Covid-19 lockdowns spoil Kathmandu’s start to winter

Covid restrictions are again taking their toll on retailers, with Kathmandu shutting stores and downgrading sales forecasts.

A generic view of the Kathmandu signage and store in Adelaide, Wednesday, September 18, 2019. The company lifted first-half profit 13.7 per cent to $NZ13.95 million ($A13.55 million) despite disappointing sales over the Christmas period. (AAP Image/David Mariuz) NO ARCHIVING

Recent Covid-19 lockdowns across Australia have hurt Kathmandu, with the outdoor wear retailer downgrading its forecasts for full year sales despite strong early winter trade.

On Tuesday the Christchurch-based group said Australian lockdowns meant 40 of its stores had been closed in NSW for at least two weeks from last Saturday.

Additionally, a further 26 stores in Western Australia will be closed until the Perth and Peel region lockdowns end this weekend.

It comes after Victoria’s recent two-week lockdown forced the temporary closure of 62 stores in the state.

In a statement to the ASX the company – which owns and operates stores under the Kathmandu, Rip Curl and Oboz footwear brands – said it now expected sales for the 2021 financial year to fall short of prior estimates.

“Group total sales for FY21 are expected to be below original expectations at approximately $930 million, and underlying EBITDA is estimated at (about) $120 million,” Kathmandu said.

Zoe Platt at Kathmandu in Chadstone which was impacted by lockdowns in Victoria. Picture: Aaron Francis

“The impact of the New South Wales and recent Victorian lockdowns and associated movement restrictions is estimated to be (about) $13 million on EBITDA.

“Uncertainty remains due to the evolving COVID-19 situation in Australia, and this expectation is subject to change.”

Kathmandu CEO Michael Daly said Covid-19 interrupted what was otherwise a strong start to the winter trading period.

“Covid-19 continues to be a disrupting factor, in particular for Australasia during the key trading period for Kathmandu,” Mr Daly said.

“Excluding these impacts, Kathmandu had a solid start to the winter season, and Rip Curl sales momentum continues.

“Trading conditions in the Northern Hemisphere for both Rip Curl and Oboz are particularly strong across our online, retail and wholesale channels, as our group benefits from a diversified mix of channel and geographies.”

Some investors reacted to the trading update by offloading Kathmandu stock, which has gained almost 40 per cent since last June but is yet to reach its pre-Covid high of $2.47 per share.

Shortly before 1pm on Tuesday Kathmandu shares were trading at $1.42 each, down 3.72 per cent.