Kathmandu net profit lifts on Oboz sales

By

Benjamin Fitzgerald

Published
Mar 26, 2019

Outdoorwear brand Kathmandu said on Wednesday that net profit for the first-half fiscal 2019 increased by more than 13% on the back of growth in its recently acquired footwear brand Oboz, which offset soft Christmas season sales.

The New Zealand-headquartered Kathmandu said net profit for the six months ending January 31 increased 13.7% to to $NZ13.95 million ($US9.64 million), from $NZ12.28 million a year ago.

The first-half period saw a 13.3 per cent increase in sales revenue to $232 million, with sales up by 2.7% in Australia, the company's largest market. New Zealand sales were 1.9% below last year.

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Following strong same-store sales growth at the start of the financial year, Kathmandu said it experienced softer trading conditions in Australia and New Zealand over the Christmas and Boxing Day period. 

For the six months, Kathmandu comparable store sales were flat, following a 1.2% rise in Australia which offset a 2.2% fall in domestic sales - while pro forma sales from the Oboz shoe brand acquired last year jumped 38.6%.

Online sales accounted for 9.5% of direct-to-consumer sales over the last 12 months, it added.

“Kathmandu is on a journey of transformation," said ​Kathmandu Chief Executive, Xavier Simonet. "While we are focused on driving growth for our core Kathmandu business in Australia and New Zealand, we are also step by step diversifying our channels, brand and markets, particularly through Oboz which has delivered strong growth."

Retail gross margin increased 0.8% points from 63.4% in the first-half of 2018, to 64.2% in 2019. The gross margin increase resulted from less promotional discounting, leading to higher average selling prices.

"Despite sales being below expectation, it was pleasing to see an improvement in retail gross margin," added Simonet.

"We remain focused on achieving sales and profit growth in our core Australasian business to fund investment for future growth. Our full year result is still very dependent on the key promotions to come, in which we will be cycling a successful second half last year," the CEO concluded.