Annual results at New Zealand’s KMD Brands, the parent of Rip Curl, Kathmandu and Oboz, were plagued for a second consecutive year by weak consumer sentiment. FY24 sales declined 11.2 percent year-over-year to NZ$979.4 million (€553.6m) for the 12 months ended July 31. After disappointing results at Kathmandu in H1, KMD said sales trends improved in both Q3 and Q4. Nevertheless, the company reported a net loss from continuing operations of NZ$48.3 million (-€27.3m). The annual gross margin fell by 20 basis points to 58.9 percent.
At Rip Curl, annual sales fell by 7.3 percent to NZ$538.9 million (€304.6m), but DTC revenues (-2.8%) outperformed the wholesale channel (-13.0%). Europe, Asia and South America each recorded stronger year-over-year sales. Gross margin increased 50 basis points for the year due to improved pricing and an exit from low-margin business in Europe and North America. Ebitda declined by 25 percent to NZ$42.0 million (€23.4m).
At Kathmandu, faced with a difficult year-over-year comparison, annual sales decreased 14.5 percent to NZ$361.1 million (€204.1m). The segment’s online sales fell nearly 19 percent to NZ$47.7 million, generating 13.3 percent of its DTC sales. Search engine optimization and new payment methods online have improved conversion and the consumer experience, KMD said. Ebitda tumbled almost 70 percent to NZ$16.0 million (€9.0m). The annual Ebitda loss at Oboz, where FY sales sunk by 20 percent year-over-year to NZ$79.4 million (€44.9m), was NZ$0.2 million versus Ebitda of NZ$7.9 million in the prior year. The brand did enjoy a 210-basis-point increase in gross margin on improved channel mix, pricing and new product introductions. Oboz goodwill was impaired by NZ$40.3 million (€22.8m) due to a one-time, non-cash impairment related to the group’s conservative view of near-term US wholesale market conditions.
As for the first eight weeks of FY25, Group CEO and Managing Director Michael Daly said wholesale forward orders moderate to single-digit declines for H1 versus a double-digit drop in FY24. Rip Curl global DTC sales were down by 5 percent year-over-year, while Kathmandu’s gross profit dollars were up 5.1 percent.
The group has 27 owned stores across Europe and ten licensed doors. KMD also has more than 2,000 wholesale locations across the continent where it works with four factories and sources materials in both Italy and France.
