Kathmandu shares jump on strong sales, Oboz performance

Friday 23rd November 2018

Shares in Kathmandu Holdings jumped 13 percent after the outdoor clothing and equipment retailer said a good performance from its recently acquired US footwear business will deliver a “strong” improvement in first-half earnings.

Montana-based Oboz Footwear delivered sales of $15.7 million in the three months ended October, at a gross margin of 39.8 percent, Kathmandu said in a trading update today.

Oboz remains on track to achieve the US$7.1 million of operating earnings for the 2018 calendar that will trigger an additional earn-out payment, Kathmandu said.

Excluding Oboz, the group’s sales in the 15 weeks to Nov. 11 were 8.4 percent higher on a constant exchange rate basis. Same-store sales rose 6.3 percent.

The firm's shares jumped 13 percent to $2.81, taking their gain this year to 16 percent.

Christchurch-based Kathmandu bought Oboz in April for US$60 million to diversify its product range and expand its geographic spread.

The group got about two-thirds of its sales in Australia in the year through July, with Oboz also contributing $15.9 million to the group total of $497.4 million. The group had 167 Kathmandu stores in Australia, New Zealand and the UK at that date.

The business will pay a further US$15 million if Oboz meets its 2018 earnings target.

Chief executive Xavier Simonet said the company is pleased with the integration of Oboz into the wider group and demand the firm is still seeing for its core Kathmandu products.

“We have achieved good sales growth leading into the key Christmas trading period, and we expect first-half profit to be strongly above last year,” he said in a statement.

“As always, our first half-year result is highly dependent on the success of our summer sale.”

Kathmandu noted that same-store sales in Australia were up 7.1 percent, and were 5.2 percent higher in New Zealand.

(BusinessDesk)

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