WHS HY26 Jan 2026 Financial Statements

For and on behalf of the Board

26 March 2026

For the 26 weeks ended 1 February 2026 $ 000

$ 000

1. GENERAL INFORMATION

   The Warehouse Group Limited (the Company) and its subsidiaries (together the Group) trade in the New Zealand retail sector. The Company is a limited liability company incorporated and domiciled in New Zealand. The Group is registered under the Companies Act 1993 and is an FMC Reporting Entity under Part 7 of the Financial Markets Conduct Act (FMCA) 2013. The address of its registered office is 26 The Warehouse Way, Northcote, Auckland. The Company is listed on the New Zealand Stock Exchange (NZX).

2. SUMMARY OF MATERIAL ACCOUNTING POLICIES

   The interim financial statements of the Group have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (GAAP). They comply with New Zealand Equivalent to the International Accounting Standard 34 Interim Financial Reporting (NZ IAS 34) and International Accounting Standard 34 Interim Financial Reporting (IAS 34) and consequently, do not include all the information required for full financial statements. These Group interim financial statements should be read in conjunction with the annual report for the 5 3 weeks ended 3 August 2025.

   These interim financial statements have been prepared under the historical cost convention except for the revaluation of cert ain financial instruments (including derivative instruments). The reporting currency used in the preparation of the interim financial state ments is New Zealand dollars, rounded to the nearest thousands unless otherwise stated.

   Accounting standards

   The material accounting policy information and other explanatory information applied in the preparation of these interim financial statements have been applied on a consistent basis with those used in the audited financial statements for the 53 weeks ended 3 August 2025.

   There were no new accounting standards, amended standards or interpretations that became effective during the reporting perio d that have had a

   material impact on the Group's interim financial statements.

   Non-GAAP financial information

   The Group uses operating profit, earnings before tax and interest, unusual items and adjusted net profit to describe financia l performance as it considers these line items provide a better measure of underlying business performance. These non -GAAP measures are not prepared in accordance with New Zealand Equivalent to International Financial Reporting Standards (NZ IFRS) and may not be comparable to similarly titled amounts reported by other companies. The Group's policy regarding unusual items and adjusted net profit are detailed in note 4.

   Critical accounting judgements, estimates and assumptions

   The preparation of the interim financial statements requires the Group to make judgements, estimates and assumptions that aff ect the reported amounts of assets and liabilities at balance date and the reported amounts of revenues and expenses during the half year. The same material judgements, estimates and assumptions that are summarised in the audited financial statements for the 53 weeks ended 3 August 2025 were again applied in the preparation of these interim financial statements.

   Subsequent Events

   Since 28 February 2026, when the US and Israel launched missile strikes on Iran, the resulting conflict has spread across the Middle East, creating economic uncertainty for New Zealanders and the Group. Rising fuel prices and congestion across key shipping routes impacted by the conflict are expected to push global freight costs higher. While the full impact on supply chain costs, consumer confidence and inflation remains uncertain, management is monitoring conditions and working with the Group's stakeholders to mitigate these pressures.

   Given the evolving nature of the situation, the financial impact on the Group cannot be reliably estimated at this time. This event has been treated as a non-adjusting subsequent event and, accordingly, no amounts have been recognised in these financial statements.

   Approval of interim financial statements

   These consolidated interim financial statements were approved for issue by the Board of Directors on 26 March 2026. Unless as otherwise stated, the interim financial statements have been reviewed by our Auditors, but are not audited.

