All three of KMD’s brands – Rip Curl, Kathmandu and Oboz – suffered a year-over-year sales decline in the first half that ended Jan. 31, with their aggregate revenues projected to be down by 14.5 percent to 469 million New Zealand dollars (€267.3m). Amid ongoing weakness in consumer sentiment during the period, all three segments faced difficult year-over-year comparisons.
The group is forecasting H1 Ebitda to be in the NZ$14 to 16 million (€8.0 to 9.1m) range along with a NZ$5 million year-over-year contraction in inventory, a NZ$16 million decline in operating costs despite ongoing inflationary pressures and gross margins remaining a healthy 58.8 percent.
The wholesale channel was the biggest problem area for Rip Curl and Oboz, which suffered -9.2 percent and -20.0 percent sales declines, respectively, for the six months. While the two segments realized a 4.4 percent drop in DTC sales, wholesale sales dipped by 16.8 percent as many accounts worked to reduce their respective inventory levels. KMD expects the wholesale inventory reduction cycle to come to an end before the end of its fiscal year.
Meanwhile, the group’s Kathmandu business faced soft results for the entire six months, impacted by a combination of weaker consumer sentiment, the warmest winter on record in Australia, and the brand’s reliance on winter products. Kathmandu’s H1 sales slipped by 21.5 percent against a comparison of 51.2 percent improvement in H1/23. The brand should begin to see “signs of improvement in H2 and into FY25,” helped by new products and quick-to-market initiatives, elevated visual merchandising, and increased personalization, KMD opined.
The company is slated to formally report H1 results on March 19.
