Kathmandu flags record profit on back of strong second-half sales

Kathmandu shares soared after the retailer confirmed it’s on track for a record full-year profit.

Kathmandu CEO Xavier Simonet said he was especially pleased with second-half in Australia as it was coming off an already strong base. David Geraghty/The Australian

Shares in outdoor adventurewear retailer Kathmandu soared almost 15 per cent after it confirmed it was heading for a record profit for fiscal 2019, forecasting growth on the back of last year’s already very strong winter sales period and difficult trading conditions in New Zealand.

The retailer (KMD) has also benefited from continued solid trading from its newly acquired North American footwear group Oboz.

Shares in Kathmandu rose 14.3 per cent to $2.32.

In a trading update to the market this morning, the company said, based on unaudited results for 2019, it expects total sales of NZ$545 million ($520m), up 9.6 per cent on fiscal 2018 and same store sales growth of 0.6 per cent at constant exchange rates.

Australia same store sales were up 2.7 per cent. New Zealand same store sales fell 3.9 per cent.

Kathmandu is expecting normalised EBIT of between NZ$82.5m and NZ$84.0m, up from NZ$74.6m in 2018 and normalised profit of between NZ$55.5m and NZ$57.0m, against NZ$50.5m in 2018.

Kathmandu CEO Xavier Simonet said: “We were particularly pleased with the second half performance in Australia given we were cycling strong growth in our key winter period last year. New Zealand conditions were challenging.

“Oboz, acquired in April 2018, continued to deliver strong sales and EBIT growth in the second half with continued progress anticipated in fiscal 2020 and beyond.”

Kathmandu plans to release its audited results for 2019 in late September.