Briscoe Group reports a third consecutive quarter of sales growth with second quarter revenue edging up 0.25% to $193.4 million, while online sales and sporting goods categories drive resilience despite headwinds in homewares.
- Second quarter sales up 0.25% to $193.4 million
- First half sales increase 0.79% to $374.2 million
- Sporting goods sales rise 4.84% in Q2, homewares decline 2.17%
- Online sales grow 2.07%, now 19.6% of total sales
- NPAT guidance of not less than $27 million for first half
Sales Growth Maintained Despite Economic Headwinds
Briscoe Group Limited (NZX:BGP) has recorded its third consecutive quarter of positive sales growth, with second quarter sales nudging up 0.25% to $193.4 million compared to the same period last year. The first half saw a 0.79% lift in group sales to $374.2 million, reflecting a cautious but steady recovery amid challenging economic conditions and subdued consumer confidence.
Sporting Goods Boosted by Major Events; Homewares Lag
The sporting goods division was the standout performer, posting a 4.84% increase in the quarter. This uplift was fuelled by heightened consumer engagement linked to significant sporting events, including the FIFA World Cup, Auckland FC's A-League victory, the Warriors’ strong NRL season, and the All Blacks’ home successes in the Nations Championship. Conversely, homewares sales fell 2.17%, weighed down by weaker demand for heating products due to a milder winter, softer luggage sales amid geopolitical tensions affecting travel, and broader discretionary spending pressures.
Online Channel Continues Steady Expansion
Briscoe’s online sales grew 2.07% in the first half, adding approximately $1.5 million and now comprising 19.60% of total group sales, up slightly from 19.36% last year. This steady digital growth underscores the company’s ongoing investment in e-commerce capabilities and customer engagement, including the launch of a revamped Rebel Sport Club loyalty program aimed at boosting purchase frequency and transaction size through enhanced personalisation and rewards.
Margin Recovery and Cost Pressures
Gross profit margins showed signs of improvement, with a projected decline of around 57 basis points compared to a 115 basis point drop in the previous full year. This progress comes despite a weaker New Zealand dollar eroding margins by an estimated 30 basis points and ongoing geopolitical tensions adding to cost pressures. The company attributes margin gains to initiatives rolled out over the past 18 months, although it cautions that retail remains highly promotional and price sensitive.
Investments Impact Profit but Set Up Future Efficiency
Briscoe incurred additional operating costs of about $1.8 million related to its new distribution centre and $0.9 million in one-off expenses for the SAP S/4HANA implementation during the half. These were partly offset by a $2 million net lease accounting benefit from early surrender of the previous distribution centre lease. Management emphasised these expenditures as strategic investments to enhance inventory management, productivity, and service levels. The new distribution centre is now operational, with full automation expected to be commissioned and optimised by the end of the financial year, promising more substantial efficiency gains next year.
Profit Guidance and Strategic Confidence
Despite the headwinds, Briscoe projects a net profit after tax for the first half of not less than $27 million, subject to final closing processes. Group Managing Director Rod Duke highlighted the resilience of sales and the company’s confidence in its strategic direction, financial position, and long-term growth prospects. The full half-year results, including an interim dividend declaration, are scheduled for release on 16 September 2026.
Bottom Line?
Briscoe’s modest sales growth masks a complex balancing act between investing in future capabilities and navigating cost pressures, setting the stage for potential margin improvements once new infrastructure and systems are fully operational.
Questions in the middle?
- How will the full commissioning of the new distribution centre’s automation affect margins and operating costs next year?
- Can Briscoe sustain sporting goods momentum if major sporting events become less frequent or impactful?
- Will the upgraded Rebel Sport Club loyalty program translate into measurable increases in customer retention and spend?