Sales continue to dive for KMD Brands, owner of Kathmandu and Rip Curl

KMD Brands, the owner of Kathmandu, Rip Curl and Oboz, is pinning its hopes on a bounce in sales from the crucial Black Friday and Christmas trading period as sales for all its brands continue to dive. Shares hit record low.

Kathmandu, owned by KMD, is facing sliding sales.

KMD Brands, the owner of Kathmandu, Rip Curl and Oboz chains, is pinning its hopes on a sales rebound through the crucial Black Friday and Christmas trading period as sales for all its brands continue to dive, putting pressure on margins and profits for the first half of 2025.

A trading update from the retailer on Tuesday before its annual general meeting revealed the continued slump in sales across its three brands for the first quarter – although the sales channel of direct to customer looked to have improved since in September it released its trading for the first eight weeks of the quarter.

The wholesale channel was experiencing poorer trading as key clients remained cautious.

Sales for its adventurewear chain Kathmandu were down 2.7 per cent between August 24 and October 24, while sales for Rip Curl fell 6.7 per cent and Oboz’s sales dropped 8.6 per cent. Group sales for the first quarter were down 5.8 per cent.

In September upon the release of its 2024 results, KMD Brands said direct to consumer sales for Kathmandu Australia over the first eight weeks of 2025 were up 2.1 per cent year-on-year and Kathmandu’s gross profit for the first eight weeks were 5.1 per cent above the same time last year. Rip Curl direct to consumer sales were down 5 per cent.

On Tuesday, KMD said its direct to consumer sales results had improved for both Rip Curl and Kathmandu since its last trading update, with Rip Curl sales continuing to outperform the wholesale channel.

Rip Curl global direct to consumer sales for the first quarter were down 3.4 per cent, while Kathmandu quarterly sales trends continued to improve, with Kathmandu Australia first quarter total sales were 4.3 per cent above last year. New Zealand total sales decreased by 15.4 per cent, cycling strong

end of line clearance sales in August last year.

Kathmandu total sales for the first quarter were down 2.7 per cent against last year, while gross profit dollars were up 3.6 per cent above last year.

Kathmandu, famous for its puffer jackets, is facing diving sales amid tougher trading conditions and a pull back in consumer spending. Picture: Mark Brake

KMD said that its wholesale accounts remained cautious on pre-season commitments for Rip Curl and Oboz. Rip Curl wholesale sales decreased by 11.2 per cent for the first quarter, and forward orders indicated improving wholesale trends in the second half.

At its hiking footwear brand Oboz, wholesale sales were down 8.5 per cent below the first quarter of last year.

KMD chief executive Michale Daly said the group’s first half results were dependent on the key Black Friday and Christmas retail trading periods to come.

“We remain cautious on consumer sentiment, given the challenging global macroeconomic environment,” he said.

“We are encouraged that Kathmandu has continued to show an improving sales trend through the first quarter of the new financial year.

“Brand awareness has improved, and we expect the new campaign will have a positive impact on building key long-term brand associations.”

Mr Daly said Kathmandu had increased product newness and innovation for the spring/summer season, resulting in a positive consumer response in key categories.

“Kathmandu will continue to leverage its elevated brand positioning, sustainability credentials, and innovative new products moving forward. We are also encouraged that the Rip Curl direct-to-consumer results are outperforming the wholesale channel. We remain optimistic that wholesale results will start to improve as the wholesale customer inventory reduction cycle ends.”

RBC Capital Markets analyst Wei Weng-Chen said KMD’s first quarter trading update was poor against expectations for the first half, with quarterly sales for all segments now in negative growth on the previous corresponding period and group sales down 5.8 per cent year-on-year.

This compares to consensus expectations for 1.6 per cent growth in the first half.

“Wholesale channels remain difficult, but pleasingly, direct to consumer sales growth in Kathmandu and Rip Curl have shown sequential improvement since the group’s first eight-week trading update. Despite this, Kathmandu gross profit growth has weakened over the quarter, implying gross margin contraction in October.

“Looking forward, management commentary highlighted that first half results will be dependent on Black Friday and Christmas trading, noting they remain cautious on consumer sentiment given the challenging macroeconomic environment.”

Shares in KMD fell 3.85 per cent to a record low of 37.5c on Tuesday.