KMD Brands, which rebranded itself from Kathmandu Holdings Ltd. earlier this month, reported an Ebit loss of NZ$5.5 million (€6.1m) for the six months ended Jan. 31. Total revenues declined by less than 1 percent to NZ$407.3 (€245.2m) as the gross profit margin slid to 57.7 percent from 59.0 percent on higher international freight costs and more clearance merchandise for the Kathmandu brand. During the period, KMD opened 12 owned/licensed retail stores globally as it witnessed online sales as a percentage of direct-to-consumer rise to 17.4 percent.
With mixed half-year results among its business segments, KMD said its second half will feature a few investments in its brands. Among them: the launch of Kathmandu online sites in Europe and Canada and a merger of Canadian and U.K. fulfillment centers for all brands. Additionally, the New Zealand company intends to launch its Club Rip Curl loyalty program over the next six months and restart its Kathmandu Summit Club initiative.
Rip Curl’s first half sales rose 2.7 percent to NZ$257.8 million (€155.2m), fueled by strong wholesale (+16.1%) and online channel (+14.5%) sales growth. Short-term wetsuit shortages offset strong brand performance in Europe and Hawaii, and port congestion issues in the U.S. Rip Curl returned to a positive same-store sales growth of 3 percent in the second quarter. Meanwhile, Ebitda declined nearly 31 percent to NZ$33.7 million (€20.3m), and the gross margin rate slipped to 59.2 from 59.9 percent due to a higher wholesale mix and elevated international expenses.
At Kathmandu, first half results continued to be impacted by travel restrictions and pandemic-related lockdowns. Bolstered by a 15.4 percent increase in the second quarter, same-store sales (including online) increased 3 percent. Online sales increased 46 percent to account for 21.2 percent of period sales. The Ebitda loss was NZ$18.3 million (€11.0m) as total revenues declined less than 1 percent to NZ$128.3 million (€77.2m). Higher international freight costs combined with more clearance merchandise than typical sent segment gross margin down to 57.9 percent from 63.4 percent in the year-ago period.
KMD’s Oboz continued to face impacts from COVID-related factory closures in Vietnam factories and international freight delays, with their costs averaging more than 300 percent the historical average, the company said. About 50 percent of the first half of 2022 orders could not be filled. The company estimates supply will recover during the second half. Oboz first half revenues slipped 30 percent to NZ$21.2 million (€12.8m) as the segment reported a NZ$400,000 Ebitda loss.
