Kathmandu owner KMD Brands flags earnings slump as warm weather dents puffer jacket sales
Australia's unseasonably warm autumn has dampened sales for Kathmandu owner KMD Brands, warning full-year earnings could fall by as much as $NZ35 million ($32.3m).
KMD, which also owns surfwear brand Ripcurl and footwear label Oboz, expects underlying earnings to be in the range of $NZ15m to $NZ25m, compared with the $NZ50m reported last year.
Kathmandu was the worst performer for the group, with sales slumping 6.4 per cent in the four months to May.
In a trading update to the market on Thursday, the group said unseasonably warm weather in Australia had a material adverse impact on Kathmandu's insulation product category, which includes its puffer jackets.
'While the volatility of Kathmandu's sales performance is frustrating, we acknowledge that unseasonably warm weather in Australia, including Victoria's warmest autumn on record, has negatively impacted sales,' group chief executive Brent Scrimshaw said.
Woolworths boss Amanda Bardwell last month signalled similar trends, saying clothing was particularly challenging for its long-struggling discount department store Big W with a slower start to autumn and winter sales.
But KMD on Thursday said the recent change to cooler weather in both NZ and Australia had reignited sales momentum at Kathmandu, with the first few weeks of June delivering a 13.2 per cent sales growth year-on-year.
School holidays and the start of the ski season offered further opportunities to continue the momentum for the remainder of the financial year, it said.
'Kathmandu's significant sales improvement, including strong online momentum in recent weeks, reinforces our enduring brand health and strengthens our confidence in the future growth opportunity,' Mr Scrimshaw said.
KMD said it continued to monitor the 'fluid US tariff situation' and anticipates a $NZ1m impact on its earnings for the 2025 financial year.
For the 10 months to the end of May, group sales were down 0.5 per cent.
Sales at Oboz were 4 per cent lower, while Rip Curl was the outlier, posting a modest 0.4 per cent growth.
'The group is proactively working on a range of initiatives to unlock future growth opportunities across the portfolio, address short-term market challenges and improve medium to long-term performance and value for shareholders,' Mr Scrimshaw said.
The online channel continues to be a key growth opportunity, with sales up 10.7 per cent in the 10 months to the end of May.
'Kathmandu recently upgraded its online trading platform, with a significant improvement to the consumer journey,' KMD said.
'Since implementation in May, online sales have been 26.1 per cent above last year, with the recent Australian public holiday being the highest online sales day for over two years.'
RBC Capital Markets analyst Wei Weng-Chen said KMD's earnings guidance was 50 per cent below the $NZ39.6m consensus expectations.
KMD shares were down 1.9 per cent to 26¢ just before midday on Thursday. They are off 32 per cent this year so far.
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