Kathmandu Holdings told investors that it expects a 30 percent drop in adjusted Ebitda for the current financial year, in spite of strong online sales during the recent corona-related retail lockdowns in Australia and double-digit sales increases overall after its stores reopened. While it is still more than half way below a peak reached in February, the company’s share price rose by more than 10 percent as the projected profit was higher than the investors’ estimates.
Total revenues fell by 15.1 percent in the ten months through the end of May. Between May 18 and June 28, however, after some of the group’s stores in Australia and New Zealand were allowed to reopen, sales went up by 12.5 percent for the Kathmandu outdoor brand and by 21 percent at Rip Curl, the Australian surfwear brand recently acquired by the group. On the other hand, Rip Curl’s wholesale business declined by 26.0 percent.
On a comparable store basis, sales at the company’s physical stores rose by 2.2 percent for Kathmandu and by 5.1 percent for Rip Curl during the period, while the two brands’ online sales jumped by 78 percent and 151 percent, respectively, representing more than 20 percent of the turnover.
In April alone, after most of the group’s stores in Australia and New Zealand were closed at the end of March, the group’s sales over the internet were 2.5 to 3 times higher than at the same time last year, with the strongest growth registered in Australia.
The latest business update came shortly before the recent new round of self-confinement measures in Melbourne. The management said it remained cautious about consumer demand in the medium term but noted that the group’s liquidity has been strengthened by an equity increase of 207 million New Zealand dollars (€120.1m-$135.6m) successfully completed in April. Kathmandu should end the current financial year with cash of more than NZ$ 300 million (€174.0m-$196.4m), it predicted.