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Kathmandu lifts sales, profit in first-half

Kathmandu 2Kathmandu has seen its profits climb 6.4 per cent to NZ$10.0m, with sales up 0.2 per cent to NZ$196.3m in its first half results.

Online sales for the travel and outdoor apparel retailer grew 18 per cent, resulting in online sales reaching 7.4 per cent of total sales.

UK sales declined with the closure of three stores last year.

“It is pleasing to exceed last year’s first-half net profit while absorbing c. $4m of adverse foreign currency impacts in gross margin,” said Xavier Simonet, CEO, Kathmandu.

“We achieved strong same store sales growth in Australia which is our largest market, as we maintained rigorous cost control and continued to drive working capital efficiency.”

Gross margin decreased 1.2 per cent to 61.6 per cent in the half, which Kathmandu said was impacted by a higher proportion of clearance sales year on year.

Total inventory levels decreased by -6.7 per cent (NZ$6.9m) from 1H FY16, and by 3.8 per cent on a stock per store basis at constant exchange rates.

Operating expenses decreased by NZ$1.8m and by 1.0 per cent as a percentage of sales compared to 1H FY16.

“We have worked hard to minimise the impact of currency on our gross margin through sourcing negotiations, product newness, price action, improved stock management and cost control. Maintaining gross margin and operating efficiency will continue to be a key focus,” said Simonet.

“We will continue to deliver great value to our customers through the benefits of our refreshed Summit Club loyalty programme, and by designing innovative, distinctive and sustainable quality products.”

“The Australasian business provides the foundation for our brand to expand internationally. As we look forward past FY17, I am excited about the progress we are making towards securing new international wholesale relationships.”

Kathmandu will pay an interim dividend of NZ 4.0 cents per share to shareholders on June 2.

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