NZ's Warehouse sales down 2.8 pct on year ago

WELLINGTON, May 8 (Reuters) - New Zealand's biggest listed retailer the Warehouse Group Ltd (WHS.NZ) said on Friday soft consumer demand had resulted in weaker third-quarter sales, but it expected to match last year's annual profit.

The discount retailer said sales for the three months ended April 26 were NZ$383.5 million, down 2.8 percent on a year ago. Group sales for the year to date were NZ$1.3 billion ($769 million), down 2.9 percent on the same period last year.

"Despite a slower than preferred start to winter we are confident that our strong seasonal offer will support continued positive momentum," said chief executive Ian Morrice.

It said it expected adjusted full-year net profit to be similar to last year's result of NZ$81 million.

The group's 85 "Red Shed" stores had a 1.5 percent fall in sales, although last year included the now-discontinued food and liquor sales.

It said same-store sales, which excludes newly opened shops, during the quarter were 1 percent higher than last year.

The group's 46 store stationery chain had a 10.5 percent fall in quarterly sales, as sales of office equipment fell sharply.

New Zealand retail sales have fallen sharply over the past year as consumers have trimmed spending in the face of a deep recession and rising unemployment.

Shares in the Warehouse, around half owned by founder Steven Tiundall and interests close to him, last traded down three cents or 0.8 percent at NZ$3.72.

The Warehouse has been eyed as a possible takeover target by New Zealand's two main grocery chains, Australian-owned Woolworths (WOW.AX) and local co-operative Foodstuffs, each of which owns around 10 percent.

The Warehouse competes against Briscoes Group Ltd (BGR.NZ), KMart (WES.AX), the privately owned Farmers department stores, and a host of smaller specialist retailers, such as clothing firm Hallenstein Glasson Ltd. (HLG.NZ).

($1=NZ$1.69) (Reporting by Gyles Beckford; Editing by Mark Bendeich)