KMD Brands has recorded record sales in its reporting for the first half of FY23, citing a tourism boom for the group’s success.
The group total sales for the half year ended 31 January 2023 (unaudited) are expected to be approximately NZD $546 million, an increase of 34 percent on last year. KMD Brands owns the Kathmandu, Rip Curl, and Oboz brands. The global outdoor, lifestyle, and sports company started in New Zealand in the late 1980s as outdoor clothing brand Kathmandu and acquired American wilderness footwear brand in 2018, and Australian surf brand Rip Curl in 2019.
Last year KMD Brands reported a 40 percent drop in profit. The group reported a NZD $36.8 million profit in the year to July 31 (FY22), down from NZD $61.3m the previous year. Sales however rose 6.2 percent to a record NZD $979.8m. The company was navigating COVID related issues last year including lockdowns causing in-store trading halts, factory closures in Vietnam, freight delays, and little demand as travel restrictions preventing customers from splashing out on beach and hiking gear. Sales ramped back up in Q4 FY22 and continued into Q1 FY23 with an optimistic 44 percent rise on the year before.
Today’s trading update shows the company has maintained the momentum gained in Q1.
Notably, Kathmandu sales recovery continues, with total sales 51 percent above 1H FY22, reflecting a return of travel and tourist-related spend. Oboz first half sales have rebounded from COVID-related supply constraints last year, growing 124 percent, and Rip Curl total sales have grown 18 percent, with strong growth in direct-to-consumer sales, while maintaining wholesale sales levels following strong growth last year.
According to the reporting, Underlying 1H FY23 EBITDA1 is expected to be approximately NZD $45 million, cycling NZD $10.2m EBITDA in 1H FY22, which included NZD$5.1m of one-off COVID assistance Inventory levels remain elevated, reflecting the decision to temporarily build stock positions to mitigate supply challenges and to support Oboz growth.
The group continues to benefit from a return to travel and international tourism through January, with Kathmandu sales strengthening 52 percent and Rip Curl continuing its growth trajectory at 19 percent for the month. The company notes that this trading has been particularly positive in Australia. In Power Retail’s Trajectory Report #60, we found that the majority of Australians surveyed, at 66 percent, had plans to travel this year so it is likely the demand for KMD Brands will continue to grow as people look to dress for adventures.
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