19 Mar 2024

Kathmandu owner posts near $10m loss

10:39 am on 19 March 2024
Kathmandu Head Office in Christchurch CBD

Photo: RNZ / Nate McKinnon

Outdoor goods retailer KMD Brands posted a near $10 million interim loss, with sales down sharply as consumer sentiment soured.

Key numbers for the six months ended January compared with a year ago:

  • Net loss $9.7m vs $14m profit
  • Sales revenue $468.6m vs $547.9m
  • Gross margin 58.8% vs 58.7%
  • No interim dividend

The owner of Kathmandu, Oboz and Rip Curl brands said sales were down for all its brands, following last year's record result.

"Weaker consumer sentiment, the warmest winter on record in Australia and an over-reliance on winter weight product led to a disappointing first half for Kathmandu," group chief executive Michael Daly said.

"Rip Curl and Oboz are cycling record sales last financial year, and while revenues from the direct-to-consumer channel are showing single digit declines, the wholesale channel has been more challenging for both brands as wholesale customers reduce inventory holdings."

Despite the fall in sales, tighter cost controls and currency headwinds, KMD said its margins held up.

It said at the end of January, the group's net debt was $96.2m, with funding headroom of about $190m.

Looking to the second half of the financial year, KMD said sales trends improved in the first couple of months, with group sales for February down 3.5 percent from last year.

"Improving Kathmandu sales performance is our immediate priority as we approach the key winter trading period," Daly said.

"We expect to see progress in the second half and into FY25 as we launch new innovative products, quick to market programmes, elevated visual merchandising, increased personalisation through the recently released 'Out There Rewards' and an expanded third-party brand strategy."

Kathmandu interim earnings compared with a year ago:

  • Sales revenue $152.3m vs $194m
  • Underlying loss $8.3m vs $12.3m profit
    • Rip Curl interim earnings:

      • Sales revenue $278.3m vs $306.4m
      • Underlying profit $27.4m vs $37.6m

      Oboz interim earnings:

      • Sales revenue $38m vs $47.5m
      • Underlying loss $0.1m vs $2.9m profit