After a challenging first half impacted by the effects of the Covid-19 pandemic, KMD Brands experienced rebounding sales in the final two quarters, which included continued Rip Curl growth and the highest-ever Kathmandu sales in the fourth quarter. The group reported a 26 percent decline in Ebit to NZ$53.6 million (€31.9m) for the 12 months ended July 31. Total revenues rose 6.2 percent to NZ$979.8 million (€583.5m), as the annual gross margin held steady at 58.9 percent despite input cost pressures.
Rip Curl annual revenues rose 9.5 percent to NZ$536.8 million (€319.7m), with sales growth across all channels that was bolstered by particular strength in Europe, Hawaii and Southeast Asia. Wholesale revenues gained 16.5 percent and were positively impacted by fewer Covid-related disruptions in the second half. Direct-to-consumer brand sales, consisting of own retail stores and online, rose 3.9 percent. Segment Ebit was down 15.3 percent year-over-year to NZ$43.5 million (€25.9m) from NZ$51.4 million.
At Kathmandu, a strong winter season propped up segment results with Q4 sales and gross margin each higher than the pre-Covid level. KMD said it was “encouraged” by early wholesale orders from select retailers in Europe and Canada. FY Ebit was down 26.0 percent to NZ$18.0 million (€10.7m) from NZ$24.3 million, as total revenues rose 6.8 percent to NZ$381.6 million (€227.3m) from NZ$357.4 million. Direct-to-consumer sales rose 9.1 percent, as revenues derived from online orders increased 24.9 percent. The company said brand momentum “is building from a renewed focus on, and investment in, marketing and product.”
Oboz full-year results, meanwhile, were heavily impacted by a three-month closure of factories in Vietnam and international freight delays that caused 40 percent of FY22 orders to go unfulfilled. Group Ebit fell 78.0 percent to NZ$2.5 million (€1.5m) from NZ$11.3 million. Annual revenues declined 18.2 percent to NZ$61.3 million (€36.5m) from NZ$75.0 million. KMD said Oboz’s current momentum is strong, with forward FY23 orders “supporting a path to (Oboz’s) US$100 million medium-term revenue target.
KMD cites a number of factors that point to overall growth in FY23, including strong wholesale demand for Rip Curl; post-Covid tourism and traffic gains and additional European and Canadian wholesale expansion for Kathmandu; and eased supply chain challenges for Oboz that should allow the company to capitalize on demand. Through August, Ebitda was said to be up NZ$10 million from the prior-year level, with year-over-year group sales said to be 44.2 percent higher than in August 2021.
