Baby Bunting and KMD Brands, owners of Kathmandu and Rip Curl, report cost of living pressures hitting shoppers
Sales of cradles and prams to puffer jackets and wetsuits are being hit by cost of living pressures at Baby Bunting and KMD Brands.
Cost of living pressures combined with weaker consumer confidence is crimping sales, from prams, cradles and baby toys to Kathmandu puffer jackets, hiking boots and surf gear.
The sales hits were revealed in the latest interim results and trading updates from Baby Bunting and KMD Brands.
Infant products retailer Baby Bunting issued its December half result on Tuesday and KMD Brands, which owns outdoor adventurewear chain Kathmandu, Rip Curl and footwear brand Oboz, delivered a trading update — both showed the strains on consumers and triggered a share price slide for both.
A warm winter had also punished KMD Brands as sales of its popular winter gear, such as Kathmandu puffer jackets, were harder to shift.
Baby Bunting posted a slump in store sales, a lower net profit and slashed its interim dividend as softer economic conditions sees its shoppers jump on promotions and discounts and pull back outside of those campaigns.
The infant and baby goods retailer posted a 2.5 per cent fall in half-year sales to $248.5m, with its interim net profit down 1 per cent to $2.7m. Comparable store sales slid 7 per cent. The retailer has slashed its dividend to 1.8c per share, down from 2.7c, payable on 19 March.
“Trading has tended to be softer outside promotional periods with our customers more attracted to key promotional events during the year, such as the Boxing Day promotion, while the Black Friday promotion was our largest ever,” said recently-appointed Baby Bunting chief executive Mark Teperson.
In its trading update the company said since Boxing Day to mid February it has seen total sales fall 1.4 per cent with comparable store sales down 3.2 per cent.
Shares in Baby Bunting slumped 12 per cent on the results to $1.62 and are down 27.5 per cent in the last 12 months.
KMD Brands shares slumped 8 per cent when it released a trading update for the half year to January 31 which showed sharp sales declines across all its divisions.
Rip Curl sales were down 9.2 per cent, Kathmandu sales dropped 21.5 per cent and Oboz sales fell 20 per cent. Total sales for the half were down 14.5 per cent.
KMD Brands chief executive Michael Daly said it had been a “challenging start to the year” as customer sentiment continued to weaken.
“Rip Curl and Oboz are cycling record sales last financial year, and while revenues from the direct-to-consumer channel for these brands are showing single digit declines (down 4.4 per cent), the wholesale channel has been more challenging (down 16.8 per cent) as wholesale accounts reduce inventory holdings.
“A combination of weaker consumer sentiment, the warmest winter on record in Australia and the brand’s reliance on winter weight product has resulted in a disappointing first half. We expect to see signs of improvement in the second half and into fiscal 2025 as we launch new innovative products, quick to market programs.”
KMD Brands expects underlying first half earnings to be in the range of $NZ14m ($A13.16m) to $NZ16m. This is down from earlier guidance of $NZ16m.
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