3. SEGMENT INFORMATION REVENUE OPERATING PROFIT

   Operating performance	Note	(Unaudited) 26 Weeks Ended 1 February 2026	(Unaudited) 26 Weeks Ended 26 January 2025	(Audited) 53 Weeks Ended 3 August 2025	(Unaudited) 26 Weeks Ended 1 February 2026	(Unaudited) 26 Weeks Ended 26 January 2025	(Audited) 53 Weeks Ended 3 August 2025
   The Warehouse Warehouse Stationery		$ 000	$ 000	$ 000	$ 000	$ 000	$ 000
   		949,469 116,090	944,743 109,848	1,816,475 226,036	9,107 8,109	12,490 2,364	(12,247) 8,217
   Warehouse		1,065,559	1,054,591	2,042,511	17,216	14,854	(4,030)
   Noel Leeming		542,241	548,943	1,038,058	12,944	8,516	11,667
   Other Group operations		6,952	6,565	11,578	(3,272)	(3,837)	(6,326)
   Inter-segment eliminations		(2,665)	(2,892)	(5,422)
   Group		1,612,087	1,607,207	3,086,725	26,888	19,533	1,311
   Adjustment for NZ IFRS 16 (Leases)					20,105	19,333	39,205
   Operating profit					46,993	38,866	40,516
   Unusual items	4				(4,792)	-	-
   Earnings before interest and tax					42,201	38,866	40,516
   Operating margin
   The Warehouse (%)					1.0	1.3	(0.7)
   Warehouse Stationery (%)					7.0	2.2	3.6
   Noel Leeming (%)					2.4	1.6	1.1
   Total Retail Group (%)					1.7	1.2	0.0

   Operating segments

   The Group has three retail brands trading in the New Zealand retail sector. These brands form the basis of internal reporting used by senior management and the Board of Directors to monitor and assess performance and assist with strategy decisions. Brand trading per formance is assessed using operating profit, which is a non-GAAP measure that excludes the impacts of NZ IFRS 16 Leases, and is considered a better measure of underlying brand performance. Assets are not allocated to operating segments and the balance sheet is managed and internal ly reported on a consolidated basis to the senior management and the Board of Directors.

   Customers can purchase product from the three main retail chains either online or through the Group's physical retail store n etwork. At period end the Group's physical store network consists of 84 The Warehouse stores, 67 Warehouse Stationery stores (including 42 stores tradi ng within The Warehouse stores), and 66 Noel Leeming stores. The Warehouse predominantly sells general merchandise and apparel, Noel Leemin g sells technology and appliance products and Warehouse Stationery sells stationery products.

   Other Group operations include a property company, a chocolate factory and the residual cost of unallocated support office fu nctions.

   Adjustment for NZ IFRS 16 (Leases)	Note	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   		$ 000	$ 000	$ 000
   Pre NZ IFRS 16 rent expense		66,269	65,139	132,538
   Right of use asset depreciation		(46,176)	(45,806)	(93,333)
   Gain on lease terminations		12	-	-
   Impact on operating profit		20,105	19,333	39,205
   Lease liability interest	12	(18,339)	(17,858)	(36,847)
   Impact on profit/(loss) before tax	4	1,766	1,475	2,358

4. ADJUSTED NET PROFIT

   Adjusted net profit reconciliation	Note	(Unaudited) 26 Weeks Ended 1 February 2026	(Unaudited) 26 Weeks Ended 26 January 2025	(Audited) 53 Weeks Ended 3 August 2025
   		$ 000	$ 000	$ 000
   Net profit/(loss) attributable to shareholders of the parent		15,747	11,791	(2,764)
   Add back:
   Unusal item - Restructure costs		4,792	-	-
   Adjustment for NZ IFRS 16 (Leases)	3	(1,766)	(1,475)	(2,358)
   Income tax relating to above items		(847)	413	660
   Adjusted net profit/(loss) attributable to shareholders of the parent		17,926	10,729	(4,462)

   Certain transactions can make the comparison of profits between years difficult. The Group uses adjusted net profit as a key indicator of performance and considers it a better measure of underlying business performance. Adjusted net profit makes allowance for the after tax effect of unusual items which are not directly connected with the Group's normal trading activities. The Group defines unusual items as any gains or losses from property disposals, goodwill and brand impairment, costs relating to business acquisitions or disposals, ineffective hedge derivatives and costs connected with restructuring the Group. The non-cash impact relating to the NZ IFRS 16 lease accounting standard are also excluded from adjusted net profit.

In November 2025, the Group initiated a cost reset programme to restore profitability and reduce its cost of doing business. As part of the move towards a leaner corporate structure the Group partnered with Tata Consulting Services to co-source corporate and administrative functions, including technology, accounting, call centres, and payroll. The restructure results in redundancy costs ($4.8 million) for the head office employes who leave the business.

