conditions.” 

The wider economy is also having an impact on the business, as discretionary consumer spending continues to remain weak while the timing of New Zealand’s economic recovery remains uncertain. 

Despite this, Journee said he was confident that the business continues to make progress on its turnaround plans. 

“We have strengthened our financial discipline, including prudently managing costs, inventory, working capital and net debt. We continue to streamline operations, update legacy systems and improve customer conversion with new product ranges and better value. 

“We are confident that the steps we are taking will drive a much-needed improvement in performance over time once fully scaled. 

The Warehouse Group will release its 2025 full-year results on October 2. 

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.