KMD Brands has reported a 7.9 per cent increase in sales in the first quarter of this fiscal year, for the trading period ending October 25. 

Sales of the company’s Rip Curl brand increased 6.6 per cent, with Kathmandu sales growing 13.9 per cent. Oboz declined by 1.3 per cent.

On a same-store basis, including online channels over the 14 weeks ended November 2, Rip Curl’s direct-to-consumer sales were up 3 per cent and Kathmandu’s were up 14 per cent.

Gross margin for the quarter was recorded at 55.8 per cent, about 120 basis points lower than the same quarter last year, which the company attributed to the brands’ focus on selling aged inventory and improving its balance sheet position. 

However, the company said its first-quarter margin remained above the second half of the previous financial year. 

“Group sales results for the first quarter are encouraging and have demonstrated some early-stage momentum,” said Brent Scrimshaw, group CEO and MD.

“However, the group’s first half results are dependent on the key Black Friday and Christmas retail trading periods to come. 

“Our focus remains on optimising the balance between sales and gross margin to make way for fresh new season products as we move into the traditionally more significant second quarter trading period.”

KMD Brands confirmed that it was on track to deliver $25 million of annualised savings for this financial year, which aims to reset its cost base and self-fund its ‘Next Level’ strategic growth plan.

In September, KMD Brands reported a $93.6 million loss, but said its online performance was improving.