Kathmandu lifts profit despite disappointing sales

Adventure retailer Kathmandu lifted first-half profit 13.7pc to $13.55m despite disappointing sales over Christmas.

A customer in a Kathmandu store in Brisbane. Pic: AAP

Kathmandu lifted first-half profit 13.7 per cent to $NZ13.95 million ($13.55m) despite disappointing sales over the Christmas period. The outdoor clothing and equipment retailer (KMD) said Tuesday that profit for the six months to January 31 rose from $NZ12.28m a year ago, driven by a 13.3 per cent increase in sales revenue to $NZ232m.

The result comfortably beat Kathmandu’s downgraded guidance of a maximum eight per cent increase in profit, a January warning that caused a near 15 per cent one-day fall in the company’s share price.

Chief executive Xavier Simonet said he was pleased to see Kathmandu stores’ retail gross margin improve despite lower-than-expected sales, although the dual-listed retailer flagged a second-half margin dip with promotions planned in Australia and New Zealand.

“We remain focused on achieving sales and profit growth in our core Australasian business to fund investment for future growth,” Mr Simonet said. “Our full-year result is still very dependent on the key promotions to come, in which we will be cycling a successful second half last year.” Kathmandu same store sales were flat - a 1.2 per cent rise in Australia offsetting a 2.2 per cent fall in New Zealand - while pro forma sales from the Oboz shoe brand acquired last year jumped 38.6 per cent.

The dual-listed retailer declared an interim dividend of 4 cents.

The retailer’s shares tumbled in January after it cut its profit guidance following disappointing Christmas and Boxing Day sales.

At 2pm (AEDT), Kathmandu’s shares were down 3.85 per cent at $2.25.

AAP