Kathmandu Holdings Limited (NZX: KMD) Trading Update

Friday 11th February 2022

Kathmandu Holdings Limited (NZX / ASX: KMD) (“the Group”) is pleased to provide the following update on trading performance for the first half year ended 31 January 2022 (“1H FY22”).

Same store sales grew strongly since the reopening of the Group’s Australasian store network in the second quarter (“Q2 FY22”), despite further travel restrictions and significant disruption from the recent Omicron outbreaks.

Group wholesale sales for 1H FY22 are expected to be 3.4% above last year, with Rip Curl wholesale sales +18.2%, offsetting declines in Oboz. As previously communicated, first quarter factory shutdowns of Oboz product suppliers in Vietnam have materially impacted its ability to meet demand, with approximately 50% of orders unable to be fulfilled. The Company expects a gradual recovery from the transitory supply constraints in the second half. Demand for the Oboz brand and products has never been stronger, and forward orders into FY23 still support the medium-term revenue growth targets.

Group total sales for 1H FY22 (unaudited) are expected to be approximately $405 million, with gross margin below 1H FY21 due to COVID-elevated international freight costs, and increased clearance mix for the Kathmandu brand. Second half gross margins are currently expected to be in line with last year based on current promotional plans, and expectations of international freight costs and currency impacts.

Underlying EBITDA is expected to be in the range of $9 million to $11 million. This is in line with our previous guidance of a $35 million COVID impact on first quarter EBITDA, a result of a combination of lost revenue and lower government support. The first half result includes 11,696 lost trading days due to COVID restrictions, an increase of c. 65% on 1H FY21. Pleasingly Q2 FY22 underlying profitability is higher than Q2 FY21 despite the impacts of Omicron on trading conditions in Australia and supply constraints on Oboz.

The Group continues to invest in the long-term value of its brands, with additional $14 million expenditure in 1H FY22 to support brand marketing and expansion into international markets. Net debt is expected to be approximately $48 million with liquidity of approximately $252 million.

The Group intends to release the full result for the half year on Wednesday 23 March 2022.

Please see the link below for details

Trading Update

Source: Kathmandu Holdings Limited

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