25 Jun 2014

Kathmandu shares plunge

7:33 am on 25 June 2014

Kathmandu shares plunged 15 percent after the listed outdoor clothing and equipment retailer issued an earnings downgrade, as sales were hit by unusually warm weather.

The Australasian company is currently estimating annual earnings before interest and tax will be 10-15 percent below that of the $63.4 million it made in the previous year.

Kathmandu said, like other retailers, sales have declined in the past five weeks due to warmer-than-usual weather, which has reduced demand for items like down jackets and thermals.

July has historically been Kathmandu's third biggest trading month of the year.

Chief executive Peter Halkett said there was still the potential for an improved performance in the remaining five weeks of its financial year if the weather returned to more normal patterns.

Hamilton Hinden Green director Grant Williamson said Kathmandu's downgrade unnerved investors.

He said it was a reflection of how difficult it was to predict consumer trends in the current environment.

Mr Williamson said a significant recovery was unlikely so it was a case of looking to the new financial reporting period to see how they do down the track.

Kathmandu's shares fell 41 cents to close at $3.15 each on Tuesday.