1. INVENTORY

   Inventory	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   	$ 000	$ 000	$ 000
   Finished goods	464,170	501,213	412,409
   Inventory provisions	(16,438)	(15,985)	(15,210)
   Retail stock	447,732	485,228	397,199
   Goods in transit from overseas	72,561	48,064	79,519
   Inventory	520,293	533,292	476,718

2. TRADE AND OTHER RECEIVABLES

   Trade and other receivables	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   	$ 000	$ 000	$ 000
   Trade receivables	38,250	39,114	29,512
   Prepayments	46,077	50,695	39,760
   Rebate accruals and other debtors	25,067	28,540	22,687
   Total trade and other receivables	109,394	118,349	91,959
   Less non current prepayments	(19,757)	(24,348)	(22,088)
   Current trade and other receivables	89,637	94,001	69,871

3. TRADE AND OTHER PAYABLES

   Trade and other payables	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   	$ 000	$ 000	$ 000
   Local trade creditors and accruals	211,798	347,226	225,542
   Foreign currency trade creditors	93,299	119,154	75,223
   Goods in transit creditors	38,400	21,026	35,236
   Goods and services tax	25,572	55,939	17,404
   Reward schemes and gift vouchers	13,834	15,905	13,589
   Payroll accruals	9,157	17,755	9,764
   Total trade and other payables	392,060	577,005	376,758

   The payment of local creditors and GST typically occur towards the end of a calendar month. In the previous half year the balance date was one week earlier relative to the calendar month end, which means the payment of local creditors and GST which occurred in this period had not yet happened. This contributed to why total trade and other payables were significantly lower than the previous half year.

4. PROVISIONS

   Provisions	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   	$ 000	$ 000	$ 000
   Current liabilities	44,051	39,924	42,926
   Non current liabilities	19,785	20,326	20,810
   Total provisions	63,836	60,250	63,736
   Provisions consist of:
   Employee entitlements	52,263	48,688	52,526
   Make good provision	7,417	7,600	7,495
   Sales returns provision	4,156	3,962	3,715
   Total provisions	63,836	60,250	63,736

5. PROPERTY, PLANT, EQUIPMENT AND COMPUTER SOFTWARE

   Property, plant, equipment and computer software	Note	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   		$ 000	$ 000	$ 000
   Property, plant and equipment		142,820	168,631	155,078
   Computer software	10	56,879	77,269	67,134
   Carrying amount		199,699	245,900	222,212
   Movement in property, plant, equipment and computer software
   Carrying amount at the beginning of the period		222,212	273,364	273,364
   Capital expenditure		5,784	3,851	12,387
   Depreciation and amortisation		(28,091)	(31,235)	(63,191)
   Disposals		(206)	(80)	(348)
   Carrying amount at the end of the period		199,699	245,900	222,212

6. INTANGIBLE ASSETS

   Intangible assets	Note	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   		$ 000	$ 000	$ 000
   Computer software	9	56,879	77,269	67,134
   Brands		15,500	15,500	15,500
   Goodwill		57,456	57,456	57,456
   Net book value		129,835	150,225	140,090

   The Group performs a detailed impairment assessment of intangible assets prior to the end of each financial year and at each interim reporting date considers if there are any indicators of impairment which could have a bearing on the impairment assessments. The Group's rev iew did not identify any impairment in respect of the cash generating units connected with the Group's material intangible assets.

7. RIGHT OF USE ASSETS

   Right of use assets	Note	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   		$ 000	$ 000	$ 000
   Movement in right of use assets
   Carrying amount at the beginning of the period		590,187	601,610	601,610
   Foreign exchange movement		56	14	22
   Additions	12	29,863	19,613	54,621
   Depreciation	3	(46,176)	(45,806)	(93,333)
   Reassessment of lease terms	12	11,602	8,002	27,267
   Lease surrenders and terminations		(256)	-	-
   Carrying amount at the end of the period		585,276	583,433	590,187

