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Kathmandu lifts first-half sales 9.1% with wider margins, affirms annual guidance

Monday 1st February 2016

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Kathmandu Holdings, the outdoor equipment chain that fended off a hostile takeover by Briscoe Group last year, lifted first-half profit 9.1 percent, on wider margins, and says it's on track to deliver annual profit of $30.2 million. The shares gained. 



Sales rose to $195.7 million in the 26 weeks ended Jan. 31 from $179.4 million, and gross margins improved by 360 basis points, the Christchurch-based retailer said in a statement. On a constant currency basis, same-store sales were up 3.8 percent. The retailer said first-half profit was between $8.5 million and $9.5 million, and affirmed annual guidance. 



The stock rose 5.9 percent to $1.61, still below the theoretical $1.80 a share implied at the time Briscoe made its offer. 



"Top line sales growth was in line with expectations, but crucially it was profitable growth achieved through an improved gross margin outcome and realising planned cost efficiencies," chief executive Xavier Simonet said. "We expect approximately 55 percent of sales to be made in the second half of the financial year and between 65 percent and 70 percent of earnings." 



In November, Kathmandu said it would refresh its promotions strategy for the Christmas trading period, which underpins the retailer's first-half performance, and to avoid sales fatigue among customers.



The first-half result will be announced in detail on March 22. 




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