Kathmandu swings to first-half of loss

Kathmandu shares fell 12 per cent after the sluggish sales figures have been launched. photograph: Glenn Hunt

Activewear retailer Kathmandu says consumer confidence in Australia and New Zealand has swapped locations in the past yr or so, as it raised the chance that its weak efficiency in Australia is structural somewhat than cyclical.

whereas the results had been in step with last month’s downgrade, Kathmandu shares have been smashed on Tuesday after telling buyers there had been a 2 per cent fall in related-store sales within the first seven weeks of the new half of, including a “delicate” start to its Easter gross sales in Australia.

the brand new Zealand-based totally firm also said it planned to decelerate the % of Australian retailer openings, telling analysts it wasn’t “confident at this stage that the sales performance in Australia is necessarily simply cyclical”.

“We wish to be confident that Australian gross sales efficiency begins to come back, and after we see that coming back, then we might be taking a look at retailer openings in keeping with that,” appearing chief executive Mark Todd mentioned.

“In that regard, only buying and selling in the subsequent three to 6 months tells us that.”

Kathmandu said it could introduce much less dramatic discounting in favour of more desirable perks for its 1.2 million loyalty club participants, who contain about two-thirds of its industry. the corporate can even reduce its product range in Australia and make stronger the performance of its newer outlets in local procuring centres.

“it is obviously tough going,” one analyst stated. “It faces moderately a problem to address its pricing version, which doesn’t appear to be working.”

For the six months to January 31, Australian revenue ahead of interest, tax, amortisation and depreciation slumped eighty five per cent to $NZ1.7 million. Over the same duration, comparable-store sales growth in Australia fell to zero.9 per cent, in comparison with 6.6 per cent growth the previous corresponding length.

Mr Todd said the primary-half outcomes – a lack of $NZ1.8 million, as a result of weaker-than-anticipated gross sales, decrease margins and better prices – had been “disappointing and beneath expectations”.

He said the corporate would now not be adjusting its methods if weakness endured. “now we have to take a medium and longer-term view,” he told Fairfax Media. Kathmandu’s new CEO, Xavier Simonet, will start in July.

evaluating shopper sentiment in Australia and New Zealand, Mr Todd mentioned: “in the final 12 to 18 months, it is indisputably became round. you can say that 18 months in the past New Zealand consumers have been a little more cautious, but they may be indubitably extra confident than Australia at this cut-off date.”

He said the “normal financial and political uncertainty in Australia has not been helpful for sentiment”.

but he stated Australia would remain Kathmandu’s No. 1 market for a while, despite its aggressive push into Britain. 

Kathmandu shares closed down 12 per cent to $1.38 in a flat market, taking its year to date fall to 31.5 per cent. it is going to pay a 3¢ dividend on June 5.