Kathmandu says sales strong
Outdoor gear retailer Kathmandu has recorded stronger than expected sales, particularly in Australia, in its first trading quarter for the financial year despite difficult retail trading conditions.
The dual-listed company today reported sales were up 19.5 per cent to $66.9 million compared to the same quarter last year. Same store sales for the 15 weeks to November 11 rose 14.3 per cent, compared with growth of 7.6 per cent in corresponding quarter last year.
Kathmandu's chief executive officer Peter Halkett said at today's annual meeting in Sydney that despite challenging retail trading conditions, its sales performance in the first quarter "has overall been ahead of our expectations".
Consistent with its normal trading pattern, sales to date are less than 20 per cent of the company's expected total sales for the year. "Growth in first half-year profit remains highly dependent on the Christmas and January trading period," he said.
Last year, the annual sales mix saw the second quarter, which includes Christmas and January clearance sales, contribute 26 per cent to annual revenues. The majority of revenue came in the second half pushed by the key Easter and winter trading periods.
The good sales result has given the company confidence to continue its expansion programme.
It has opened six new stores open in Australia since August and will have three further stores in Sydney's CBD, Darwin and Mackay open for trading before Christmas.
Kathmandu is still aiming to open 15 new stores in the 2013 financial year with three further new sites already secured for opening in the second half.
Halkett said the current economic conditions were now the "new normal" but he believes the outdoor category remains resilient despite increasing competition.
The board remained confident in the Kathmandu business model and ongoing growth strategies, he said.
Several costs and initiatives in the 2012 financial year that affected profit would not repeated in the coming year;
"Trading to date gives us confidence and is ahead of our year-to-date targets but earnings growth is still almost all expected in the second half," Halkett said.
Providing there is no further deterioration in economic conditions, Kathmandu continues to expect an improvement in performance of our business (in 2013 over 2012)."
In September the company reported a 10.7 per cent fall in net profit to $34.9m for the year due to a squeeze on profit margins and rise in operating costs. Sales for the year to July rose 13.4 per cent to $347.1m.
The share price remains unchanged today at $1.73 a share.