The Warehouse Group is forecasting a lower profit in the first half of its current financial year despite strong Christmas trading.
The group expects net profit after tax for the six months to the end of January to be in the $46 million - $48 million range. In the same period last year it made $52.9 million.
The expected drop is largely due to squeezed margins in the first quarter, particularly at its Red Shed stores.
The Warehouse Group chief executive Mark Powell says while same store sales at the Red Sheds are expected to be up 4 percent for the first half, this won't be enough to offset the problems in the first three months.
Shares in The Warehouse Group closed down 10 cents to $3.62 on Thursday.
