KMD Brands falls after wider first-half loss
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More news: ASX-listed shares of KMD Brands were down 1.5% to 33 cents in early trading after the dual-listed apparel retailer widened its half-year loss as continued weaker trading in its wholesale business weighed on margins.
It reported a statutory loss of NZ$20.7 million ($18.8 million), while underlying earnings slumped 74% to NZ$3.9 million but were slightly ahead of the guidance flagged in January.
RBC Capital Markets analyst Wei Weng-Chen said the results were generally ahead of consensus, but KMD's expectation for gross margin pressures to continue in the near term in a highly competitive market may disappoint the market.
KMD Brands widens half-year loss in challenging market
The news: Apparel retailer KMD Brands has widened its half-year loss as weaker trading in its wholesale business weighed on margins.
The numbers: The ASX and NZX-listed company reported a statutory loss of NZD20.7 million ($18.8 million) for the six months to 31 January, compared to a NZD9.67 million net loss a year ago.
Group sales were up 0.5% to NZD470.9 million, while underlying earnings slumped 74% to NZD3.9 million but were slightly ahead of the guidance flagged in January. It will not pay any interim dividend.
The context: Sales at its key Kathmandu brand were up 3%, surfing label Rip Curl saw sales steady at 0.1%, while footwear brand Oboz recorded a 6.3% drop. The company said the result was underpinned by an improved trend in the direct-to-consumer channel for all three brands, but wholesale accounts remained cautious on pre-season commitments in a challenging market.
“We are seeing short term gross margin pressure for all brands in a highly competitive global market. However, our focus remains on growing gross margin in the medium term as markets improve,” outgoing CEO Michael Daly said.
For the seven weeks to 16 March, Kathmandu sales were up 5.2% year on year but gross margins were under pressure, the company said. Rip Curl global sales were up 0.7% while gross margins were resilient.
The source: ASX
