Kathmandu says first half profit slightly stronger on increased Australian sales

Tuesday 7th February 2017

Kathmandu Holdings said first-half profit was slightly higher from a year earlier, partly bolstered by solid same store sales growth.

The Christchurch-based outdoor equipment chain said net profit was $9.9 million on year in the six months to Jan. 31, versus $9.4 million a year ago. Total sales were about $196.3 million compared to $196 million for the comparative prior period. The same stores sales growth, which is calculated for the 26 weeks to Jan. 27, was up 3.4 percent on a constant currency basis.

"Despite gross margin pressure in the first half from foreign currency, we were able to grow our earnings through healthy same store sales growth in our largest market, rigorous cost control and working capital efficiency," said Kathmandu’s chief executive Xavier Simonet.

In November the company said it was on track to meet the prior year's first half result despite pressure on sales growth. The shares were trading up 2.1 percent at $1.94 after Tuesday's announcement.

Australia continues to generate most of the company's sales with total sales of A$121 million, up 6 percent in Australian dollars and 1.8 percent in New Zealand dollars. Australian same store sales growth was up 5 percent in local currency and 0.8 percent in New Zealand dollars.

Kathmandu's annual profit rebounded in 2016 from a slump a year earlier after a build-up of inventory forced it into aggressive discounting at lower margins to rid itself of excess stock. Under the management of Simonet, who was appointed to the role in January 2015, the company has been taking a more cautious approach to sales and keeping expenses under control.

Kathmandu will release the full result for the first half on March 21.

BusinessDesk.co.nz

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