Sharechat Logo

Daily ShareChat: Kathmandu

By Jenny Ruth

Tuesday 29th March 2011

Text too small?
 Jenny Ruth

Kathmandu Holdings' results beat forecasts in a tough consumer spending environment, say analysts at Goldman Sachs & Partners.

The outdoor clothing retailer's earnings before interest and tax (EBIT) of $19.9 million for the six months ended January, up 28% on the previous first-half, compared with Goldman Sachs' $19 million forecast.

"We remain positive on Kathmandu's long-term earnings-per-share growth prospects," the analysts say.

"This reflects new store roll-outs, the expanded product range, a growing outdoor apparel sector, the strong brand and high-margin vertical business model."

About 95% of sales are Kathmandu-branded products.

"Our forecasts assume no deterioration in consumer spending but we expect trading conditions to remain difficult in the near term (owing to strong competition and a cautious/value-conscious consumer)."

While the first-half result was very strong, the full-year profit depends on successful Easter and Winter sale promotions, the analysts say.

"In the past, the second-half profit has generated over 65% of Kathmandu's full-year EBITDA. However, Kathmandu will be cycling a low base in the second-half of 2011." In the previous first-half, sales fell 5.5% and EBIT was down 1%.

They are forecasting a full-year EBIT of $56.9 million and a net profit of $33.7 million. For the year ending July 2012, they are forecasting a $39.9 million net profit.


Recommendation: Buy.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Kathmandu shares rise to all-time high as analysts upgrade estimates after record annual profit
Kathmandu shares soar as retailer delivers record earnings, upbeat outlook
Kathmandu boosts 2013 profit 27 percent, expects solid performance in 2014
Kathmandu shares gain 2.2 percent as sales momentum remains through third quarter
Kathmandu's Australian stores drive sales growth in first half
Kathmandu lifts 1H profit by as much as 75 percent on Australian sales growth
Kathmandu first-quarter sales rise 19.5 percent
Kathmandu FY profit falls 11% though second-half performance improves
Kathmandu 1H profit plunges on shrinking margins
Kathmandu lifts sales 16% in 15 weeks ended mid-November