Kathmandu shares take a protracted walk
December 22, 2014 Shares in outside equipment retailer Kathmandu have plunged 20 per cent after bad Christmas gross sales pressured the corporate to difficulty a revenue warning. Analysts, meanwhile, are pointing to the plunging Australian greenback and questionable stocking and discounting strategies as that you can think of causes for the corporate’s woes. 12 months-on-yr sales – which had increased with the aid of 18.6 per cent within the yr to November 15 – had declined to 14.1 per cent within the year to December 21, the company mentioned on Monday. This was once because of Christmas sales in reality falling in comparison with remaining 12 months, the corporate mentioned. “same retailer sales and gross margins in the first five weeks of the corporate’s Christmas gross sales merchandising in our largest market, Australia, were under the levels achieved ultimate yr,” stated a observation issued to the Australian Securities alternate. In contrast, “comparable store gross sales in New Zealand and the United Kingdom are at the moment up on the same duration ultimate year, at an identical gross margins yr-on-12 months.” in consequence, “the company will experience a considerable discount within the gross profit earned in the pre-Christmas Day trading period in comparison with the equivalent duration in…2014.” Kathmandu’s acting chief executive, Mark Todd, mentioned that in Australia Kathmandu’s trading performance in Christmas “has been beneath expectations, which is a reflection of negative client self belief and a tricky discretionary retail trading setting”. Mr Todd conceded that salary in Kathmandu’s first-1/2 financial yr – which concludes on January 31, 2015 – “shall be down on the end result executed remaining yr”. overall revenue for the full yr “is still basically dependent on second 1/2-yr buying and selling which in… 2014 contributed over 70 per cent of our whole yr’s revenue,” stated Mr Todd. He used to be downbeat over the company’s possibilities in 2015, announcing that “we anticipate challenging conditions in the Australian market could proceed for a while, and as a outcome, we’re reassessing our sales and pricing technique for the 2d 1/2 of 2015 and beyond.” in September, Kathmandu posted a four.5 per cent decline in annual revenue to $39.29 million as salary have been damage via a hotter start to iciness – a duration when it holds one in every of its greatest annual gross sales. Retail analyst Brian Walker mentioned that the corporate had “developed an extraordinarily robust discounting center of attention” and their product vary used to be nothing special. “as a result of their reasonable gross sales has declined, they have to work a lot more difficult to make the sales they’re making,” he said. “i believe their vary of product is way the same as it all the time has been. I didn’t see them bringing in any nice Christmas/New 12 months range. “i believe it’s the same outdated stuff for Kathmandu in Australia, same old, same old. “The alternate charge hasn’t helped them.” In September, credit Suisse produced analysis exhibiting that Kathmandu was once the 2nd-most inclined firm in Australia to a falling trade fee. it is because the retailer imports various stock. Mr Walker said that Kathmandu were transferring in opposition to the “mass market”, away from being a difficult-core journey retailer. This had uncovered them to robust competition from players like rebellion activity, big W, Lorna Jane and target, as well as their conventional competitors The North Face and Paddy Pallin. “Kathmandu has tried to get just a little more fashion into their combine and that makes them very at risk of rivals,” he stated. They were very a lot a purposeful product, now they’re trying to create this appear, this model. “They’ve gone very aggressively into the market. they’ve got plenty of web sites, numerous overhead, they usually’ve got rising competitors. “Kathmandu have positioned themselves for a mass market appeal and have entered into a long way more competitive waters.” the company’s shares had been down 20 per cent to $2.eleven in afternoon trade on Monday smh.com.au industry news.
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