Kathmandu shares slump after Christmas sales disappoint
Lower-than-expected Christmas sales have forced outdoor retailer Kathmandu to cut its first-half profit guidance for 2019.
Disappointing Christmas and Boxing Day sales have forced Kathmandu to cut its first-half profit guidance for 2019, sending the outdoor retailer’s shares tumbling.
The dual-listed camping and hiking supplier said same store sales for the 22 weeks to December 30 were down 1.0 per cent on the prior year at constant exchange rates, with same-store sales down 0.2 per cent in Australia, and down 2.4 per cent in New Zealand.
Kathmandu told shareholders at its November annual general meeting that solid trading during the first 15 weeks of the fiscal year was expected to lift first-half profit strongly above last year, albeit highly dependent on a successful summer sale.
“Following strong same store sales growth in quarter one, we are disappointed in trading results in Australia and New Zealand over the Christmas and Boxing Day period,” chief executive officer Xavier Simonet said.
“Notwithstanding the adverse impact of the NZD/AUD exchange rate on reported profit, assuming current trends continue, total group profits are now expected to be 4 per cent to 8 per cent above 1H FY2018.”
Partially offsetting the lower than expected sales was a 60 basis point improvement in retail gross margins, to 64 per cent, while the recently acquired Oboz business continues to show strong growth.
Oboz sales for the first half of 2019 are expected to grow by 35 per cent to about $NZ27.5m, with a gross margin of 40 per cent.
Following the announcement, Kathmandu shares fell 14.1 per cent to close at $2.25 on Thursday, down 26 per cent from a near four-year high of $3.03 in October.
Kathmandu’s shares had jumped nearly 17 per cent in November after it reported a 7.1 per cent rise in Australian same store sales, and a 5.2 per cent rise in New Zealand.
Meanwhile, same store sales in Kathmandu’s Australian stores rose 7.5 per cent in FY2018, comfortably offsetting a clearance-driven 2.4 per cent decline in New Zealand and lifting total sales 11.7 per cent to a record $NZ497.4 million. Net profit for the 12 months to July 31 rose 32.8 per cent.
Kathmandu said it will release the full result for the half year on March 26.
AAP
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