KMD shares slide after first-half sales drop
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More news: Shares in KMD Brands have slumped nearly 9% to $0.53 in early trading on the ASX after the outdoor apparel retailer flagged a sharp slowdown in first-half sales.
The company estimated a 14.5% decline in sales for its half year ended 31 January, 2024, to NZ$469 million ($441 million), while group gross margins are expected to be down 7% from a year ago.
KMD Brands flags first-half sales drop
The news: Outdoor apparel retailer KMD Brands has flagged a sharp slowdown in sales amid weak consumer sentiment and softer trading.
The numbers: The ASX and NZX-listed company estimated a 14.5% decline in sales for its half year ended 31 January, 2024, to NZD469 million ($441 million).
Sales at its key Kathmandu brand were down 21.5%, while surfing label Ripcurl and footwear brand Oboz saw sales drop 9.2% and 20% respectively.
While first-half group gross margins are expected to be down 7% from a year ago, KMD said underlying earnings for the half year are expected to be in the range of NZD14 million to NZD16 million. It will report first-half results on 19 March.
The context: KMD attributed the sales drop to weaker consumer sentiment, a warm Australian winter, and Rip Curl and Oboz being impacted after record sales last financial year.
It said the wholesale channel had been challenging as traders cut back on inventory, with the trend expected to continue through FY24.
The source: ASX announcement
