Kathmandu reveals 42% profit decrease
New Zealand outdoor retailer Kathmandu has revealed a 42% slump in profit. Its shares, which have shed 38% since November, fell 14%, to close at $1.62 on the NZX last night – erasing much of the gains the stock had made since the end of January.
Kathmandu is also listed in Australia and a sharp downturn in consumer sentiment across the Tasman has left Australian investors nervous about any bad news from retailers.
Chief executive Peter Halkett said the outdoor apparel market was “becoming increasingly competitive”.
Mr Halkett said the company was not providing any guidance for its full-year result as variables such as weather conditions made forecasting Kathmandu’s trading performance very difficult.
“There is a relatively wide range of possibilities that means we can actually do quite well this year or if things get really difficult we can do quite poorly,” he said.
“Historically, bad weather helps Easter sales but there are so many variables and we certainly seem to cop a lot of criticism when we do have an expectation out and fall short of it. Besides the fact that the business is clearly a very good business it seems to cop more criticism than it deserves.”
Mr Halkett said that since the end of January Kathmandu’s same-store sales had been ahead of those in the first half.
“From a market point of view I think we’re unlikely to see any significant improvement to the current retail conditions in the second half,” he said.
Kathmandu posted a 15.4% rise in total interim sales to $146.6 million on 11 April, 2012.
Half-year net profit plunged 42% on the same period a year earlier to $6 million. The company said its New Zealand operation outperformed Australia in same-store sales growth during the first half, with Australian sales particularly weak in the states not benefiting from that country’s resource boom.
Operating costs rose almost 30% to $75 million due to a number of factors including advertising spending.
