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Kathmandu parent says sales, profit now higher than pre-Covid

(Source: Oboz / Facebook)

Kathmandu parent KMD Brands has reported a record winter promotional period in Australia with second-half gross margins well above last year.

In a trading update KMD Brands said that despite the Omicron outbreak impacting trade in its two core markets Australia and New Zealand – especially during the third quarter to the end of April – overall same-store sales at Kathmandu were up by 7.3 per cent year to date, and of Rip Curl by 2.1 per cent. 

Fourth-quarter profit is on track to be higher than pre-Covid levels, barring any further government restrictions being imposed, said group CEO and MD Michael Daly. 

The company now expects sales for the full year to July 31 to be around $960 million, with underlying EBIT in the range of $53 million to $59 million.

“The year-on-year impact of Covid on first-half EBITDA was approximately $35 million,” said Daly. “Trading conditions have improved in the second half, however, Covid continued to impact footfall, particularly in the third quarter, and caused sporadic store closures due to staff availability.

“Trading in New Zealand was weaker than in Australia reflecting lower growth in consumer footfall and revenues, offset by improved gross margins reflecting the deliberate strategy to carefully moderate the historic “high-low” pricing model,” he said.

Rip Curl continues to trade strongly across both retail and wholesale channels and wholesale demand for its Oboz footwear products remains significantly above pre-Covid levels. Oboz suppliers, impacted by Covid-related factory closures, have resumed full production and inventory levels are returning to normal. 

“Oboz is recovering from the three-month Covid closure of Vietnam factories in the first half, compounded by shipping congestion and international freight delays. Oboz has received approximately 200,000 pairs of footwear in the past two months, as suppliers resumed full production. Additional supply has been secured for future seasons to meet order book demand,” Daly concluded.

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