Strong sales growth from all three of KMD Brands’ brands – Rip Curl, Kathmandu, and Oboz – was offset by weaker results in the year’s final period, which ended July 31. Annual Ebitda rose 11.2 percent to 200.1 New Zealand dollars (€117.1m), but net profit was essentially flat at NZ$36.6 million (€21.4m) against NZ$ 36.8 million. Results did not include a one-time, NZ$4.0 million charge related to a support office and wetsuit factory restructuring effort.
FY revenues improved by 12.6 percent to NZ$1,103.0 million (€645.4m) from NZ$979.8 million as gross margin ticked 20 basis points higher to 59.1 percent due to improved channel mix, wholesale pricing and lower freight costs that helped offset currency headwinds. The group said it continues to work toward an underlying 15 percent Ebitda margin and further gross margin expansion by focusing on numerous initiatives. Besides the restructuring efforts, these include SKU rationalization, ongoing consolidation of suppliers and production efficiencies, and further centralization of corporate shared service functions.
Annual Ebit at Rip Curl declined 9.2 percent to NZ$44.0 million (€25.7m) despite sales growth of 8.3 percent to NZ$581.5 million (€340.2m). Wholesale revenues showed resilience as wetsuit demand fell from record highs, and DTC sales grew by 8.0 percent. The brand launched its first loyalty program, offering customers rewards for everything from making a purchase to logging an afternoon surf.
KMD, which intends to open a minimum of eight stores in H1, reported a 6.4 percent year-over-year decline in August sales but ongoing momentum in DTC sales at both Rip Curl and Oboz. The company’s strategic priorities going forward for its three businesses include continued North American sales growth and omnichannel expansion for Rip Curl, growing international revenues at Kathmandu, and expanding the Oboz brand into Europe.
The group currently generates approximately NZ$100 million (€58.5m) in annual sales in Europe from its three brands, where distribution is presently focused on 24 owned doors, 14 licensed stores, and more than 2,000 wholesale locations. Elsewhere, Australasia accounts for about NZ$700 million (€409.6m) in annual sales, followed by North America (NZ$240 million), Asia (NZ$40 million), and South America (NZ$20 million). KMD operates over 300 stores across the globe.
