Despite a sharp improvement in its internet business, Kiwi outdoor clothing retailer Kathmandu Holdings (KMD) has incurred a first half loss after tax, as forecast by the company a month or so ago.
The one bright spot for the company in the first half of 2014-15 seems to have been its online sales which were up 33% in the half year and now account for 5.8% (or $NZ10.4 million) of the company’s $NZ179 million of sales in the six months.
But the bottom line was a net loss of $NZ1.8 million.
Investors took fright at the weak result (even though it had been well signalled) and the absence of any forecast and sold the shares down by more than 12% to $1.38.
That was despite no real change in gross profit of $NZ106 million against $NZ107 million previously. But much of that profit was illusory because the cost of quitting unsold stocks and a very weak Christmas New year period saw net profit margins collapse.
KMD 1Y – Kathmandu delivers weak result
Acting chief executive Mark Todd said in yesterday’s statement that trading was “soft in Australia, but satisfactory in NZ” and Kathmandu had changed its promotions and would focus on its members for the coming Easter and winter sales.
"We continue to lay the foundations for future growth at Kathmandu," he said. "We remain confident that we can succeed in developing meaningful sales in international markets”.
Earnings before interest and tax slumped $NZ17 million to just $NZ600,000, but despite that weak result it will pay an unchanged three cent a share interim dividend.
It blamed poor results in January, weaker-than-expected sales of promotional products and activewear, wovens and midnight fleece, and a "generally weaker discretionary spend environment in Australia".
Kathmandu’s new CEO Xavier Simonet will start in July.