8. LEASE LIABILITIES

   Lease liabilities	Note	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   		$ 000	$ 000	$ 000
   Movement in lease liabilities
   Carrying amount at the beginning of the period		713,839	736,812	736,812
   Foreign exchange movement		56	14	21
   Additions	11	29,863	19,613	54,621
   Interest for the period	3	18,339	17,858	36,847
   Reassessment of lease terms	11	11,602	8,002	27,267
   Lease repayments		(64,570)	(65,663)	(141,729)
   Lease surrenders and terminations		(268)	-	-
   Balance at the end of the period		708,861	716,636	713,839
   Lease liability maturity analysis
   Within one year		89,505	94,470	92,522
   One to two years		95,278	91,072	92,244
   Two to five years		274,544	247,150	258,716
   Beyond five years		249,534	283,944	270,357
   Total lease liabilities		708,861	716,636	713,839
   Current liabilities		89,505	94,470	92,522
   Non current liabilities		619,356	622,166	621,317
   Total lease liabilities		708,861	716,636	713,839

9. BORROWINGS

   Net cash/(debt)	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
   	$ 000	$ 000	$ 000
   Cash and cash equivalents	43,264	44,322	39,206
   Borrowings	(136,570)	(25,350)	(135,300)
   Net cash/(debt)	(93,306)	18,972	(96,094)
   Committed bank credit facilities at balance date are:
   Committed bank debt facilities	300,000	450,000	450,000
   Liquidity buffer	206,694	468,972	353,906

   Borrowings for the current half year are significantly higher than the previous half year because of the timing of the balance date relative to the calendar month end. The payment of local creditors and GST typically occur towards the end of a calendar month (refer note 7). In the previous half year the balance date was one week earlier relative to the calendar month end, which means the payment of local creditors and GST which occurred in this period had not yet happened. Average daily borrowings for the current half year period were $79.5 million compared to $131.5 million for the previous half year period.

   The Group complied with the debt ratios and covenants stipulated in the Group's negative pledge arrangement with its banks throughout the half

   year. Details regarding these covenants and the Group's liquidity policy, can be found in the 2025 Annual Report.

10. DERIVATIVE FINANCIAL INSTRUMENTS

    Derivative financial instruments	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
    	$ 000	$ 000	$ 000
    Foreign exchange contracts
    Current assets	211	16,610	3,908
    Current liabilities	(10,436)	(1,133)	(3,768)
    Non current liabilities	(37)	-	-
    Total derivative financial instruments	(10,262)	15,477	140
    Classified as:
    Cash flow hedges	(7,418)	9,079	(1,467)
    Fair value hedges	(2,844)	6,398	1,607
    Total derivative financial instruments	(10,262)	15,477	140

    The Group continues to manage its foreign exchange risks in accordance with the policies and parameters detailed in the 2025 Annual Report. The following table lists the key inputs used to determine the fair value of the Group's foreign exchange contracts and hedge lev els at balance date.

    US Dollar forward contracts
    Notional amount (NZ$000) 0 to 12 months	360,390	351,761	320,354
    Notional amount (NZ$000) 13 to 18 months	24,675	-	-
    Average contract rate ($)	0.5903	0.5988	0.5921
    Spot rate used to determine fair value ($)	0.6033	0.5715	0.5894
    Forecast next twelve month USD hedge level (percentage)	72.2	65.8	63.2

    Fair value

    The Group's derivatives are not traded in an active market which means quoted prices are not available to determine the fair value. To determine the fair value the Group uses valuation techniques which rely on observable market data. The fair value of forward exchange contracts are determined using the forward exchange market rates at the balance date. For accounting purposes (NZ IFRS 13) th ese valuations are deemed to be Level 2 fair value measurements as they are not derived from a quoted price in an active market b ut rather, a valuation technique that relies on other observable market data.

11. COMMITMENTS

    Commitments	(Unaudited) As at 1 February 2026	(Unaudited) As at 26 January 2025	(Audited) As at 3 August 2025
    Capital commitments	$ 000	$ 000	$ 000
    Capital expenditure contracted for at balance date but not recognised as liabilities is
    set out below:
    Within one year	1,922	412	1,957

12. RELATED PARTIES

Except for directors' fees and key executive remuneration, there have been no other related party transactions during the per iod.