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Kathmandu Warns of Potential Profit Slip as States Enter Lockdown
Kathmandu is forecasting a cut in its profits as lockdown measures affect almost every state in Australia.
The retailer shared a trading update this morning with a forecast that its profits may be lower than the $930 million it predicted for FY21, with an underlying EBITDA of an estimated $120 million.
The retailer has cited the lockdowns in NSW and the recent restrictions in Victoria as the reason for this, estimating it to be $13 million on EBITDA. In NSW, 40 stores will be closed for a minimum of two weeks, and a further 26 will close for a minimum of four days from Tuesday, 29 June. Victorians have just come out of a two-week lockdown, which affected 62 stores earlier in June.
Despite this setback, the retailer has recorded strong sales for the new season. “Kathmandu brand had a positive start to winter, with trading broadly in line with pre-COVID-19 levels before Australian lockdowns began to impact the key winter trading period,” the company shared.
The retailer has also shared that its online sales are currently strong, with Rip Curl and Oboz trading strongly in the key regions of North America and Europe. The Northern Hemisphere is currently experiencing summer, and despite COVID-19 related concerns, D2C sales remain ‘well- above’ the pre-COVID levels. Wholesale orders also showed continued increases, with double-digit growth for FY22. Oboz is reporting a ‘record’ sales performance for the second half of FY21, and its wholesale orders for FY22 are well above those in FY19 and FY20.
“COVID-19 continues to be a disrupting factor, in particular for Australasia during the key trading period for Kathmandu,” shared Michael Daly, the CEO of Kathmandu. “Excluding these impacts, Kathmandu had a solid start to the winter season, and Rip Curl sales momentum continues. Trading conditions in the Northern Hemisphere for both Rip Curl and Oboz are particularly strong across our online, retail and wholesale channels, as our Group benefits from a diversified mix of channel and geographies.”