Rip Curl with DTC growth, while wholesale dropped for KMD due to cautious pre-season buying

KMD Brands reported a H1 loss of NZ$20.7 million (€11.0m) against a loss of NZ$16.1 million on a 0.5 percent total revenue increase to NZ$470.9 million (€249.8m) for the six months ended Jan. 31. Gross margin fell by 30 basis points to 58.5 percent.

The New Zealand group and parent of Kathmandu, Rip Curl and Oboz said sales trends within all segments continued to improve throughout Q2, including the direct-to-consumer channel that was up by double-digits year-to-date. But the wholesale channel is taking longer to recover due to “cautious” pre-season orders in a challenging market. Nevertheless, forward orders and in-season buying from key accounts indicate an improving wholesale trend through 2025, the company said.

At Kathmandu, the H1 Ebit loss widened by 22 percent to NZ$22.0 million (€11.7m) despite 3.0 percent year-over-year sales growth to NZ$156.8 million (€83.2m). Year-over-year online sales rose by 26.6 percent to NZ$20.8 million (€11.0m) to account for 13.4 percent of the segment’s H1 revenues. Better in-store execution and new products contributed to 3.8 percent H1 sales growth in Australia. In New Zealand, meanwhile, period revenues dipped by 2.0 percent despite strong results during the Christmas trading period.

Focused on enhancing its market leadership in the hike and the adventure travel business, partly through an improved assortment, Kathmandu is adding activewear for the outdoors to its mix. The retailer, which is continuing to face gross margin pressure due to higher promotions in key markets, will launch both a new digital platform and store concept this year.

Elsewhere, at Rip Curl, H1 Ebitda declined by 14.0 percent to NZ$23.6 million (€12.5m) on flat revenues of NZ$278.5 million (€147.7m). H1 DTC sales rose by 4.1 percent, aided by strong growth in Australasia, Europe and South America. Wholesale revenues declined by 7.9 percent due to cautious pre-season buying. But significant changes in North America, including key competitor store closures, may create short-term headwinds to the business now headed by CEO Ashley Reade.

At Oboz, a 6.3 percent drop in H1 revenues to NZ$35.6 million (€18.9m) was impacted by a 10.6 percent decline in pre-season wholesale orders partly offset by improved in-season buying from key accounts. Online sales increased by 32.8 percent year-over-year to NZ$5.0 million (€2.7m). The H1 Ebit loss was NZ$2.6 million (€1.4m) as gross margin sunk by 570 basis points due to the clearance of excess inventory.

The group has 27 owned stores across Europe and ten licensed doors, plus more 2,000 wholesale locations across the continent, where it has generated approximately NZ$100 million (€53.0m) in sales from its three brands.