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Outdoor goods retailer KMD Brands, owner of the Kathmandu, Oboz and Rip Curl brands, is riding the wave of rebounding tourism and reporting record first-half sales.
The company's profits for the six months ended January were $14m, compared to a loss of $5.5m a year ago.
Key numbers for the six months ended January compared with a year ago:
- Net profit $14m vs $5.5m loss
- Revenue $547.9m vs $407.3m
- Gross margin 58.7 percent vs 57.7 percent
- Interim dividend 3 cents per share vs 3 cents
KMD Brands chief executive Michael Daly said retail sales at airports in holiday hotspots such as Hawaii, Queensland and New Zealand were all above pre-Covid levels as international tourism rebounded.
He said the company had built on the strong momentum of the previous six months to achieve record sales.
"For the first time since Rip Curl was acquired, the group has experienced a full 12 months of trade without significant interruption from the Covid-19 pandemic, which resulted in group sales of over $1b," he said.
"Despite uncertainties in consumer outlook, all three of our brands - Rip Curl, Kathmandu, and Oboz - delivered strong sales growth in the half, and as a group we have improved our gross margin."
Daly said KMD Brands was "well-diversified" ahead of a potential economic downturn over the next six months, which was typically when the company saw its most sales.
"Product ranges across all three brands appeal to a diverse range of consumer interests, ages and demographics," he said.
"We acknowledge the consumer outlook remains uncertain, with high level inflation and rising interest rates expected to impact consumer demand."
Daly said on the wholesale side, global retailers were strategically restocking and retail competitors had increased promotional activity.
He said the group's three brands were now Certified B Corporations, becoming one of the first multinational companies in Australia and New Zealand to have all of its brands individually certified.
"With a healthy balance sheet, and expectations for strong cash flow generation in the second half, we are in an excellent position to execute on our growth strategy through expanding our global footprint, investing in digital platforms, leveraging operational excellence, and leading the industry through sustainability and innovation."
Strong recovery for Kathmandu brand - Forsyth Barr analyst
Forsyth Barr analyst Margaret Bei said the company's Kathmandu brand recovered strongly across key markets, with same store sales growth (including online) of +49 percent on the prior year.
First-time international sales were at $1.4m, including deliveries to wholesale customers in Europe and Canada.
Bei said KMD Brands' half-year results were in line with previous guidance, but the company was working through higher debt levels which impacted cashflow, driving an increase in interest costs.
"Inventory build was higher than we expected, but management indicated this is expected to unwind materially by July 2023," she said.
February trading has been strong year-on-year but this likely compared against a low period, she said.
The company has indicated it intends to invest in further international expansion of its brands and had provided "medium-term" strategic targets including achieving US$100m sales for Oboz, a retail rollout of 45 stores for KMD and sales of NZ$200m sales for Rip Curl in North America, and NZ$100m for Kathmandu internationally.